,IIIJII'll  <-" 


r^.     r..     F.     VARI       L 

ATTORN  BY  AT  LAW/ 

LO«  AMttILM,  CAL 


/^^^^\ 

y^^&^^t^^$y 

X 

5^w^(||^^ 

THE  LIBRARY 
OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 
GIFT  OF 


A  TREATISE 


LAW  OF  PARTNERSHIP. 


THE  RIGHT  HONORABLE 
SIR    NATHANIEL    LINDLEY,   KNX., 

ONE   OF   THE   LORDS   JUSTICES   OF    HER    MAJESTY'S   COURT   OF   APPEAL, 

Assisted  by  WILLIAM  C.  GULL,  M.  A.,  of  Linciln's  Inn,  Esq.,  Barrister- 

at-Law,    Vinerian   Scholar  in  the    University    op    Oxford, 

1883;    AND    WALTER    B.    LINDLEY,    M.    A.,    of 

Lincoln's  Inn,  Esq  ,  Barrister-at-Law. 


TN     TWO     VOLUN1E3 

VOL.    I. 


Reprinted  from  advance  sheets  of  the  fifth  English  edition,  furnished  under  contract  by  the  English 

publishers,  with  American  notes  by 

Stewart   Ra.pa.lje. 


JERSEY  CITY: 
F.  D.  Linn  &  Co  ,  Law  Publishers,  &c. 


1888. 


Entered  according  to  Act  of  Congress,  in  the  year  1888,  by 

FREDERICK  D.  LINN  &  Co., 
In  the  office  of  the  Librarian  of  Congress,  at  Washington. 


\8S9b 


A  CARD. 


The  English  publishers  of  "  Lindley  on  Partnership "  recommend 
to  the  American  bar  the  American  edition,  published  by  F.  D.  Linn  & 
Co.,  of  Jersey  City.  This  edition  is  published  from  advance  sheets  of 
the  fifth  English  edition,  purchased  from  us,  and  is  the  only  edition 
printed  or  to  be  printed  in  the  United  States  from  the  English  advance 
sheets,  or  with  authority  from  us. 

W.  MAXWELL  &  SON. 
8  Bell  Yakd,  Temple  Bar  London,  May  8th,  1888. 

iv 


PREFACE 

TO    ANIERICAN    EDITION. 


In  the  selection  and  arrangement  of  the  American  notes,  the  aim  of 
the  annotator  has  been  two-fold  :  First.  To  ascertain  and  state  not 
only  the  true  result  of  the  authorities,  but,  upon  important  topics,  to 
make  extensive  extracts  from  the  opinions  of  eminent  judges  and  text- 
writers,  thus  showing  both  the  rules  laid  down  and  the  reasomng  upon 
which  they  are  founded.  Second.  To  so  arrange  and  classify  the  notes, 
by  means  of  catch-words  or  captions  in  bold  type  (following  closely  the 
classification  adopted  by  the  eminent  author  of  the  text),  as  to  produce 
in  the  notes  not  merely  a  rambling  mass  of  digest  clippings,  but  a 
second  treatise,  exhibiting  the  American  Law  of  Partnership  in  close 
juxtaposition  with  the  English  law  as  given  in  the  text. 

To  further  assure  this  end,  an  independent  index  has  been  carefully 
prepared  for  the  notes,  and  the  annotator  feels  well  assured  that  with 
its  aid  the  American  law  upon  any  question  of  partnership  can  be 
readily  and  definitely  ascertained. 

S.  B. 

New  York,  May,  1888. 


PREFACE. 


The  present  volume  is  the  fifth  edition  of  a  portion  of  the  author's 
former  "  Treatise  on  the  Law  of  Partnership,  including  its  application 
to  Companies."  When  that  treatise  was  first  published,  viz.,  in  1860, 
the  Law  of  Companies  was  being  developed  by  legislative  enactment 
and  judicial  decision  out  of  the  Law  of  Partnership  ;  and  it  appeared 
to  the  author  desirable  to  trace  that  development,  and  to  endeavor,  in 
one  treatise,  to  investigate  the  Law  of  Partnership  and  to  determine  the 
extent  to  which  its  principles  were  applicable  to  companies.  But  in  the 
course  of  the  last  quarter  of  a  century  Company  Law  has  been  devel- 
oped to  such  an  extent  as  to  justify,  if  not  to  require,  separate  treat- 
ment ;  and  with  a  view  to  convenience  and  expense,  advantage  has  been 
taken  of  the  opportunity  afforded  by  the  demand  for  a  fifth  edition,  to 
divide  the  former  treatise  into  two  parts,  each  of  which  shall  be  com- 
plete without  the  other,  viz.,  the  Law  of  Partnership  proper,  and  the 
Law  of  Companies,  in  so  far  as  it  has  any  connection  with  the  former. 
This  volume  is  devoted  to  the  first  of  these  parts,  viz.,  the  Law  of  Part- 
nership proper.  The  volume  relating  to  companies  is  in  course  of  prepa- 
ration, and  will  be  published  shortly. 

In  arrangement,  the  order  of  treatment  previously  adopted  has  been 
retained,  with  the  exceptions  that  the  causes  of  dissolution,  the  right  to 
retire,  and  the  right  to  expel,  have  been  transferred  to  the  chapter  on 
Dissolution,  in  Book  IV.  This  modification  will,  it  is  hoped,  be  con- 
sidered an  improvement. 

Great  pains  have  been  taken  to  render  this  edition  deserving  of  the 
favorable  reception  accorded  to  those  which  have  preceded  it.  Several 
very  important  cises,  and  especially  Kendall  v.  Hamilton,  Scarf  v.  Jar- 
dine,  and  the  Yorkshire  Banking  Company  v.  Beatsou,  have  been  decided 
since  the  publication  of  the  last  edition.  There  bus  also  appeared  the 
Digest  of  the  Law  of  Partnership,  by  Mr.  Frederick  Pollock,  which  is 
full  of  observations  of  the  greatest  value  ;  and  the  third  edition  of 
which  the  author  has  constantly  consulted.  In  the  Appendix  to  it  will 
be  found  the  draft  of  a  bill  to  consolidate  and  amend  the  Law  of  Part- 
nership. It  is  much  to  be  regretted  that  this  branch  of  the  law  should 
not  be  put  into  shape  and  codified  by  legislative  authority.     Mr.  Pol- 

vii 


VI 1 1  PREFACE. 

lock's  remarks  ou  this  subject,  in  the  Preface  to  the  third  and  fourth 
editions  of  the  Digest,  deserve  the  serious  attention  of  the  legislature. 
But  this  is  not  the  place  to  enlarge  on  the  many  advantages  which 
would  accrue  to  this  country  if  its  laws  wei-e  gradually  revised  on  the 
model  of  the  Indian  codes. 

The  whole  of  the  present  treatise  has  once  more  been  cai-efully 
revised  throughout.  Whatever  is  obsolete  has  been  omitted,  or,  if 
retained  as  being  still  useful,  has  been  printed  in  small  type.  The 
author's  increased  experience  has  suggested  additions  and  altei'ations, 
and  many  portions  have  been  re-written  and  adapted  to  the  most  recent 
decisions. 

Notwithstanding,  however,  the  labor  bestowed  upon  the  work,  and 
the  anxiety  of  the  author  to  render  it  a  trustworthy  guide  to  the  subject 
to  which  it  relates,  the  multiplicity  and  difficulty  of  the  questions  with 
which  he  has  had  to  deal  are  such,  that  he  dare  not  venture  to  hope 
that  he  has  always  avoided  error,  or  that  his  work  is  free  from  serious 
faults  ;  and  although  it  has  engaged  his  unremitting  attention  for  more 
than  thirty  years,  he  is  painfully  aware  that  it  is  even  now  but  an  im- 
perfect production. 

The  author's  thanks  are  due  to  Mr.  W.  C.  Gull  and  Mr.  W.  B.  Lind- 
ley,  for  their  assistance  in  revising  the  sheets,  and  to  the  former  gentle- 
man also  for  his  aid  in  prepai-ing  materials,  in  examining  American  and 
Irish  reports  and  authorities  on  doubtful  points,  and  for  the  preparation 
of  the  indexes. 

Royal  Courts  of  Justice,  1st  March,  1888. 


ANALYSIS  or  CONTENTS. 


[Refertuct-  is  to  Star  (*)  paging.] 


♦Page 
Preface        . v 

JEnolish  Authorities  Cited xxiii 

American  Authorities  Cited. 

Additions  and  Corrections. 

Introductory  ...........         1 

Book  I.  —Of  Contracts  of  Partnership  ......         7 

Book  II. — Of  the  Rights  and   Obligations  of   Partners  as   regards 

Non-Partners  .  .  .         .         .         .         .         .124 

Book  III. — Of    the    Rights    and    Obligations    of    the    Members    of 

Partnerships  between  themselves      .         .         ...     801 
Booi:  TV  — Of  the  Dissolution  and  Wjnding-up  of  Partnerships  .     570 

IiJDEX  TO  Text 1207 

l2fDEX  to  American  Notes 1307 


INTEODUCTORY. 

1.  Meaning  of  the  word  partnership         .......  1 

2.  Distinction  between  partnerships,  corporations,  and  companies       .     .         4 


BOOK  I. 


OF  CONTRACTS  OF  PARTNERSHIP. 

OFIAP.  I. — The  Nature  of  the  CoxTRArT  determined      ....  7 

Prelimiuarj'  observations             .......  7 

Sect.  1. — Of  true  partnerships          .......  10 

1.   Partnership  is  the  result   of  an  agreement  to 

share   prollts  and  losses     .         .          .         .     .  10 


ANALYSIS    OF    CONTENTS. 

♦Page- 

2.  Partnership  is  prima  facie  the  result  of  an 
agreement  to  share  profits  although  nothing 
may  be  said  about  losses,  and  although  there 
may  be  no  common  stock       .         .         .         .12 

3.  Partnership  is  prima  facie  the  result  of  an 
agreement  to  share  profits  although  commu- 
nity of  loss  is   stipulated  against         .         .     .       15- 

4.  Partnership  is  not  the  result  of  an  agreement  to 
share   gross  returns        .  .         .         .  .17 

5.  Partnership  is  not  the  result  of  an  agreement 
■which  is  not    concluded     .         .  .  .     .        19 

6.  Partnership  is  not  the  result  of  an  agreement 
to  share  profits  so  long  as  anything  remains 
to  be  done  before  the  right  to  share  them 
accrues  ....  ....       20 

Application  of  this  principle  to 

Ordinary  partnerships     .  .  .     .       20- 

Promoters  of    companies.     .         .         .23- 

Sect.    2.— Of    jwa^i-partnerships 25 

1.  By  sharing  profits 25 

Of  the  doctrine  that  persons  who  share  profits  are  lia- 
ble for  each  other's  acts  as  if  they  were  partners 

1.  State  of  the  law  anterior  to  Cox  v.  Ilichman 

2.  Modifications  introduced  by  Cox  v.  Hiclcman 

3.  The  act  of  28  &  29  Vict.  c.   86 

2.  By  holding  oneself  out  as  a  partner   . 

Sect.  3. — Of   sub-partnerships 

Skct.  4.— Of  general  and  particular   partnerships     . 

Sect.  5.— Of  clubs  and  societies  not  having  gain  for  their  object 

g,,f-P.  6.— Of  co-ownership  as  distinguished  from  co-partnership 
Note  on  the  remedies  between  co-owners 


CHAP.  11. — Of  the  Consideration  of  a  Contract  of  Partnership 
Of  the  return  of   premiums         .... 


26- 
30 
35 

40' 
48 

49 

50 

51 

57 


G3 

64 


70 


CHAP.  III.— Of   the   Persons    Capable   of    Entering    into     Partner- 
ship          

Sect.  1. — Of  their  number 70 

Sect.  2. — Of  their  capacity '''1 

1.  Aliens 72 

2.  Felons  and  outlaws 73 

3.  Infants 74 


AX  A  LYSIS    OF    CONTENTS. 


XI 


4.  Lunatics 

5.  Married    AVoraen 

6.  Corporations  and  companies 


*Pag& 
76 

77 
78 


CIIAP.  IV. — Of   the    Evidence  b\    which   a  Partnership    or   Quasi- 

Partnership  may  be  proved 80 

The  Statute  of  Frauds 80 

Tiie  fact  to  be  proved 83 

The  means  of  proving  it    .         .         .        •.         .     .  84 


CilAP.    V. — Of  Illegal  Partnerships 


91 


Sect.   1, — What  partnerships  are  illegal : — 

In  general      .........  91 

By  particular  statutes,  and  herein  of 

Bankers      ........  95 

Brokers 97 

Insurers    ........  97 

Medical  practitioners      .          .          .          .         .     .  98 

Newspaper  proprietors        .....  99 

Patentees      . 99 

Pawnbrokers       .......  99 

Solicitors 100 

Theatrical  managers,  &c.    .....  101 

Unincorporated    Joint-Stock     companies    with 

transferable  shares     .          .          .          .          .      .  101 

Unregistered  partnerships            ....  101 

Sect.  2. — Consequences  of  illegality    .......  102 

Especially  as  regards  actions  between  the  partners       .  104 

CHAP.    YI. — Of  the  General  Nature  of  a  Partnership     .         .         .110 

Sect.  1. — Of  the  mercantile  and  legal  notion  of  a  firm          .         .     .  110 

Sect.  2. — Consequences  of  the  non-recognition  of  the  firm  as  distin- 
guished from  the  persons  composing  it          .          .          .  112 

1.  Generally  as  regards  its  name           .           .         .     .  112 

2.  In  legal  proceedings  .         .         .         .         .11.5 

■3.   Partnership  disabilites      .          .          .          .         .     .  11(5 

4.   As  regards  sureties  and  securities,  and  in  particu- 
lar of  the  effect  produced  on  them  by  a  change 

in  the  firm .  117 


CHAP.  VII.  —Of  the  Duration  of  Contracts  of  Partnership 
Of  partnerships  at  will  and  for  a  term     . 

[As  to  causes  of  dissolution,  see  Bk.  IV. J 


121 
121 


Xll 


ANALYSIS    OV    C'ONTKN'IS. 


ON   THE 


BOOK    II. 

RIGHTS    AND    OBLIGATIONS   OF   PARTNERS   AS 
REGARDS    NON-PARTNERS. 


CHAP.  I. — Of    the   Liabilitiks    of   Partners    fok   the   Acts  of  each 

OTHER  .......... 

Sect.   1. — General   piinci])les   of  agency  as  applied  to  ordinary  part- 
nerships      ......... 

Sect.  2.   Liability  of  partners  in  respect  of  acts  which  are  neither 
torts  nor  frauds        ........ 

and  herein    of   the   implied  powers   of   partners  in 
matters  relating  to 

1.  Accounts  ...... 

2.  Admissions    ..... 
.3.  Agents       ...... 

4.  Arbitration     ..... 

5.  Banking  accounts       .... 

6.  Bills  of  exchange  and  promissory  notes 

7.  Bonds     . 

8.  Borrowing  money 

9.  Cheques 

10.  Contracts 

11.  Debts      . 

12.  Deeds 

13.  Distress 

14.  Extension  of  business 

15.  Guarantees 

16.  Insurances 

17.  Interest 

18.  Judicial  proceedings 

19.  Leases 

20.  Mortgages  and  pledges 

21.  Notice 

22.  Payments 

23.  Penalties 

24.  Purchases 

25.  Receipts 

26.  Releases 

27.  Representations 

28.  Sales 

29.  Servants 

30.  Ships 


1-24 
124 
128 


128 
128 
J  29 
129 
129 
129 
131 
131 
1:33 
134 
1.54 
136 
137 
137 
138 
]39 
139 
139 
1.39 
139 
141 
143 
143 
U4 
Uo 
115 
M6 
110 
147 
147 


ANALYSIS    OF    CONTENTS  Xlil 

♦Page 
Sect.  3. — Liability  of  partners  in  respect  of  torts  and  frauds        .     .     147 

1.  Torts 149 

2.  Frauds  .  .         , 150 

Liability  of  partnerships  for  the  misapplication 
of  money  by  their  members     .         .         .         .150 

Liability  of  partnerships  for  the  false  repre- 
sentations of  their  members        .         .         .     .     102 

Sect.  4. — Liability  of  partners  in  respect  of  acts  which  are  unauthor- 
ised, and  are  known  so  to  be       .....     16T 

Sect.  5. — Effect  of  the  form  of  a  contract  on  the  liability  of  part- 
ners in  respect  of  contracts  not  entered  into  on  behalf 
of  the  firm,  or  not  so  in  proper  form         .         .         .     .     17G 

1.  Contracts  under  seal  .         .         .         .         .177 

2.  Ordinary  contracts  not  under  seal  .         .     .     177 

3.  Bills  of  exchange  and  promissory  notes      .         .180 
Bills  in  the  name  of  the  firm  .         .         .     .     180' 

not  in  the  name  of  the  firm        .         .         .184 
Promissory  notes  ......      187 

Sect.  6. — Liability  of  partnerships  in  respect  of  contracts  not  bind- 
ing on  them,  but  of  which  they  have  had  the  benefit  .     189 

CHAP.   IL — Of   tue   Nature,    Extent,    and     Duration    of    the    Lia- 
bility  OF    Partners   to    Creditors     .         .         .         .192 

Sect.  1. — Nature  of  the  liability,  and  herein  of  joint  and  several 
liability 

1.  As  regards  contracts     .         .  .         .         .         .192 

2.  As  regards  torts  and  frauds      .  .         .         .     .     198 

Sect.  2.  —Extent  of  the  liability 200 

Sect.  3. — Duration  of  the  liability        .......     201 

1.  Commencement  of  liability      .....     201 

liability  of  firm  for  acts  preceding  its  formation  .  202 
liability  of   incoming    partners    for   debts  con- 
tracted before  they  join  the  firm        .         .     .  205 

2.  Tei-mination  of  liability 210 

A.  As  to  future  acts  .         .         .         ,         .     .     210 

1.  without  notice  of  dissolution      .         .         .     211 

Death 211 

Bankruptcy  .  .         .  .  .212 

Retirement  of  dormant  partners    .     213 

2.  by  notice  of  dissolution  or  retirement.         .     213^ 

the  effect  of  such  notice     .         .         .     215- 


XIV 


ANALYSIS    OF   CONTENTS. 


when  there  is  a  contiuued  hold- 
ing    out  notwithstanding    the 
notice       .         .         .         .         .216 
with  referciice  to  the  doctrine  that 
a  partnership,  though  dissolved, 
subsists  so  far  as  is  necessarj'  for 
the  windiiigup  of  its  affairs         .     217 
what  amounts  to  notice         .  .  .     221 

and  herein  of  the  distinction  be- 
tween old  customers  and  other 
people    .         .         .         .         .         .221 

B.   As  to  past  acts 223 

and  especially  by 

1.  Payment 225 

of  the  appropriation  of  payments        .         .     .     226 

where  there  is  a  single  current  account    .     .     228 
where  there  are  several  distinct  accounts     .     231 

2.  Release 23T 

3.  Substitution  of  debtors  and  securities       .     .     239 
(a)  by  agreement  .....     239 

A.  Where  a  retired  partner  has  not  been 

discharged 

a.  no  new  partner  having  been  intro- 
duced         242 

I.  although   a   new    partner   has  been 

introduced      .....     245 

B.  Where   a   retired    partner    has    been 

discharged        .....     247 
Discharge  of  the  estate  of  a  deceased 

partner 249 

(J)  by  merger  and  judgment      .         .         .     .     254 
and  herein  of  the  effect  of  taking  fresh 
securities  for  an  old  debt  .         .     254 

4.  Lapse  of  time  and  the  Statutes  of  Limitation.     257 


CHAP.  in. —  Of  Actions  between  Partners  and  Non-Partners. 

Sect.   1. — Of  actions  by  and  against  partners  ....     2G4 

1.  General  observations         ......     2G4 

2.  Where  no  change  in  the   firm  has  occurred  since 

the  right  accrued        .         .         .         .  .  .273 

A.  Actions  in  respect  of  legal  rights         .         .     .     273 
(a)  Actions  by  the  firm  .         .         .         .273 

Actions  ex  contractu         .         .         .     .     273 

Actions  ez  delicto  ....     278 


ANALYSIS    OF   CONTENTS  XV 

♦Page 

(b)  Actions  against  the  firm       .         .         .     .     280 

Actions  C.C  contractu     ....     280 

Actions  ex  delicto     .....     283 

B.  Actions  in  respect  of  eqnitrtbln  rights     .         .     283 

3.  Where  a  change  in  the  firm  has  occurrerl  since  the 

right  accrued         .......     284 

Sect.   2.— Of  set-ofT 290 

Sect.  3. — Of  execution  against  partners  for  the  debts  of  the  firm  .     .     298 


BOOK  III. 

OF  THE  RIGHTS  AND  OBLIGATIONS  OF,  THE  MEMBERS  OF 
PxiRTNERSHIPS  BETWEEN  THEMSELVES. 

CIIAP.   I. — Of  the    higut   to  take  Pakt  in  the  Management  of  the 

Affairs  of  the  Firm  .......     301 

CHAP.   II. — Of   the  General    Duties  of   Partners  to  observe  Good 

Faith 303 

Sect.   L — Prelinn'nary  remarks    ........     303 

Sect.   2.  — Of  the  obligation  of  partners  not  to  Ijenefit  themselves  at 

the  expense  of  their  co-partners  ...  .     305 

Sect.  3. — Of  the  powers  of  a  majority  of  partners       .         .         .     .     313 

1.  in  matters  arising  in  the  ordinary  course  of  busi- 

ness     314 

2.  in  matters  involving   a  change  in  the  nature  of 

the  business        .......     315 

CHAP.  III. — Of  the  Capitals  of  Partnerships 320 

<JHAP.   IV. — Of  Joint  and  Separate  Property 322 

Sect.    1. — Of  joint  estate     .........      323 

Sect.  2. — Of  separate  estate      ........     327 

Sect.  3. — Of  the  conversion  of  joint  estate  into  separate,  and  vice 

versa     ..........     834 

•CHAP.  V. — Of  Shakes  in  Partnersoips         ......     339 

Sect.    1. — Of  the  nature  of  a  share  ;ind  the  ruk' ;  which  govern  its 

devolution  in  case  of  death  ......     339 


XVI 


ANALYSIS    OF    CONTENTS. 


♦I'age 

of  the  doctrine  of  non-survivorship  between  partners      .  340 

of  the  doctrine  that  shares  are  personal  estate  .         .         .  o4i 

Sect.  2. — Of  the  amount  of  each  partner's  share          .         .         .     .  348 

the  presumption  in  favor  of  etjuality     ....  348 

Sect,   3. — Of  the  hen  which  each  partner  has  on  the  property  of  the 

firm,  and  on  the  shares  of  his  co-partners    .         .         .351 

Sect.  4.  —  Of  the  mode  in  which  a  share  is  taken  in  execution  for 

the  separate  debts  of  its  owner     .....  :J5(> 

1.   The  duty  of  the  sheritt 356 

'2.   The  position  of  the  purchaser  fi-f)ni  the  sheriiF        .          .  358 

3.  The  ])osition  of  the  execution  debtor  ...          .      .  359 

4.  Jlodilications  introduced  by  the  Judicature  Acts     .         .  361 

Sect.  5. — Of  the  transfer  of  shares      .......  36.3 

'N.B.  — As  to  the  reUnquishment  and  forfeiture  of 
shares  and  as  to  the  right  to  retire  and  ex- 
pel, see  infra,  Bk.  IV.,  Chap.  I,  §  1.] 


CHAP.  VT. — Of  Contribution  and  Indemnity         .... 

Sect.   1. — General  observations    ....... 

1.  Foundation  of  the  right  to  contribution  . 

2.  Of  the  right   of  agents  and  trustees  to  indemnity  from 

their  principals  and  cesticls  qie  trustent    . 

3.  Of  some  former  differences  between  contribution  at  law 

and  in  equity        ....... 

4.  Of  contribution  between  wrongdoers 

2.- — Of  compensation  for  trouble      ..... 

3. — Of  outlays  and  advances       ...... 

Sect.  4. — Of  debts,  liabilities,  and  losses  .... 

Sect.  5. — Of  interest  ........ 


Sect. 
Sect. 


CI1.\P.  YII. — Of  THE  Division  OF  Profits 

CHAP.  A'TII. — Of  the  Accounts  of  PAUTNERsniPs       .... 
Sect.   1. — Of  the  mode  of  keeping  partnership  accounts    . 
Sect.   2. — Of  the  duty  to  keep  and  the  right  to  inspect  them 

CHAP.   IX. — Of  Paktnehship  Articles  ..... 

Sect.   1.— General  observations     ....... 

I.   Partnershi[)   articles  are  not  intended   to  define  all    th 
rights  and  duties  of  partners         .... 


367 

368 
368 

\)m 

374 

377 

380 
381 
385 
389 

393 

396 
396 
404 

406 
406 

406 


ANALYSIS    OF    CONTENTS.  XVll 

*Page 

2.  Partnership  articles  are  to  be  construed 

with  reference  to  the  objects  of  the  partners     .     .  407 

3.  and  so  as  to  defeat  fraud       ......  407 

4.  and  to  prevent  unfair  advantages        .         ....  408 

5.  An}-  clause,  however  express,  is  capable  of  being  aban- 

doned by  the  tacit  consent  of  all  the  partners  .         .     .  408 

6.  Articles  of  partnership  are  presumed  to  apply  so  long  as 

the  parties  to  them  remain  partners         .         .         .     .  410 

Sect.   2. — On    the   usual   clauses   in   articles   of   partnership,    and 
especially  of  those  relative  to 

1.  The  nature  and  place  of  the  business  .         .         .412 

2.  The  time  of  the  commencement  of  the  partnership.  412 

3.  The  name  or  style  of  the  firm  .         .         .         .     .  413 

.  413 

.     .  413 

.  414 

.     .  418 

.  418 

.     .  420 

.  420 

.     .  422 

.  425 

.     .  426 


4.  The  duration  of  the  partnership  . 

5.  The  premium  ..... 

6.  The  capital  and  property  of  the  firm 

7.  Interest,  allowances,  &c.  . 

8.  Conduct  and  powers  of  the  partners 

9.  Partnership  books  .... 

10.  Accounts 

11.  Retiring  ..... 

12.  Dissolving  .... 

13.  Expelling 

14.  Valuation  of  shares       .         .         .         .         .         .     429 

15.  Transmission    of  shares  and  introduction  of  new 

partner         ........     433 

16.  Annuities  to  widows    ......     435 

17.  Prohibitions  against  carrying  on  business.        .     .     436 

18.  Good-will 439 

19.  Getting  in  debts 448 

20.  Assignment  of  share  by  retiring  partner      .         .     449 

21.  Indemnities     ........     450 

22.  Arbitration  clauses       .         .         .         .         .         .451 

23.  Penalties  and  liquidated  damages     .         .         .     .     454 


CHAP.  X. — Of  Actions  between  Paktneks    . 

Sect.  1. — General  observations    .... 

1.  Law  before  the  Judicature  acts 

2.  Effect  of  the  Judicature  acts  . 


456 

45  G 
456 
458 


Sect.  2. — Parties  to  actions  between  partners         ....     459 

1.  General  rule  as  to  partnership  actions      .         .     .     459 

2.  Where  some  partners   may  sue  or   be   sued   on 

behalf  of  themselves  and  others  .         .         .     461 

B 


XVIU 


ANALYSIS    OF   CONTENTS. 


♦Page 

Sect.  3. — Cases  in  which  Courts  will  not  interfere  between  partners.  464 

1.  Of  the  rule  not  to  interfere  except  with   a  view 

to  a  dissolution          ......  464 

2.  Of  the  rule  not  to  interfere  in  matters  of  internal 

regulation      .         .         .         .         ...         .     .  466 

8.  Of  the  rule  not  to  interfere  at  the  instance  of 

those  who  have  been  guilty  of  laches          .         .  466 

Sect.  4. — Actions  for  specific  performance. 475 

Sect.  5. — Actions  for  misrepresentation  and  fraud   ....  479 

1.  General  observations  .......  479 

2.  Actions  for  damages         ......  481 

8.  Actions  for  rescission  of  contract         .         .         .     .  482 

Sect.  6.— Actions  for  dissolution,  account,  &c 491 

1.  Of  account  and  discovery 492 

(rt)  Of  account  and  discovery  generally     .         .         .     492 

as  to  account  .......     492 

as  to  discovery  and  production  of  documents     .     501 
as  to  payment  into  Court       .....     505 

(I)  The  defences  to  an  action  for  an  account  and  dis- 
covery        ....... 

1.  Denial  of  partnership     .... 

2.  The  Statute  of  Limitations 

3.  Account  stated      ..... 

4.  Award        ...... 

5.  Payment.     Accord  and  satisfaction. 

6.  Release      ...... 

(c)  The  judgment  for  a  partnership  account 

Just  allowances       ..... 
The  period  over  which  the  account  is  to  extend  519 
Account  of  profits  since  dissolution    .         .     .     521 
The  evidence  upon  which  the  accounts  are  to 
be  taken  ....... 

2.  Of  injunctions . 

3.  Of  receivers         ........ 

4.  Of  the  sale  of  partnership  property  under  the  order 

of  the  Court    ....... 


506 
507 
508 
512 
514 
515 
516 
516 
519 


536 
538 
545 


Sect.  7. — Other  miscellaneous  actions  .         .         .         .         .     . 

1.  Between  persons  who  have  agreed  to  become  partners 

2.  Between  partners    ....... 

Note  on  the  law  as  it  stood  before  the  Judica- 
ture acts  


555 

559 
559 
560 

502 


ANALYSIS    OF   CONTENIS.  XIX 


BOOK  IV. 

OF   THE   DISSOLUTION   AND   WINDING   UP   OF   PARTNERSHIPS. 

*Page 

CHAP.  I. — Causes  of  Dissolution 570 

Sect.  1. — The  will  of  auy  partner         . 571 

1.  Of  the  right  to  dissolve 571 

2.  Of  the  right  to  retire 573 

3.  Of  the  right  to  expel 574 

Sect,  2. — The  impossibility  of  going  on  ;  in  consequence  of — 

1.  The  hopeless  state  of  the  partnership  business   .     .  576 

2.  Insanity 577 

3.  Misconduct  and  destruction  of  mutual  confidence.     .  580 

Sect.  3. — The  transfer  of  a  partner's  interest 583 

[N.  B. — As  to  Deat^i  and  Bankruptcy,  see  below.] 

Sect.  4. — The  occurrence  of  some  event  which  renders  the  continu- 
ance of  the  partnership  illegal 585 

CHAP.  II. — Consequences  of  Dissolution *   .  586 

1.  As  regards  the  creditors  of  the  firm     .         .         .  ^  .  586 

2.  As  regards  the  partners  themselves     .         .         .     .  587 

CHAP.  III.— Of  Death  and  its  Consequences 590 

Sect.  1. — As  regards  the  surviving  partners  and  the  executors  of 

the  deceased 590 

Sect.  2. — As  regards  joint  creditors 594 

1.  With  reference  to  what  occurred  before  death.         .  594 

And    herein  of   actions  against   executors  of   de- 
ceased partners  by  creditors  of  the  firm    .         .     .  599 

2.  With  reference  to  what  has  occurred  since  death      .  604 

And   herein  of   the  efifect   of   a  trust   to   employ 

assets  in  the  business  of  the  firm   .         .         .     .  607 

Sect.  3. — As  regards  the  separate  creditors,  legatees,  and   next   of 

kin  of  the  deceased     .         .         .         .         .         .         .  610 

1.  Of  the  rights  of  the  separate  creditors  and  legatees, 

&c.,  generally  ........  610 

2.  When  the  share  of  the  deceased  is  not  got  in  .         .614 

3.  Of  shares  specifically  bequeathed         .         .         .     .  619 


XX  ANALYSIS    OF   CONTENTS. 

♦Page 

CHAP,  rv.— Of  Bankruptcy •        ...     622 

Preliminary  observations 622 

Sect.  1.— Adjudications  of  bankruptcy  against  partners       .         .     .     625 

1.  Acts  of  bankruptcy 625 

And  herein  particularly  of  fraudulent  conveyances.     627 

2.  The  petitioning  creditor's  debt  .         .         ...     635 

3.  Of  joint  and  separate  adjudications  .         .         .     637 

And  herein  of  annulling  and  consolidating  adjudi- 
cations   640 

4.  Choice  of  trustee 644 

And  herein  of  inspectors  to  protect  special  inter- 
ests   645 

Sect.  2. — The  property  which  vests  in  the  trustee  and  the  conse- 
quences of  such  vesting     ......  646 

1.  Generally 646 

2.  Property  divisible  amongst  the  creditors.         .         .  650 

3.  Of  set-oflf  and  mutual  credit 654 

4.  Of  the  time  from  which   the  title   of  the  trustee 

dates 663 

And  herein  of  the  consequences  of  the  doctrine  of 
relation  back  as  regards 

(a)  transactions  with  the  bankrupt  partners 

(b)  transactions  with  the  solvent  partners. 

(c)  execution  creditors    .... 


Sect.  3. — Of  the  doctrine  of  reputed  ownership  .... 

1.  generally  .....•• 

2.  particularly  as  regards  partners 

where  there  has  been  a  change  in  the  firm 
where  there  is  a  dormant  partner . 

Sect.  4. — The  administration  of  the  bankrupt's  estate 

1.  General  principles 

2.  Of  joint  estate  and  of  separate  estates 

3.  Of  joint,  separate,  and  joint  and  separate  debts  . 

4.  Of     the   proof     and   payment   of   partners'    debts 

generally       ....... 

of   secured   creditors  and    the  rule  in  JEx  parte 
Waring       ....... 

A.  Proof  against  the  joint  estate  . 

the  joint  creditors  .... 

the  partners         ..... 
the  separate  creditors     . 

B.  Proof  against  the  separate  estates     . 

the  separate  creditors 


666 
669 
674 


676 
676 
683 
685 
689 

691 
691 

697 
701 

707 

709 
720 
720 
721 
728 
729 
730 


ANALYSIS    OF    CONTENTS.  XXI 

♦Page 

the  joint  creditors 730 

the  ])artners   .......  737 

C.  Proof  against  both  estates          ....  743 

General  rule  as  to  election      .         .         .     .  743 

Cases  in  which  double  proof  is  allowed       .  747 
Cases  where  a  secured  creditor  may  split  his 

demand 749 

Sect.  5. — The  bankrupt's  order  of  discharge.       .         .         .         .     .  751 

Sect.  6. — Arrangements  with  creditors     ......  754 

INDEX  TO  TEXT 1207 

INDEX  TO  AMEBIC  AN  NOTES 1307 


ENGLISH  AUTHORITIES  CITED. 


[Reference  is  to  Star  (*)  paging.] 


l^The  pciges  iiiicMch  a  ease  is  pariicidarly  referred  to  in  the  text,  and  is  not 
merely  cited,  are  in  the  folloicing  list  denoted  by  ayi  asterisk. 

The  cases  in  each  slieet  have  been  brought  doicn  to  the  latest  possible  moment.  It 
ought,  hoiocver,  to  be  mentioned,  that  no  attempt  has  been  made  to  collect  cases 
decided  since  the  establishment  of  the  Law  Reports,  and  not  reported  therein.^ 


*Pase 

Abbott  v.  Burbage,  631 

V.  Smith,  200,  299 

AbelB.  Sutton,  215,  216,218,  219*,  667, 

673 

Abell,  exjiarte,  730 

Abraham  v.  Hannay,  462,  463 

Acerro  v.  Petroni,  90 

Ackerman,  ex  parte,  731 

Ackroyd,  ex  parte,  645 

Acraman  v.  Bates,  682 

Adam,  ex  parte,  746,  747 

V.  Townend,  266 

Adams,  ex  parte  (3  M.  &  A.),  716 

(1  Rose),  '  726 

V.  Bankhart,  129 

V.  Bingley,  143 

Adamson,  ex  parte,   199,200,  702,745, 

746 
V.  Jarvis,  370,  377,  378 

Addams  v.  Ferick,  594 

Addie  v.  Western  Bank  of  Scotland, 

163 
Addis  V.  Knight,      291,  493,  591,  599, 

648 
Addison,  ex  parte  (3  DeG.  &  Sm.), 

633 

(3  Mon.  &  Ayr.),  632 

V.  Overend,  278,  279 

Adley  v.  Whitstable  Co.,         395,  537 

Aflalo  I'.  Fourdriuier,  752 


Agace,  ex  parte, 


♦Page 
146,  165*,  166.  171, 
703 

Agacio  V.  Forbes,  277 

Agar  V.  Fairfax,  59 

V.  Macklew,  451 

Agra  Bank,  ex  parte,  679,  680 

Agra  and  Masterniau's  Bank,  re     712 
V.  Hoffman,  291 

A.  G.  V.  Birkbeck,  96 

V.  Borrodaile,  61 

v.  Brunniug,  348 

V.  Burges,  149 

V.  Great  Northern  Railway  Co., 

316 
V.  Higgins,  340 

V.  Hubbuck,  347 

V.  Marquis  of  Ailesbury,  347 

and  Add.  to  p.  347 
V.  Mayor  of  Norwich, 
v.  Siddon, 
V.  Weeks, 
V.  Wilson, 

Airey  v.  Borbam, 

Aitcheson  v.  Lee, 

Akhurst  v.  Jackson, 

Albion  Life  Assur.  Soc,  re 

Albretcht  r.  Sussmann. 

Alcock  T.  Taylor, 

Alder  v.  Fouracre, 

Alderson  v.  Clay, 


372 

148,  149 

149 

377,  379 

68,  381* 

665,  675 

65,  67 

32,  385 

72,  73 

121 

807,  496,  541 

41,  86,  87 


XXIV 


AUTHORITIES    REFERRED   TO. 


♦Page 

Aldcrson«.  Pope, -141,  170,  174*,  175* 

Alexander,  ex  parte,  120 

«.  Barker,  275 

V.  Simms,  01,  355 

AUcard  v.  Weeson,  75 o 

Allen  r.  Bonnett,  630,  631 

V.  Hartley,  032 

r.  Ivilbre,  542,  588,  009 

Alletson  v.  Chichester,  680 

AUfrey  v.  Allfrey,  512,  513 

Alliance  Bank,  ex  parte,  713 

Alliance  Bank  Limited  v.  Kearsley, 

129 

AUowa}'  V.  Braine,  468 

V.  Steere,  658 

Alsager  r.  Currie,  656 

V.  Rewley,  611,  613 

Alston,  ex  pa7'te,  661,  718 

Ambler  v.  Bolton,  331,  415,  558 

Ambrose  v.  Kerrison.  373 

Anderson's  case  (7  Ch.  D.),  63 

Anderson,  ex  parte  (5  Ch,),  649 

(14  Q.  B.  D.),  703 

V.  Anderson,  425,  466,  582 

V.  Maltby,  338,  486,  574,  653,  698 

V.  Wallace,  544 

V.  Weston,  214 

Andrews,  ex  parte,  722,  738,  740 

Andrews  and  Alexander's  case,  51 

Andrewes  v.  Garstin,  559 

Anglesea  Colliery  Co.,  403 

Anon.  (1  Camp.  492),  425 

(2  K.  &  J.  441),       539,  544,  577, 

578,  579,  581 

(1  Madd.  144),  514 

(1  Mod.  215).  654 

(12  Mod.  446),  675 

(3  Salk.  61,  and  12  Mod.  446), 

647 
iy.  Layfield,  136 

Ansell  V.  Baker,  255,  256 

v.  Waterhouse,  283 

Antram  v.  Chace,  129 

Apperley  v.  Page,  463,  499,  500 

Appleby,  ex  parte,  702,  705,  706 

Appleton  «.  Binks,  177 

Apsej',  ex  parte,  160*,  191 

Arbouin,  ex  parte,     679,  686,  702,  746 
Arbucklc  r.  Taylor,  150 

Arden  v.  Sharpe,  171 

i'.  Tucker,  276 

Arkwright  v.  Newbold,  163,  481 

Arlington  r.  Meyrick,  117 

Armitage  v.  AVinterbottom,  139 

Armory  v.  Dclamirie,  148 


♦Page 
Armstrong  v.  Armstrong,  91,  105,  106 

V.  Lewis,  99 

Arnold  v.  Bainbridge.  292 

Arnott  V.  Hayes,  537 

Arthur  r.  Lamb,  59,  60 

Art  on  T.  Booth.  145* 

Ashb)-  T.  James,  510 

Ashley's  case.  490 

Ashton  v.  Blackshaw,  679 

Ashurst  V.  Mason,  369,  377,  379 

Ashworth  v.  Munu,  848 

V.  Outram,  78 

V.  Stanwix,  149 

A  spin  wall    v.    London    &    North- 
western Railway  Co.,  135,  146,  284, 

359 
Assignees  of  Brewster  and  West, 

ex  parte,  689 

Astle'«.  Wright,  66,  68,  69 

Astley  i\  Johnson,  268* 

Athenajum  Life  Ins.  Soc.  v.  Pooley, 

19l' 
Athenaeum  Soc,  re  201 

Atkins,  ex  parte,  725 

T.  Tredgold,  262 

Atkinson  v.  Laing,  286 

V.  Mackreth,  151,  284 

Atkyns  v.  Kinnier,  438,  455 

Attwood  V.  Banks,  636 

%\  Munnings,  130 

«.  Rattenbury,  274 

Attwool  v.  Attwool,  290 

Atwood  V.  Maude,  68,  69 

Aubert  t.  Maze,     94,  97, 105,  378,  388 
Aubin  V.  Holt,  93,  100,  479 

Auld  i\  Glasgow  Working  Men's 

Building  Soc,  319 

Ault  v.  Goodrich,  220*  260,  511 

Aulton  V.  Atkins,  450 

Aunand  x.  Honiwood,  342 

Austen,  ex  p>arte,  I'll,  703 

v.  Boys,  435,  438,  445,  447* 

Austin  X.  Jackson,  402,  518 

Aveling  r.  Knipe,  51 

Averall  v.  Wade,  369 

Aver}'  V.  Langford  437,  455 

Baboo  Jauokey  Doss  t\  Bindabun 

Doss,  .  460 

Backhouse  t.  Charlton,  133,  135 

V.  Hall,  118,  119 

Backhurst  v.  Clinkard,  357 

Backwell  v.  Child,  020 

Badeley  t.  Consolidated  Bank,    36,  37 
38*,  255,  and  Add.  to  p.  38 


AUTHORITIES   REFERRED   TO. 


XXV 


Badger  «.  Shaw, 

679 

Baglehole,  ex  parte^ 
Bagot  «.  Easton, 

491 

73 
501 

Bagshaw  v.  Parker, 

572 

579 

Bailey,  ex  parte, 
■».  Bidwell, 

627 
1G9 

V.  Finch, 

659 

V.  Ford, 

559 

577 

«.  Johnson, 

643 

657 

Baillie  v.  Goodwin, 

266 

Baird's  case. 

124. 

212 

Baird  v.  Planque, 
Baker's  case, 

43 
76 

Baker  v.  Charlton, 

184* 

V.  Martin, 

612 

Baldney  v.  Ritchie, 

281 

Bale  V.  Cleland, 

482 

Ball,  ex  jJCtrte, 

740* 

«.  Dunsterville, 

137 

T.  Lanesborough, 
Ballam  v.  Price, 

224, 

190 

2.37 

Balmain  v.  Shore, 

328,  347, 

434* 

Balsh  V.  Hyham, 

371, 

374 

Bam  ford,  ex  parte, 

633 

Banco  de  Portugal  «.  Waddell,     719, 

749 
Bank  of  Australia  v.  Nias,  255 

Bank  of  England,  case  of,     329,  330* 

337,  385 

V.  Anderson,  96 

V.  Booth,  96 

Bank  of  Ireland  «.  Perry,  713 

Bank  of  Scotland  v.  Christie,  119,  230 

Bankhead's  Trusts,  683 

Banks,  ex  parte,  743,  744 

V.  Gibson,  445,  446,  544 

Bannatyne  ®.  Leader,  630 

Banner,  ex  parte,  704 

V.  Berridge,  260,  511 

V.  Johnston,  711 

Barber,  re  or  ex  parte,     402,  409,  421, 

422,  429,  430,  432 

■y.  Barber,  509 

«.  Mackrell,  601 

Barclay,  ex  parte,  733 

v.  Lucas,  117 

Barden  v.  Keverberg  77 

Barff,  ex  parte,  651 

Barfield  u.  Loughborough,  390 

Barfoot  v.  Goodall,  223 

Baring  ii.  Corrie.  295 

V.  Dix,         '  57G* 

V.  Stanton,  307 

Barker  ».  Allan,  563 

■0.  Goodair,  359,  671,  675 


*Page 
Barker  v.  Richardson,  145,  146 

Barklie  v.  Scott,  12=*= 

Barnard,  re  186,  193,  598 

Barnardiston  v.  Chapman,  562 

Barnett,  ex  parte  (9  Ch.),  658 

(DeG.)  715 

Barnett  v.  Lambert,  23 

Barnett,    Hoarcs   &    Co.   «.    South 

London  Tramway  Co.,  163 

Barnewall,  ex  piarte,  161,  162,  617,  702, 

745 
Baroness  "Wenlock  v.  River  Dee 

Co.,  191 

Barron  ».  Fitzgerald,  113,  114 

Barrow,  ex  parte,  48*,  337,  460,  493, 

688 
Barr's  trust,  re,  680 

Barry,  ex  parte,  678 

V.  Nesham,  23 

®.  Stevens,  458 

Barter,  ex  ptan'te,  651,  658 

Bartlett  v.  Vinor,  95 

Barton  v.  Hanson,  179,  203,  828 

r.  Williams,         61,  124,  140,  502 

568* 
Barwick   v.    English   Joint    Stock 

Bank,  163 

Bass  «.  Clive,  112 

Bassaro,  ex  parte,  645 

Bassetfrv.  Wood,  255 

Batard  «.  Douglas,  24 

«.  Hawes,  24,  376,  566 

Bate,  ex  parte,         256,  704,  750,  754 
Bateman  v.  Pinder,  261 

Bates,  expjarte,  75 

Bateson,  ex  parte,  641 

V.  Gosling,  237 

Bath,  ex  parte,  719 

Batson.  ex  parte  (1  Gl.  &  J.),  645 

(Cook's  B.  L.),  678 

Batte  v.  Robbins,  390 

Battersby  v.  Smyth,  324 

Battley  v.  Lewis,  22,  202,  413 

Batty  V.  M'Cundie,  103 

Baudier,  ex  parte,  729 

Bauerman,  ex  parte,  731,  732 

Bawdcn  t.  Howell,  274 

Baxter  v.  Brown,  348 

V.  Hozier,  560 

V.  The  Earl  of  Portsmouth,       76, 

213 

t.  Pritchard,  629 

r.  West,  81,  85,  89,  581 

Bayley,  ex  parte,  (i6 

Bayly  v.  Schofield,  425 


XXVI 


AUTHORITIES    REFEURED    TO. 


Baynard  v.  "Woollcy, 
Beak  v.  Beak, 
Beale,  re, 

V.  Caddick, 


♦Page 

S77,  S-i  9 

519,  520 

040 

105,  209,  228,  230, 

234 


T.  Mouls,  206*,  207 

Beamish  v.  Beamish,  435 

Bear  v.  Bromley,  50 

Beard  v.  Webb,  77 

Beasley  v.  Beasley,  632 

Beaumont  v.  Boultbee,  513 

V.  Greathead,  224 

i\  Grover,  498 

V.  Meredith,  5,  50 

Beavan  v.  McDonnell,  76 

Beck  V.  Kantorowicz,       4G4,  480,  496 

Beckford  v.  Wade,  260 

Beckham  v.  Drake,       144,  147,  178*, 

189,  192,  275,  281,  652 

T.  Knight,  178,  281 

Bedford  v.  Bagshaw,  482 

V.  Brutton,         457,  563,  565,  567 

V.  Deakin,        244*  247,  253.  254 

Beech  v.  Evre,  207 

Beecham  r."  Smith,      ^       116,565,568 

Beecher  v.  Gufiburn,  '  391 

Beer  v.  Beer,  560 

Belcher  v.  Prittie,  630 

V.  Svkes  (8  B.  &  C),         337,  449 

r.  Sykes  (6  B.  &  C),  450 

Beldon  e.  Campbell  133 

Bell,  ex  parte,  97,  268%  270 

V.  Banks,  257 

V.  Morrison,  261 

V.  Phyn,  343*,  346,  347 

V.  Reid,  73 

V.  Simpson,  629 

Bellairs  r.  Ebsworth,  118 

V.  Tucker,  481,  482 

Bellamy   and  Metropolitan    Board 


of  Works,  re 
Belshaw  r.  Bush, 
Belton  V.  Hodges, 
Benfield,  ex  2^(t,rte, 
Benham  r.  Gray, 
Beningfield  r.  Baxter, 


Benjamin  r.  Portcus, 
Bennett  a.  Blain, 

V.  Lytton, 
Benson,  ex  parte, 

V.  Iladtield, 

r.  Healhorn, 
Bentham  Mills  Spinning  Co.,  re, 
Bentley,  ex  parte, 


151 

226 

75 

637 

328,  562 
475,  488,  517, 

613,  614 
29* 
348 
594 
702 

241,  284 
309 
652 
746 


i  *Page- 

Bentley  v.  Bates,  55,  56,  333,  366,  493, 

498,   650 

V.  Craven,  30.j^  380 

Beresford  v.  Browning,  194*,  197,  596 

j  Bergmann  v.  Macmillan,  364,  461 

t  Bernasconi  v.  Fairbrother,  638 

1  Berney  v.  Davison,  630,  631 

V.  Vyner,  630,  631 

Berry,  ex  parte,  709' 

V.  Alderman,  169' 

Besch  V.  Frolich,  579.  583 

Besley's  case,  or  Besley,  ex  parte,    24 

Betts  V.  Gibbins,  370,  377,  378. 

Bevan,  ex  parte,  743,  744 

V.  Attorney-General,  619 

V.  Lewis,  190*   359,  461,  542: 

r.  Nunn,  631,  665 

Beveridge  v.  Beveridge,  315 

Biddlecombe  v.  Bond,  425 

B\Mu\Y)h,  ex  parte,  153*,  717 

Bielby,  ex  parte,  746- 

Bigg,  ex  parte,  747 

Biggs  V.  Lawrence,  93,   103,  268- 

Biguold,  ex  parte,  390 

V.  Waterho.use,        141,  143%  172* 

Bilborough  v.  Holmes,     250,  251,  252, 

706,  707 
Billiter  v.  Young,  338,  486,  574,  653 
Binford  v.  Dommett,  348. 

Bingham,  ex  parte,  208,  706 

Binney  v.  Mutrie,      402,  403,  421,  517 
Birch,  ex  parte,  573 

Birley,  ex  jMrte,  732,  733 

v.  Kennedy,  505- 

Birmingham    Land    Co.    v.    L.    & 

N.  AV.  Rail.  Co.,  265 

Bischoffsheim,  ex  parte,  754 

Bishop,  ex  parte,  719" 

r.  Church,  194*,  195,  596 

V.  The  Countess  of  Jersev,       153, 

158=^ 
Bittleston  v.  Cooke,  629 

Blackburn,  ex  jyarte,  630 

Blackburn  Building  Soc.  v.  CunlifFe, 

Brookes  &  Co.,  132,  191 

Blackburn,   Low   &    Co.  v.  Vigors, 

141,  and  Add.  to  p.  141 
Blackett  v.  Weir,  86 

Blades  v.  Free,  211 

Blain,    ex  parte,     265,  300,  624,  625, 

633 

V.  Agar,  492 

Blair  v.  Bromlev,  146,  153*,  162,  165, 

260,  596 
Blake,  ex  parte,,  72& 


AUTHORITIES    KEFEERED    TO. 


XXVll 


*Page 

Blake  v.  Shaw,  439,  443,  447 

Blakeley's  (executor's)  case,  212 

Blakeney  v.  Dufaur,  551,  553 

Bland,  ex  parte,  627 

Blannin  v.  Taylor,  718 

Bleadon  v.  Hancock,  279 

Bleckley,  re,  373 

V.  Rymer,  508 

Blew  V.  Wyatt,  246*,  253 

Blisset  V.   Daniel,    304,  315,  402,  407, 

408,  421,  426*,  427,  430,  487, 

498,  517,  540,  571,  575 

Bloxam   v.   Metropolitan    Railway 

Co.,  394 

Bloxhani,  ex  2ycirte,  715 

V.  Pell,  16,  27*,  28,  29,  30 

Bluck  V.  Capstick,  68 

Blundell  v.  Winsor,  240 

Blyth  V.  Lafone,  452 

Blythe,  ex  parte,  722 

Boardman,  ex  parte,  730 

Boast  V.  Firth,  419 

Bock  r.  Gorrisen,  656 

Boddain  v.  Rvley,  392,  405 

Boddiiigton  v.  Castelli,  290,  653 

Bodenham  v.  Purchas,  230 

Bolckow  V.  Fisher,  503 

Bolitho,  ex  parte,  186,  703 

Bolland,  ex  jmrte  {Mont.  &McAr.),  155 

(7  Ch.),  629,  630 

(8  Ch.  D.),  628,  659 

V.  Nash,  657*,  662 

Bolton,  ex  parte,  746,  747 

V.  Puller,  335*,  646,  647,  698 

Bonbonus,    ex  parte,       131,  140,  171, 

189,  703 

Bond,  ex  parte,  743,  744,  746 

V.  Gibson,  144*,  169* 

V.  Milbourn,  65 

v.  Pittard,  15 

Bone  V.  Pollard,  51,  323 

Bonfield  v.  Smith,   192,  280,  281,  295, 

296 

Bonnardet  v.  Taylor,  505 

Bonscr  v.  Cox,  602 

Bonville  i\  Bonville,  479 

Booth  V.  Bank  of  England,  96 

V.  Booth,  617 

V.  Hodgson,  97,  105 

V.  Leycester,  389 

V.  Parkcs,  132,  410,  521,  522, 

527,  528,  616 

Borries  r.  Imperial  Ottoman  Bank,  295 

Borrodailes,  ex  parte,  746 

Bosanquet  v   Woodford,  267 

V.  Wray,  116,  267,  568,  569 


*Page 

Boswell  V.  Smith,  292 

Bottomley  v.  Fisher,  188* 

V.  Nuttall,  178,  180,  254,  257, 

704,  718 

Bouch  V.  Sproule,  321,  621 

Boulter  v.  Peplow,.  566 

Boulton,  ex  parte,  680 

V.  Jones,  186,  286 

Bourdillon  v.  Roche,  151 

Bourdin  v.  Greenwood,  260 

Bourne,  ex  parte,  636 

v.  Freeth,  44*   89 

Boussmaker,- ex  parte,  72 

Bovill  V.  Cowan,  503 

V.  Hammond,  566,  567 

V.  Wood,  718 

Bow  den,  ex  parte,  716 

Bower  v.  Harris,  228 

V.  Swadlin,  237 

Bowes,  re,  656 

v.  Lucas,  228 

V.  City  of  Toronto,  524 

Bowker  v.  Burdekin,  137,  631 

Bowsher  v.  Watkins,  487,  613 

Bowyear  v.  Pawson,  293 

Boyce  v.  Douglas,  256 

V.  Green,  348 

Boyd  1).  Emerson,  129 

V.  Mangles,  659 

Boydell  v.  Druramond,  222 

V.  McMichael,  678 

Boyes  v.  Bluck,  238 

Boyle,  ex  parte,  657 

Boys,  re,  235 

Bradbur)^,  ex  parte,  707 

V.  Dickens,  440,  443,  541 

Bradley  v.  Millar,  603,  743,  746 

Bradshaw,  ex  parte,  .                   731 

Braggiotti,  ex  parte,  75& 

Braham  v.  Beachim,  114: 

Braithwaite  v.  Britain,  250,  253,  260, 
262,  596,  597,  613 

V.  Skafleld,  45 

Brand  v.  Boulcott,  277 

Brandao  v.  Barnett,  656 

Brandon  v.  Hubbard,  277 

V.  Scott,  268,  269 

Brasier  B.Hudson,  134,284,342 

Bray  v.  Fromout,  363,  460,  493 

Bree  v.  Holbech,  259 

Brenmer  v.  Chamberlayne,  206 
Brett's  case,  or  ex  jmrte  (6  Ch.  &  8 

Ch.^  715,  717 

Brett  V.   Beckwith,     11*,  91,  98,  103, 

178,  192.  596,  600*,  688,  691 

V.  Marsh,  228 


XXVlll 


AUTIIOKITIKS    UEFEKRED    TO. 


♦Page 

Brettel  v.  Williams,  126,  138* 

Brewer  v.  Pocock,  594 

Brewin  v.  Short,  681,  682 

Brewster  and  West  (Assignees  of), 

ex  parte,  689 

Brice's  case,  211 

Brickland  v.  Newsome,  624 

Brickwood  v.  Miller,  676 

Bridges  v.  Mitchell,  508 

Brierlev  t:  Cripps,  564 

Brigg's^case  (1  Eq.),  490 

Briggs,  €xi)arte  (3  D.  &  Ch.),  16 

Bright,  ex  parte,  688 

«.  Hutton,  24 

Brinsmead  v.  Harrison,  256 

Bristol,    Corporation   of,  r.    West- 

cott,  336 

Bristow  «.  James,  280 

V.  Maxwell,  261 

«.  Taylor,  184 

V.  Wiiitmore,  355 

Britain  v.  llossiter,  81 

British    and    American   Telegraph 

Co.  V.  Albion  Bank,  149 

British  Linen  Co.  r.  Drummond,     259 

Mutual   Bank   Co.    v.    Charn- 

wood  Forest  Rail.  Co.,  163 

Wagon  Co.  v.  Lea,  287 

Broad,  re,  710 

Broadbent,  ex  jjarte,  650 

Brockbank  ^^  Anderson,  88* 

^TO^GY\c\i,  ex  parte,  715 

Brodie  v.  Howard,  147 

Bromley  «.  Williams,  51,  98,  464,  495 

Brook,  ex  parte,  708 

V.  Enderby,  229 

V.  Garrod,  424,  433 

Brooks,  ex  parte,  677 

T.  Sutton,'  516 

Broom  v.  Broom,  344* 

Broome,  ex  pjarte,        42,  65,  482,  491, 

551,  739* 

Brojjhy  v.  Holmes,  64 

Broughton  v.  Broughton,         268,  270 

V.    Manchester   and    Salford 

Waterworks  Co.,  96 

Brown,  ex  parte  (1  Atk.),  721 

(1  V.  &  B.  and  1  Ro.),      639,  747 

(3  M.  &  A.),  653,  683 

(2  M.  D.  &  D.),  724* 

(3  DeG.  &  S.),  740 

(9  Ch.  D.),  651,  687 

T.  Adams,  162,  228 

X.  Boorman,  199 

V.  Brown,  88 


*Page 
Brown  v.  Byers,  130,  133 

T.  Carbery,  046 

V.  Dale,  342 

V.  De  Tastet,     364,  381,  460,  493, 
519,  524,  527*,  528,  616 
v.  Douglas,  603*,  604 

v.  Duncan,  95*,  99 

V.  Gellatly,  592 

V.  Gordon,      211,  250,  251,  252% 
254,  260,  262,  597 
V.  Hall,  370 

13.  Jodrell,  76 

V.  Kidger,  130,  131 

V.  Leonard,         41,  175,  214,  217* 
4).  Litton,  526 

V.  Oakshot,  332* 

1).  Perkins,  515,  516*.  538 

V.  Tapscott,  15,  563,  564,  566 

V.  Vidler,  526 

v.  Weatherby,  604 

V.  Wootton,  256 

,  Shipley  &  Co.  v.  Rough,         711 
Browne,  ex  parte  (1  Rose),  636 

(6  Yes.),  681 

r.  Collins,  394,  620,  621 

V.  Gibbins,  386 

«.  Monmouthshire  Railway  and 

Canal  Co.,  393 

V.  Savage,  680 

Brownell  v.  Brownell,  513 

Browning  v.  Browning,  406,  430 

Brownlie  v.  Russell,  12 

Brownrigg  v.  Rae,  140,  269 

Brunswick  v.  Slowman,  149 

Brutton  v.  Burton,  112,  137,  272 

Bryant  z'.  Herbert,  199 

Brydges  v.  Branfill,         151*,  162,  200 
Brj^on  r.  The  Metropolitan  Saloon 

Omnibus  Co.,  133 

Buchanan  v.  Findlay,  656 

Buck,  ex  p)arte,  683 

Buckingham,  ex  parte,  731 

Buckland  r.  Johnson,  256 

r.  Newsame,  624,  634 

Buckley,  ex  parte,  189*  192,  702 

r.  Barber,        146,  288,  342*,  568, 

569,  672 

Buddie  V.  Willson,  280 

Bugg's  case.  584 

BulU-.  O'SuUivan,  133 

BuUen  t.  Sharp,  32*,  34,  171 

Bullock  v.  Caird,  265 

1'.  Chapman,  446,  544 

V.  Crockett,  69 

«.  Dodds,  73 


AUTHORITIES    REFERRED    TO. 


XXIX 


*Pafre 
Bunn  r.  Guy,  9^ 

Burbidge  v.  Robinson,  504 

Burbriflge,  ex  parte,  608,  683 

Burdekiu,  ex  pane  (1  Deac),  641 

(2  M.  D.  &  D.),  T&2 

Burden  v.  Burden,  881,  382,  52.8 

Burdikin,  ex  parte,  639,  640,  642 

Burdon  v.  Barkus,       66,  81,  121,  826, 
828.  330,  384*,  385,  555,  557 
Burfield  v.  Rouch',  447 

Burgess  v.  Burgess,  114 

V.  Merrill,  74,  281 

Burgue  v.  De  Tastet,  90 

Burland  v.  Nash,  228,  231* 

Burls  V.  Smith,  45,  50,  51 

Burlton,  ex  parte,  641 

r.  Wall,  641 

Burmesterw.  Norris,         132,  183,  190 
Burn,  ex  parte,  678 

V.  Burn,    137,  194,  195*,  596,  598 
».  Carvalho,  652,  681 

Burnaby,  ex  parte,  694 

Burnand  v.  Rodocanachi,  325 

Biu-ncU  V.  Hunt,         22*,  28,  328,  358 
Burnett,  ex  p>arte,  731 

Burns  v.  Poulsom,  148 

Burnside  v.  Dayrell,  85 

Burrell,  ex  parte,  721 

Burroughs  v.  Elton,  613 

Burstall  «.  Bey f us,  501 

Burt  V.  Moult,  667 

Burton  ex  p>arte  (1   Gl.   &  J.),     680, 

685* 
(3  M.  D.  &  D.),     161,   162,    702, 

717 

(13  Ch.  D.),  628 

V.  Green,  856 

V.  Issitt,  215* 

V.  Wigley,  454 

V.  Wookey,  309* 

Bury  V.   Allen,      65,  66,  68,  69,  367, 

387,492,  519,  739 

V.  Bedford,  447 

Bush  c.  Martin,  '   260 

Bushell,  ex  parte,  169,  172,  702 

Butchart  v.  Dresser,      140,  218,  219*, 

220* 

Butcher,  ex  parte,  688,  699 

V.  Pooler,  518 

11.  Stead,  630 

Butler  r.  Butler,  78 

Butliii,  ex  parte,  746 

Butt  r.  Bilke,  642 

V.  Monteaux,  107,  463 

Buttertield,  ex  parte,  608,  722* 


*Page 

Buxton  V.  Lister, 

476 

Bjers  V.  Dobey, 

280 

Bygrave,  ex  parte, 

641 

Cabell  v.  Vaughan, 

273,  280,  282 

Caddick  v.  Skidmore, 

82* 

Cahen,  ex  2)arte, 

624 

Caldecott,  re. 

739 

Calder  v.  Dobell, 

177 

V.  Rutherford, 

288 

Caldicott,  ex  parte. 

716 

V.  Griffiths, 

50,  567 

Caledonian  Lodge  of  Freemasons,     50 

Cakhrop,  re,  633 

Calton  V.  Bragg,  389 

Cambefort  v.  Chapman,     255,  256,  and 

Add.  to  p.  193 

Camden  v.  Anderson,  324 

Cameron,  re,  610,  620 

Campanari  v.  Woodburn,  211 

Campbell  i).  Campbell,  378*,  388 

V.  Flemings,  490 

V.  Mullett,  54,  325,  335 

Candler  V.  Candler,  100,  549 

Cannan  v.  South  East  Railway  Co., 

665 
Capper's  case,  24 

Carew's  case,  369,  386 

Carlisle  Canal  Co.,  ex  parte,  702 

Carmichael  v.  Carmichael,  512 

Carne,  ex  parte,  719,  745 

V.  Legh,  282 

Carpenter,    ex  parte,      573,  698,  741, 

752 
v.  Marnell,  653 

Carr  v.  L.  &  N.  W.  Railway  Co.,       40 
V.  Smith,  565 

Carralli  and  Haggard's  claim,  657 

Carrick,  ex  parte,  653 

Carrington  v.  Cantillon,  272 

Carruthers  I'.  Sheddon,  112 

Carter,  ex  parte  (2  GI.    &  J.),      737, 

742 

(1  M.  &  A.),  753 

V.  Home,  59,  307* 

V.  Southall,  273 

V.  Whalley,  44,  212*,  214 

Caruthers,  ex  parte,  729 

Carver  v.  Pinto  Leite,  508 

Cassels  v.   Stewart,     803,   313*,   364, 

423* 
Castell,  ex  parte,  726,  736 

Castelli  v.  Boddington,  289,  653 

Catling  T.  Skoulding,  509 

Catskill  Bank  r.  Gray,  79 


XXX 


AUTHORITIES    REFERRED    TO. 


€att  T.  Howard, 
Caughey,  ex  parte, 
Cavander  v.  Bulteel, 
Cavendish  v.  Geaves, 
Cawthorn  v.  Chalie, 
Cawthron  v.  Trickett, 
Cet'n  Cilcen  Mining  Co., 


*Page 

128 

639 

353,  364 

293,  296* 

460,  591 

277 

132 


Central    Railway  of  Venezuela    v. 

Kisch,  480 

Cescna  Sulphur  Co.  v.  Nicholson, 

394 
Chambers,  ex   parte   (2  M.  &  A.), 

637,  638 

(3  M.  &  A.),  639 

V.  Howell,  488 

Chancellor,  re,  615,  620 

Chancev  v.  May,  464 

Chandler,  f,r  ;?rt?-^c  (9Ves.),  733 

(13  Q.  B.  1).),  745,  747 

v.  Danks,  281 

v.  Dorsett,  304,  486* 

v.  Parkes,  74 

Chapleo  t.  Brunswick  Build.  Soc,  45 

Chapman  t.  Beach,  552 

i\  Beckington,  118 

i\  Derby,  654 

v.  Koops,  357 

Chaplin,  ex  parte,  631 

Chappie  V.  Cadell,  407*,  497* 

Charles  v.  Branker,  90 

Charlton  v.  Poulter,  404,  542,  580 

Chase  v.  Cox,  227 

Chavanj^  v.  Van  Sommer,  571 

Chavasse,  ex  farte,  92 

Cheap  t.  Craraond,  28,  36 

Cheeseman  v.  Price,  581 

Cheetham  v.  Crook,  292,  294,  596 

v.  Ward,  224,  237 

Child?;.  Morley,  370,  371,  373 

V.  Stenning,  501 

Childs,  re,  6J)1 

Chippendale,  ex  parte,     126,  191,  374, 

382,  389,  390 

Chissum  t.  Dewes,  439 

Cholmondeley  'e.  Clinton,  439 

Christian  v.  Taylor,  502* 

Christie,   ex   ^xtrfe   (M.  &  Bl.),     256, 

636,  701,  703,  704 

(lOVes.),  661 

(3  M.  D.  &  D.),  189,  702 

V.    Commissioners    of    Inland 

Revenue,  450 

Christophers  r.  White,  268 

Chuck,  ex  parte,     13,  28,  328,  690,  732 

T.  Freen,  119 


*Pase 
Churton  v.  Douglas,      437,  440,  441*, 

445,  543 
City  Bank  v.  Luckie,  712,  714 

City  Discount  Co.  v.  Maclean,  230,  235 
City  of  London  Gas  Co.  v.  Nicholls, 

144,  178 

Clancarty  v.  Latouche,  513 

Clark,  re  (3  D.  &  R.),  100 

(De  Gex),  189,  192,  702 

V.  Alexander,  510 

V.  Cort,  291 

V.  Cullen,  300 

V.  Leach,  411,  429 

Clarke,  ex  parte  (4  Ves.),  730 

(1  D.  &  C),  637 

V.  Bickers,  196*.  595 

V.  Blackstock,  187 

V.  Clement,  298 

v.  Dickson,  481.  482,  490 

V.  Hart,  428,  472,  574 

V.  Lord  Abingdon.  455 

V.  Tipping,  513 

Clarkes,  re,  256,  704 

Clarkson,  ex  parte,  334,  335,  336,  698, 

699* 

V.  Edge,  438,  455 

Claveriug  v.  Westley,  596 

Claxton,  ex  parte,  636,  643 

V.  Kyuaston,  237 

Clav.  ex  parte  (6  Ves.),  730 

"  (1  Mont.  Part),  733 

T.  Langslow,  87,  89 

Clayton's  case,      199,  226*,  228*,  229, 

230,  236,  250,  253 

Cleather  v.  Twisden,  151,  156* 

Clegg  r.  Cleig.  57,  59,  310,  323 

V.  Edmonson,       308*,  469*,  470, 

473,  475,  508,  571 

V.  Fishwick,    303,  307*,  496,  552, 

611 
Clements  «.  Bowes,  463,  491,  499,  500, 

512 

V.  Hall,     303,  307,  472,  473*,  475, 

527,  528 

V.  Norris,  309,  314,  315,  412,  540* 

Clcmontson  r.  Blessig,  72 

Clifford  V.  Brook,  458,  482,  492 

Clive  V.  Clive,  621 

Ciough,  re,  140,  218,  219,  341 

V.  London  and  North  Western 

Railway  Co.  490 

Clowes,  ex  parte,      160,  208,  706,  721 

Coates  T.  Coates,  478 

Cobham,  ex  pierte,  729 

Coburn  v.  CoUins,  593 


AUTHORITIES    REFERRED   TO. 


XXXl 


♦Page 

•Cockburn  v.  Thompson, 

462,  463 

Cockerell  v.  Aucomte, 

50,  51 

v.  Barber, 

381 

Cockle  v.  AFhiting, 

339,  485 

Cockrill  V.  Sparkes, 

263 

Cocks  V.  Nash, 

224,  237 

Coffee  V.  Brian, 

566 

Cofton  v.  Horner, 

466,  543 

Colien,  e.v  parte, 

627 

Colbeck,  re. 

28,  641,  642 

Colburn  v.  Patmore, 

377 

Cold  well  V.  Gregory, 

689* 

Coletjrave  v.  Manlev 

439 

Coleman,  ex  pan 

641 

«.  Riches, 

148 

V.  Mellersh, 

513 

Colemere.  re, 

629 

Coles  V.  Guruey, 

272 

V.  Sims, 

455 

Colien  V.  Wright, 

163,  168 

Collett  'V.  Foster, 

148 

Colley  V.  Smith, 

567 

Collinge,  ex  parte, 

692,  737 

Colli ngwoocl  V.  Berkeley, 

42,  45 

Collins,  ex  parte, 

638 

V.  Blantern, 

106,  370 

V.  Carey, 

268 

V.  Collins, 

433 

V.  Evans, 

370 

V.  Forbes, 

683 

V.  Jackson, 

331*,  414 

V.  Prosser, 

238 

r.  Young, 

548 

Collinson  v.  Lister, 

141 

Collyer  «.  Isaacs, 

708 

Colonial  Bank  v.  Whinney,  680 

Colquhoun  v.  Brooks,  394 

Colson  V.  Selby,  .  281 

Columbian  Government  v.  Roth- 
schild, 501 
Colyear  v.  Countess  of  Mulgrave,  434 
Combe's  case,  177 
Commercial  Bank  Corp.   of  India 

and  the  East,  248 

Conuell,  ex  parte,  324,  716,  740 

Const  w.  Harris,      304,  314,  315,  316*, 

319*,  409,  410,  544,  545*,  551 

Cooch  «.  Goodman,  115 

■Cook,  ex  parte  (2  P.  W.),       646,  692* 

(Mont),  726* 

V.  Catchpole,  453 

V.  Collingridge,  429,  488,  489,517, 

519,   528*,    555*,    557,    573, 

017,  019* 

V.  Rhodes,  4S8 


*Page 

Cooke  V.  Batchellor,  278 

V.  Benbow,        389,  391,  417%  418 

V.  Cooke,  452 

V.  Eshelby,  295 

v.  Seeley,  276-^ 

Cookson  V.  Cookson,      343*,  346,  347 

Coomer  v.  Bromley,        153,  156,  159* 

Coope  V.  Eyre,  15*,  18,  53* 

Cooper,  ex 2)a.rte,'  (I  M.  D.   &  D.)  334, 

337,  087*,  699,  700 

(2  M   D.  &  D.),  740 

'    (10  Ch.),  628 

T.  Chitty,  675 

V.  Hood,-  479 

1).  Met.  Board  of  Works,  439 

V.  Pritchard,  752 

V.    Wandsworth    Board   of 

Works,  427 

V.  Watlingtou,  442 

V.  Watson.  442* 

V.  Webb,  463,  499 

Cope  V.  Rowlands,  95,  97 

Copeland,  ex  parte,  140,  087 

Copeman  v.  Gallant,  087 

Copeland,  ex  jjarte,  729 

«.  Toulmin,  228,  230,  234,  349,  350 

Coplestone,  e.i' p'f'^^j  718 

Coppard  v.  Allen,  284 

Corb&ii,  ex  parte,  111,748 

Corbridge,  ex  parte,  37,  722 

Corcoran  v.  Witt,  453 

Cork  and  Brandon  Railway  Co..  v. 

Cazenove,  76 

Cork  and  Youghal  Railway  Co.,       191 
Cornelius  v.  Harrison,  43 

Cornill  v.  Hudson,  258 

Corpc  V.  Overton,  75 

Corporation  of  Bristol  y.Westcott,  336 
Corry  v.  Londonderry  and  Ennis-191 
killen  Railway  Co.,  393 

Corsellis,  re,  268 

Cossart,  ex2^arte,  752 

Costeker  b.  Horrox,  505,  506 

Cothay  v.  Fennell,  276.  277 

Cottam  V.  Partridge,  259,  510 

Cotton,  ex  Jjarte,  078 

Couldery  v.  Bartrum,  714,  746 

Coulson,  ex  parte,  624,  and  Add.     • 

to  pp.  78  and  626 
Courtenay  v.  Wagstaff,  21 

Coui'tivron  v.  Meunier,  753 

Cousins  V.  Smith,  104 

Coventry  v.  Barclay,      409,  421*,  429, 

430,  432 
Covi-ell  V.  Edwards,  376 


xxxu 


AUTHOKITIES    KEFERRED   TO. 


Cowell  V.  Sikes, 

V.  Watts, 
Cowslud  V.  C'ely, 
Cox's  Trusts,  re, 
Cox  r.  Hickman, 


♦Page 

698,  599 

82,  83,  468* 

283 

621 

26,  30*,  31*,  33,  35, 

36,  39,  126 

276 

460 

411 

268 

388* 

239 

463 

629,  630 

668* 

729 

363,  583,  590 

138 

218,  323,  340, 


387^ 


V.  Hul)bard, 
V.  Stephens, 
V.  Willoughby, 
Cradock  v.  Piper. 
Cragg  V.  Ford, 
Cragoe  v.  Jones, 
Cramer  v.  Bird, 
Craven,  ex  parte, 
v.  Edmondson, 
V.  Widdows, 
Crawford  v.  Hamilton, 

V.  Stirling, 
Crawshav  v.  Collins, 

'381,  402,  410,  517,  519,  520, 

525.  526%  555,  574,  588,  592, 

647,  648,  649 

V.  Maule,       55,  56,  57,  121*,  122, 

218,  331,  333*,  363,  366,  555, 

557,  558,  559,  571,  583,  587, 

590 


Creak  v.  Capell, 

506 

Crellin  v.  Brook, 

125 

Cresswell  v.  Hedges, 

59 

Creuze  v.  Hunter, 

389 

Crew,  ex  parte. 

639, 

640 

Cridland,  ex  parte, 

640, 

642 

Crispin,  ex  parte, 

624 

Croft  V.  xVllison, 

148 

V.  Pike, 

339,  354, 

599 

Crofts,  ex  parte. 

723, 

734 

Cropper  v.  Knapman, 

613 

Crosbie  v.  Guion, 

590 

Crosby  v.  Crouch, 

630 

Crosfleld,  ex  parte, 

731 

Cross  V.  Cheshire, 

564 

V.  Williams, 

50 

Crosse  v.  Smith, 

224 

Crossfield  v.  Such, 

51 

Grossman  v.  The  Queen, 

594 

Crowder,  ex  parte, 

692 

Croxton's  case 

382, 

386 

Cruikshank  v.  McVicar,  377,  480,  492, 

520* 
Cruse  V.  Paine,  375 

Cruttwell  V.  Lye,  440 

Cubit t  V.  Porter,  562 

Cuffe  V.  Murtagh,  122 

Cullen  'c.  Thomson's  Trustees  and 
Kerr,  482 


♦Page- 

Cumberledge  v.  Lawson,  137 

Cummins  v.  Cummins,  240 

Currie,  ex  parte,  753 

Curry,  re,  690 

Curtis's  case,  75 

Curtis  V.  Barclay,  370,  372 

v.  Perry,  324 

Cust,  ex  parte,  734 

Custance  v.  Bradshaw,  348 

Cutbush  V.  Cutbush,  609 

Cutteu  ex  parte,  640,  642 

V.  Sanger,  425 

Dacie  v.  John,  654* 

Dadswell  v.  Jacobs  504 

Daintry,  re,  645 

Dale  V.  Hamilton,   63,  81*,  82,  85,  129, 
304,  434,  477* 
Dally  V.  Wolverston,  752 

Dance  t\  Girdler  118 

Daniel  r.  Cross  247,  251,  596 

Daniell  v.  Roy.  Brit.  Bank,  491 


V.  Sinclair, 
Dann,  ex  pjarte. 
Darby  v.  Boucher, 

».  Darby, 
Darwent  ».  Walton, 
Davenport,  ex  parte, 
David  v..  Ellice, 
Davidson,  ex  parte, 

V.  Napier, 
TuUoch, 


514 
629 
191 

340,  345*,  346 

194,  283,  59& 

716 

242*,  243,  253 

739,  740 

439,  542,  669*,  670 

482,  595 


Davies  r.  Davies  (2  Keen),    487*,  494, 

613,  614 
V.  Davies  (36  Ch.  D.),  437,  442 
V.  Games,  333 

V.  Hawkins,  316 

V.  Hodgson,       437,  440,  442,  444 
1'.  London  and  Prov.  Marine 

Ins.  Co.,  480 

V.  Makuna  98,  99 

Davis's  case  (12  Eq.),  715 

Davis,  ex  parte  (4  De  G.  J.  &  S .),     21, 

727,  741 
V.  Amer,  448,  479,  543,  550* 

V.  Fisk,  462 

«.  Jones,  412 

V.  Johnston,  60,  470* 

V.  Morris,  300 

Davison,  re,       256,  257,  704,  745,  747 
v.  Donaldson,  249 

V.  Farmer,  637 

V.  Gillies,  394 

V.  Robertson,  130,  184 

Davys  v.  Douglas,  101 


AUTHOKITIES    REFERRED    TO. 


XXXlll 


Dawe  V.  Vergara, 

♦Page 
625 

Devaynes  v.  Noble, 

*Page 

Dawkins  v.  Antrobus, 

466 

Johnes's  case, 

211 

605 

Dawsoii,  ex  parte 

645 

Palmer's  case. 

250 

596 

V.  Beeson 

i37,  440 

Sleech's  case. 

161, 

194, 

200, 

i\  Dawson, 

514 

250, 

596 

597 

602 

V.  Fitzgerald, 

452 

Warde's  case, 

596 

Dean  v.  Allen, 

594 

Dever,  ex  parte  (No.  1) 

710 

,  711 

V.  Macdowell, 

312,419 

(No.  2), 

710 

713 

V.  Newhall, 

225,  237 

Dewdney,  ex  parte. 

638 

V.  Wilson, 

55S 

Dewhurst,  ex  parte  (7  Ch.), 

639 

Dear,  ex  2)arte, 

699 

(8  Ch.), 

713 

Deare  v.  Soutten, 

191 

Dickenson  v.  Lockyer, 

240 

De  Bognis  v.  Armistead 

> 

101,  105* 

Dickin,  ex  parte. 

675 

De  Bercnger  v.  Hamel, 

581 

Dickinson  v.  Yalpy, 

20 

,  42* 

,  85, 

De  Berkom  v.  Smith, 

40,  49,  88 

125,  127, 

129* 

130 

203 

De  Bussche  v.  Alt, 

306 

307,  467 

Dickson  v.  Cass, 

663 

668 

Decks  i\  Stanhope, 

460 

,  461,  499 

Digby,  ex  parte,          28, 

640 

641 

642 

Deeze,  ex  jmrte, 

655,  658 

Diggle  V.  Higgs, 

106 

Defries  v.  Creed, 

554 

Dimes  v.  Scott, 

620 

De  Gendre  v.  Kent, 

621 

Dimsdale  v.  Robertson, 

452 

De  la  Rosa  v.  Prieto, 

99 

Dinham  v.  Bradford, 

390, 

433 

De  la  Rue  v.  Dickinson 

, 

508 

Dixon,  ex  parte. 

746 

Delauney  v.  Strickland 

y 

50,  51 

V.  Clark, 

226 

Delhasse,  ex  parte, 

11,  35,  38* 

V.  Cooper, 

29 

Deloraine  v.  Browne, 

475 

V.  Hammond, 

288, 

341 

De  Mattos  v.  Saunders, 

654 

V.  Holden, 

544 

De  Mautort  v.  Saunders, 

192 

,281,  295 

V.  Wilkinson, 

152 

De  Mazar  v.  Pybus, 

114 

Dobbin  v.  Foster, 

286 

Dent  V.  London  Tramways  Co.,       394 

Dobell  V.  Stevens, 

481 

V.  Turpin, 

62 

Dobinson,  ex  parte. 

702 

Denton    v.    Great   Northern 

Rail- 

Dobson,  ex  parte. 

681 

way  Co., 

482 

Docker  y.  Somes,      523, 

536, 

615, 

617 

V.  Macneil, 

490 

Dockway  v.  Dickenson, 

279 

V.  Peters, 

565 

Doddington  v.  Hallet, 

61, 

339, 

352 

V.  Rodie, 

131,  390 

Dodgson,  ex  parte, 

565, 

741 

Denys  v.  Schuckburg, 

55 

Doe  V.  Baker, 

280 

De  Ribeyre  v.  Barclay, 

131, 

153*,  160, 
165 

V.  Bluck, 
V.  Horn, 

328, 

562 
562 

Dering  i\  Winchelsea, 

368,  376 

V.  Hulme, 

139 

Derry  v.  Mazarine, 

77 

V.  Ingelb}'-, 

634 

De  Tastet,  ex  parte. 

734 

V.  Miles, 

328, 

572 

V.  Bordenave 

217,  541 

T.  Prosser, 

58 

v.  Bordieu, 

551 

V.  Roe, 

273 

V.  Carroll, 

145 

v.  Summersett, 

139 

V.  Shaw,             111 

115, 

568,  569 

Dolman  n.  Orchard, 

214, 

215, 

216 

Deux  V.  Jeffries, 

145 

Doinville  v.  Solly, 

506 

Devaynes  v.  Noble, 

194, 

517,  595, 

Donaldson  v.  Williams, 

147 

596, 

597, 

601,  005* 

V.  Williamson, 

314 

Devaynes  v.  Noble, 

Doo  V.  Chippendeu, 

281 

Baring's  case,      152*, 

161,  165, 

Doran  v.  Simpson, 

613 

200,  596 

Dore  r.  Wilkinson, 

146 

Br3'^ce's  case. 

211,  605 

Dorman,  ex  parte. 

685 

Clayton's  case, 

152*, 

250,  596, 

597 

Doubleday  v.  Muskett, 
Douglas  v.  Patrick, 

45 
136 

Houlton's  case, 

47 

211,  605 

Dover  v.  Opey, 

104 

XXXIV 


AUTHORITIES    REFERRED   TO. 


♦Page 
Downam  v.  Matthews,  2'Ji 

Downs  V.  Collius,     433,  434,  476,  479, 

555,  573 
Drake  v.  Mitchell,  256,  704 

V.  Symes,  502*,  503 

Draper  v.  Manchester  and  Sheffield 

Railway  Co.,  504 

Dronncn  r.  Loudon  Ass.  Co.,  20 

Dresser  v.  Norwood,  141 

Drcwr.  Drew,  507 

V.  Nunn,  7G,  213 

Driver  v.  Burton,  274 

Drouet  v.  Taylor,  85 

Drury  v.  Drury,  59 

Dry  V.  Boswell,  12,  29* 

V.  Davey,  118 

Dublin  and  Wicklow  Railway  Co. 

V.  Black,  75 

Dubois  V.  Ludert,  281,  295 

Ducarry  v.  Gill,  180 

Duckworth,  i-e,  657 

Dudgeon  v.  O'Connell,  135,  137 

Duff  r.  East  India  Co.,  134 

Duignan  v.  Walker,  437 

Duke  of  Brunswick  i\  Slowman,  149 
Duke  of  Northumberland  «.  Todd,  117 
Duncan,  ex  jMrte,  639,  642 

V.  Chamberlayne,  680 

V.  Hill,  89 

V.  Lowndes,  138,  179 

V.  Luntley,  458,  492 

Dundonald  v.  Masterman,  151 

Dunlop,  ex  fctrte^  704 

Dunn  V.  Campbell,  505 

Dunne  v.  English,  306* 

DunniclifE  v.  Mallett,  62 

Durham's  case,  201 

Dutch  West  India  Co.  ■».  Moses,      115 
Dutton  V.  Morrison,         357,  359,  632, 
671,  675,  695 
Duvergier  x\  Fellowes,  99,  102* 

Dyke  ».  Brewer,  207* 

Dyster,  ex  parte,  690 

Eager  v.  Barnes,  153 

Eason  v.  Henderson,  560 

Easterbrook  v.  Barker,  30 

Eastern    Union    Railway    Co.     v. 

Cockrane,  118 

East  India  Co.  v.  Blake,  383,  384,  455 
Eastwood  V.  Bain,  180 

Easum  v.  Cato,  655,  656* 

Ebbett's  case,  76 

Ebbs  V.  Boulnois,  752,  756 

Eberle's  Hotels  Co.  v.  Jonas,  658 


*Page 

Eckhardt  v.  Wilson,  289 

Eddie  v.  Davidson,  357 

Edgingtou  v.  Fitzmam'ice,  481 

Edmiston  v.  Wright,  373* 

Edmonds,  ex2)arte,  722,  723* 

V.  Bushell,  181* 

Edmonson  v.  Davis,  lOl 

Edmunds  v.  Robinson,  69 

V.  Wallingford,  369,  373 

Edmundson  v.  Thompson,  43,  85,  202 

Edwards,  ex  parte  (1  Atk.),  660 

(13  Q.  B.  D  ),  665 

(14  Q.  B.  D.),  703 

«.  Aberayron  Mutual  Soc,  98,  452 

V.  Cooper,  666 

V.  Glyn,  630,  653 

v.  Hooper,  666 

v.  Martin,  678,  680 

«.  Scarsbrook,  709 

Eggiugton  V.  Cumberledge,  272 

Ekins  V.  Brown,  340 

Elbinger  Actien,  &c.  v.  Claye,         275 

Electric  Telegraph  Co.  of  Ireland,  575 

Elgie  V.  Webster,  564 

Elliot  v.  Brown,  328,  341,  541 

V.  Davis,  130,  137 

Elliott  T.  Turquand,  663 

Ellis,  exjxirte  (Mon.  &  Bl.),  673 

(2  Gl.  &  J.),  737,  742 

V.  Kelly,  99 

V.  Schmceck,  42 

V.  Walker,  620 

Ellis  V.  Ward,  22 

V.  Watson,  90 

Eilston,  V.  Deacon,  171 

Elmer  «.  Creasy,  507 

Elphinstone  v.  Monkland  Iron  and 

Coal  Co.,  455 

Elton,  ex  f arte,  692,  730 

Emly,  ex  f  arte,  325,  329,  703,  731 

«.  Lye,  186,  189* 

Emma  Silver  Mining  Co.  vs.  Grant, 

707,  752 
Emmet  %.  Butler,  216 

Empress  Engineering  Co.,  re,  434 

Empson's  case,  88 

Enderby,  ex  parte,  690 

Endo  v.  Caleham,  512 

England  t.  Curling,  312,  409,  413, 

476*,  517,  539* 
English   and    American    Bank,    ex 

parte,  716 

English    and    Irish    Church     and 

Univ.  Insur.  Soc,  32* 

Erichsen  v.  Last,  394 


AUTHOKITIES    KEFEKEED   TO. 


XXXV 


*Page 
Ernest  V.  NichoUs,  189 

Essell  V.  Hay  ward,  582* 

Essex  V.  Essex,        81,  333,  345*,  411, 

429,  479 

Estwick  V.  Conningsby,  551 

European  Bank,  ex  j^arte,  719 

Evans,  re,  .  604,  606,  607* 

V.  Buck,  501 

V.  Coventry,    391,  517,  539,  546*, 

551 

V.  Curtis,  112 

V.  Druinmond,  213,  214,  243, 

244,  247*,  253,  255 

V.  Hooper,  458 

V.  Richardson,  72,  92,  104 

V.  Smallcombe,  467 

V.  Stokes,  460,  461 

V.  Yeatherd,  386 

Everet  v.  Williams,  93* 

Everett  v.  Backhouse,  671,  729 

Evereth  v.  Blackburne,  97 

Evvart  v.  Williams,  537 

Ewer  V.  Ambrose,  86 

Ewing,  re.  340 

V.  Ewing,  390,  430 

«.  Osbaldiston.         101,  102*,  355 

Eyre,  ex  inirte,         148,  153,  158*,  179 


105 
659,  663 

552 
704,  706 

177 


Faikney  v.  Reynous, 
Pair  V.  Mclver, 
Eairburn  v.  Pearson, 
Fairiie,  ex  2^(trte, 
,v.  Fcntou, 

v.  Quin,  i;(Z 

Fairthorne  v.  Weston,  465,  497*,  540, 

575,  582 

Faith  V.  Richmond,      •         184*,  185* 

Falcke  ».  Scottish  Imp.  Ins.  Co.,     372 

Faldo  V.  Griiln,  213 

Falkland  v.  Cheney,  420 

Fannin  v.  Anderson,  258 

Farhall  v.  Farhall,  47,  606 

Farlow,  ex  parte,  753 

Farquharv.  Hadden,  340,  619 

Farr  t.  Pearce,  437,  444 

Farrar  v.  Beswick,  349,  568 

v.  Deflime,  214 

V.  Hutchinson,  135,  270 

Earrington  v.  Chute,  515 

Fauntleroy's  case,  155 

Fa.vcett  v.  Whirehouse,        303,  313*, 

391,  494,  496 

Featherstoue  v.  Hunt,  244,  249 

Featherstouhaugh  v.  Fenwick,         121, 

122,  307*,  340,  410,  413, 

527,  555,  571,  574,  592 


*Page 

Featherstonhaugh  v.  Turner,    66,  381, 

423*,  424,  479,  525,  527, 

528,  536*,  616 

Fell,  ex  parte,    334,  336,  687,  688,  698 

Fennings  ».  Grenville,      19,    61,    316, 

562 

Fereday  «.  Hordern,  16,  30 

^^  Wightwick,       55,  57,  333,  517, 

728 
Fergusson  «.  Fyfie,  128,  139,  247,  390 
Ferns  v.  Carr,  65,  66,  67 

Ferrar,  re,  703 

Fevvings,  ex  parte,  255 

Ffooks  V.  South  Western  Railway 

Co.,  410 

Field,  ex  parte,  73 1 

V.  Carr,  230 

Fife,  ex  forte,  624 

Banking  Co.,  ea;^ar<6,  322 

Figes  B.  Cutler,  80,  559 

Figgins  V.  Ward,  273 

Finch,  ex  parte,  588,  652,  669 

Findlay,  ex  parte,     599,  720,  728,  730 
Finkle  v.  Stacey,  18 

Firbanks  Ex.  «.  Humphreys,    45,  163, 

481 

Fisher,  ex  parte,  628,  629 

V.  Bridges,  105 

V.   Farrington,  601 

r.  Keaue,  466 

V.  Liverpool  Marine  Insur.  Co.,  98 

V.  Taylor,  132,  133,  190,  203 

Fitzgibbon  v.  Scanlan,  .  308 

Fitzherbert  v.  Mather,  141 

Fleet  V.  Murtou,  177 

Fleming   v.    Manchester,    Sheffield 

&  Lincolnshire  Railway  Co.,         199 

Flemyug  v.  Hector,  50 

Fletcher,  ex  parte,  678,  685 

v.  Dyche,  291 

■V.  Stevenson,  594 

Flint,  ex  parte,  656,  661 

Fl  in  toff,  ex  parte,  702,  703 

Flintum,  ex  jyai'te,  729 

Flitcroft's  case,  394 

Flocktou  X.  Running,    522,  524,  530*, 

535,  615,  617,  618 

Flood  V.  Patterson,  263 

Flower,  ex  jjarte,  711 

V.  Young,  85 

Flyn,  ex  parte,  683,  687 

Foley,  ex  parte,  101 

V.  Hill,  508 

Forbes  v.  Skelton,  259 

i\  Steven,  348 

Ford,  re  (8  Dowl.),  152 


XXXVl 


AUTHORITIES   REFERRED   TO. 


♦PaRe 

Ford,  ex  parte  (1  Ch.  D.),  639 

(3  M.  D.  &  D.),  715 

(18  Q.  B.  D.),  626 

V.  Tynte,  538 

v.  Whitraarsh,  42 

Fordyce's  case,  634*,  635 

Fore    Street     Warehouse     Co.    v. 

Duirunt  &  Co.,  266 

Forinan  v.  Homfray,  494,  497 

Forrester  v.  Bell,  24 

Forshaw,  re,  120 

Forster,  ex  parte,  651 

V.  Hale,  81*  82,  324 

V.  Lawson,  278 

V.  Mackreth,  133 

V.  Smith,  659* 

V.  Wilson,  663 

Foss,  ex  parte,  678,  681 

V.  Ilarbottle,  466 

Foster  v.  AUanson,  564,  668 

V.  Crabb,  562 

V.  Donald,  505,  506 

V.   Hodgson,  509 

Fowler  v.  Coster,  639 

■».  Raynal,  113 

V.  Wyatt,  514 

Fox  V.  Clifton,  12,  25,  43,  83,  85, 

90,  365 

«.  Frith,  565 

V.  Hanbury,      146,  212,  218,  562, 

568,  569*,  583,  647,  648.  649, 

606,  671*,  672 

Foxlev,  ex  parte,  627 

France  v.  White,  292 

Francis  v.  Doe,  562 

Frankland  v.  ]McGusty,  171 

Franklyn,  ex  parte,  730 

V.  Thomas,  309 

Franks,  ex  parte,  77 

Fraser  v.  Hill,  99 

T.  Kershaw,    542,  549*  668,  588, 

671,  673 

V.  Miirdock,  374 

Freeland  r.  Stansfiekl,         67,  69,  542, 

549,  670 
Freeman,  ex  f arte  (Buckj,       208,  705 

706,  745 
(Cooke's  B.  L.),  725 

V.  Cooke,  40 

v.  Fairhe,  404,  504,  537 

V.  Gainsford,  348 

r.  Lomas,  291 

V.  Pope,  62  i 

Freen,  ex  parte,  119 

French  v.  Andrade,  291,  341 


French  v.  Fenn, 
V.  French, 
V.  Macale, 
V.  Styring, 


14, 


Freshney  v.  Carrick, 
Frietas  v.  Dos  Santos, 
Frith  V.  Cartland, 

V.  Forbes, 
Fromont  v.  Coupland, 

Frost  V.  Moulton, 
Frowde  ».  Williams,  see 
Fry,  ex  parte,  208, 

Fryer  v.  Ward, 
Fuller,  ex  parte, 
Furnival  v.  Weston, 


*Pagc 

665* 

20^ 

455 

18*,    51,    54, 

564 

677,  682 

492 

162 

711 

13*,  328,  565, 

567 

121,  122 

Add.  to  p.  38 

705,  706,  745 

619 

695 

145* 


Gabriel  v.  Evill,  21*,  202 

Gadd  v.  Houghton,  179 

Gainsborough  v.  Stork,  430 

Gainsford  v.  Griffith,  455 

Gale  V.  Leckie,  14,  559,  563 

V.  Lewis,  680 

Gallimore,  ex  parte,  636 

Galway  v.  Matthew,     170*  174*,  175*, 
188*,  190,  210,  370 
Games,  ex  parte,  631 

Garbett  «.  Veale,  361,  676 

Garden   Gully  Co.  v.  McLister,     470, 
472,  475,  498 
Gardiner  «.  Childs,  14,  144,  l79, 

203 
Gardner,  ex  parte,  639 

«.   London,  Chat.  &  Do.   Ry. 
Co.,  545 

V.  McCutcheoD,  309* 

V.  Rowe,     '  630 

Gardom,  ex  pjarte,  138 

Garland,  ex  parte,     28.  593,  604,  608*, 

609,  722,  724 

«.  Jacomb,  131,  171,  216 

Garrand  v.  Hardey,  93 

Garratt  v.  Haudley,  275* 

Garstin  i\  Asplin,  359 

Gaskell  v.  Chambers,  506 

Geaves,  ex  parte,     151,  161,  683,  702, 

716 
Geddes  v.  Wallace,       10,    13,   15,   64 
385,  393,  409 
Gedge  v.  Trail.  487,  613 

Gellar,  re  (1  Rose).  28,  140 

Geller,  ex  parte  (2  Madd.),  733* 

Gemmel,  ex  ptarte,  353 

General  Co.  of  Land  Credit,  91 


AUTHORITIES    REFEKEED   TO. 


XXXVU 


♦Page 

Creneral   South  American   Co.,    ex 

parte, 

712 

George  v.  Clagett, 

295 

Gerhard  v.  Bates, 

482 

German  Mining  Co.'s  case, 

191,  383 

Gething  v.  Keighley, 

513 

Gibblett «.  Read, 

413 

Gibbons  v.  Wilcox, 

90 

Gibbs,  ex  parte, 

753 

V.  Guild, 

260 

V.  Merrill, 

74,  281 

Gibson,  ex  i^arte  (2  Mou.  & 

Ayr.), 

337,   699 

(4Ch.), 

248 

V.  Goldsmid, 

479 

V.  Lupton, 

18*,  54 

Gilchrist,  ex  parte , 

78 

Gill,  ex  parte. 

741 

r.   Manchester,  Sheffield 

,  &c., 

Railway  Co., 

78 

Gillain,  ex  farte, 
Gillan  v.  Morrison, 
Gillett,  ex  parte, 
t.  Thornton, 
Gillow  t.  Lillie, 
Gilpin  «.  Enderby, 
Ginesi  v.  Cooper  &  Co., 
Glassington   v..  ■  Thwaites 


Gleadon  «.  Tinkler, 
Gleadow  «.  Hull  Glass  Co., 


642 
369,  374,  385 
683 
41!,  453 
130 
13,  16,  30 
440 
,      312,    316, 
4->3-,  540* 
109 
382,  383, 
■   386 
Gled.stanes,  ex  parte,  653 

Glengall  (Earl  of)  v.  Eraser,  503 

Glenny  v.  Smith,  446 

Gliddou,  exparte.      111,  721,  725,  737* 
Glossop  «.  Colman,  74 

Gloucester,  Aberystwith,  &c..  Rail- 
way Co.,  re,  133 
Glyn,  ex  parte,                                   653 
v.  Cauliield,                                 504 
V.  Hood,                              364,  584 
Goddard  ®.  Cox,                                 228 
T.  Hodges,           28,  227,  567,  584 
v.  Mansfield,                               454 
Godfrey,  ex  parte,                             755 
«.  Macaulay,                               222 
•c.  Turnbull,                                 222 
Gold  v.  Canham,                                 543 
Goldiiig  r.  Yaughan,                         291 
Goldsmid  t.  Cazenove,                        748 
Goldsmith  r.  Levy,                             271 
■Good,  ex  farte  (5  Ch.  D.),  239 
(21  Ch.  D.),  669 
v.  Blewitt,                                    403 


Goodall,  ex  parte, 

V.  Skerratt, 
Goode  V.  Harrison, 
Goodman,  ex  parte, 
V.  De  Beauvoir, 
V.    Whitcombe, 

Goodtitle  v.  Tombs, 

V.  Woodward, 
Goodwin  «.  Parton, 
Gordon,  ex  parte. 


*Page 

753 

259 

74,  76* 

715 

271 

301,    404,    546, 

548,  551,  580 

58 

139 

263 

599,  649,  722, 

723 

V.  Ellis,     131,  140,  269,  292,  293*, 

294*,  296=^ 

V.  Howden,  99 

V.  Rutherford,  519 

Gorham  r.  Thompson,  222 

Gorrie  v.  Woodley,  112 

Gothenburg  Commercial  Co.,  re,     710 

Gough  V.  Davies,  246*,  253 

Gould,  ex  parte,  152 

re,  ex  parte   OflBcial  Receiver, 

Add.  to  p.  62S 

r.  Shoyer,  643 

Goulding  and  Davies,  ex  ^jarie,     173, 

703 

Gouthwaite  v.  Duckworth,     204,  205* 

Gover's  case,  480 

Gow  V.  Forster,  621 

Gowan  v.  Forster,  261 

Gowar,  re,  644 

Grace  v.  Smith,         26,  27*  28,  29,  30 

Graham,  ex  farte,  706 

«.  Chapman,  629 

T.  Furber,  677,  681 

V.  Hope,  222,  223 

V.  McCulloch,  687,  689*,  700 

t).  Mulcaster,  638,  646 

t.  Robertson,  289,  565 

T.  Wichelo,  240 

Grain's  case,  S47 

Grammar  v.  Nixon,  148 

Grant  v.  Jackson,  85,  89,  128 

V.  Norway,  148 

V.  Prosser,  272 

Graves  v.  Cook,  565 

«.  Sawcer,  568 

Graj^  ex  parte,  635* 

V.  Chi-swell,  598,  599 

V.  Haigh,  405,  538 

V.  Pearson,  51,  458 

Gray  burn  v.  Clarkson,  612 

Grazcbrook,  ex  parte,  741* 

Great  Luxembourg  Railway  Co.  t. 

Magnay,  508 


XXXVlll 


AUTHORITIES    REFERRED   TO. 


*Page 

Great    Western    Colliery     Co.    r. 
Tucker,  508 

Western  Insurance  Co.  t\  Cun- 
li'flpe.  307,  458,  492 

AVestern  Railway  Co.  v.  Rush- 
out,  315 
Greatrex  ».  Greatrex,       404,  420,  542 
Green  ^3  De  G.  &  J.),  644 
(1  D.  &  C), 


Bceslej', 

V.  Brijrffs. 


G93 
11* 
54,  61,  62,  355 
171 
74 
260 
454 
97 
11,  12,  14,  563 
679 
650 
131,  132,  203 


V.  Deakin, 

V.  (xicenbank, 

V.  Iliiniphreys, 

V.  Waring, 

V.  Weaver, 
Greenham  v.  Gray, 
Greening  t;.  Clarke, 
GrecnshielcVs  ca.se, 
Greenslade  v.  Dewer, 

Greenwood's  ca.se,  175 

Gregory  i\  Hurrill,  259 

r.  Patchett,  314,  394 

Grellier  v.  Neale,  89 

Greville  v.  Greville,  113 

GrifRn,  ex  parte,  636 

V.  Ashby,  262 

Griffith,  re  (12  Ch.  D.),  621 

e.c  parte   (23  Ch.  D.),  623,  629 

T.  Paget,  395 

Griffiths,  re,  257 

r.  Griffiths,  120,  439 

Grill,  ex  parte,  736 

Grisewood's  case  for  ex  parte),  93 

Grissell,  ex  parte,  624 

Griswold  v.  Waddington,  72,  585 

Groom,  ex  parte,  716,750 

Gross  V.  Dufresnay,  647 

Groux's  Soap  Co.  rs.  Cooper,  118 

Grugeon  v.  Gerrard,  714 

Grylls,  ex  parte,  644 
Guidon  V.  Robson,              89,  274,  277 

Guion  V.  Trask,  364 

Gurney,  ex  parte,    336,  698,  699,  705, 

706 
89,  181 


T.  Evans, 
Guthrie  v.  Fisk, 
Gv7yn  V.  Godby, 


633 
389 


HABER.snoN  V.  Blurton,  358,  359,  360, 

493 

Hackwell  v.  Eustman,  493 

Haddon  i).  Ayers,  563 

Iladley,  ex  parte,  Y52 

V.  Macdougall,  504 


Hagell  V.  Currie, 
Hague  V.  Rollcston, 


♦Pagfr 

506- 

646,  649,  G67*, 

668. 

Haig  ■».  Gray,  284,  342 

Haines,  ex  parte,  644 

Hale  V.  Allnutt,  630 

V.  Hale,  108,  520,  552*,  555 

Hales  V.  Petit,  340 

Halfhide  v.  Penning,  452 

Halket  v.  Merchant  Traders'  Loan 

and  lusur.  Assoc,  201 

Hall,  ex  parte  (3  Deac.),  741 

(UeGex),  638 

(Mon.  &  Ch.)  633,  636 

(9  Ves.),  731 

(17  Ves.),  624 

V.  Bainbridge,  177,  281 

1).  Barrows,  447 

V.  Curzon,  86 

V.  Fennell,  608 

V.  Frankhn,  71 

V.  Hall  (12  Beav.  and  3  Mac. 
&  G.),       539,  540*,  545*,  546,  547, 
549,  572 


(20  Beav.), 

V.  Huffam, 

V.  Lanning, 

V.  Noyes, 

V.  Rougham, 

V.  Smith, 

V.  West, 
Hallett  V.  Dowdall, 
Hallett's  estate,  re, 
Halliday,  ex  parte, 
Hambridge  «.  De  la  Croupe, 
Hambro  v.  Hull  and  London 

Insurance  Co., 
Hamer,  ex  parte, 

V.  Giles, 
Haulers'  Devisees 
Hamil  ti.  Stokes, 
Hamilton  v.  Bell, 

T.  Smith, 
Hammersley  e.  Knowlys 
Hammond,  ex  parte, 

V.  Douglas, 

V.  Ward, 
Hampden  v.  Walsh, 
Hamper,  ex  jxirte, 


ur 

341 

271 

508 

341 

188 

183* 

201 

162,  228,  234 

628 

272 

Fire 

184 

644 

517,  518 

case,  212 

66,  67,  69,  482,  739 

677,  682 


24. 


34^ 


Hancock  v.  Bewley, 
V.  Haywood, 
V.  Hodgson, 

Hankej'-  v.  Garratt, 
V.  Hammock, 


385 
227 
752 
344,  526 
543 
106 
28,  29*,  30,  328, 
359,  633,  637,  640 
62 
647 
177 
671 
609' 


289, 


AUTHORITIES    REFERRED    TO. 


XXXIX 


*Pa{re 

Hankey  v.  Smith, 

657 

Hanslip  v.  Kitton, 

350 

Hanson,  ex  farte^ 

661 

Harconrt,  ex  parte, 

636 

Hardcastle,  ex  fcirte, 

640* 

Harding,  ex  parte  (15 

Eq.), 

682 

(12  Ch.  D.), 

138 

,  179,  192 

V.  Glover, 

548,  551 

v.  Williams, 

537 

Harclinge  v.  Webster, 

543 

Harclman  v.  Booth, 

41 

Hare,  ex  parte. 

325, 

328,  684* 

V.  London  and  North -Western 
Railway  Co.,  507 

Hargreaves.    ex  parte,  721,  722*,  726, 

736 
V.  Hall,  559 

Hargrove,  ex  parte,  98 

Harkness  v.  Steward,  482 

Harley  v.  Greenwood,  718 

Harman,  ex  parte,  721 

'D.  Johnson,  131,  151,  156* 

Harper,  ex  parte  (1  De  G.  &  J.),  435*, 

436 

(20  Ch.  D.),  636 

r.  Godsell,  140,  569 

Harrington  v.  Churchward,        35,  493 

Harris,  exparte(\  JMad.),      187,  686*, 

700,  732 
(1  Ro.  and  2  V.  &  B.),     721,  725, 

734 

t.  Farwell,      247,  250,  251*,  596, 

600,  644 

«.  Fergusson,  51 

■».  Harris,  507 

«.  Hill,  89 

i'.  Nicker  son,  480 

v.  Rickett,  629 

Harrison,  ex  parte  (2  Rose),         54,  61 

(2  Gl.  &  J.),  641 

(28  Ch.  D.),  652 

Id.  Armitage,  496,  546 

'c.  Barton,  51 

t.  Bevington,  278,  279 

X.  Brown,  463 

V.  Gardner,  440,  442* 

x.  Jackson,  1S7,  271 

V.  Millar,  97 

«.  Tennant,      575,  580,  581*,  582 

Hart«.  Alexander,  223,  284*,  254 

X.  Clarke,  390,  391,428,  470,  472*, 

473,  475,  572,  574 

Hartley  v.  Manton,  238* 

Hartop,  ex  parte,  177,  190,  703 

Hartz  V.  Schrader,  542,  547 


*Page 

Harve)^  «.  Beckwith,  51,  464,  517 

V.  Bignold,  460,  461 

V.  Collett,  105,  106,  463 

x.  Crickett,      218,  569,  667,  672*, 

674 

«.  Kay,  87,  89 

V.  Towers,  169 

flarwood  t.  Edwards,  271* 

Hasleham  r.  Young,  138 

Plassol  V.  Simpson,  631 

V.     Merchant    Traders'    Loan 

and  Insurance  Assoc,  201 

Hassells  v.  Simpson,  631 

Hatchard  x.  Mgge,  595 

Hatton  'c.  Royle,  129,  272 

Hawken  v.  Bourne,  124,  133,  176 

Hawker,  ex  parte,  627 

Hawkins  v.  Hawkins,      328,  334,  337, 

541 
x.  Parsons,  517 

V.  Penfold,  663 

X.  Ramsbottom,  290 

X.  Whitten,  663 

Hawk.shaw  x.  Parkins,    135,  137,  145, 

359 

Hawtayne  x.  Bourne,        126,  132,  190 

Hawtrey,  ex  parte,  '         685 

Hay,  ex  parte,  254,  704,  743 

X.  Fairbairn,  678 

X.  Mair,  213 

Ilayden,  ex  parte,  731 

Haydon,  ex  p>arte,  729 

Hayman,  ex  parte,  688,  690*,  700 

Haythorne  x.  Lawson,  278 

Hayward,  e,cpa?'ie  (Cooke's  B.  L.),  694 

Healey  x.  Story,  188* 

Heap  X.  Dobson,  203 

Heath,  ex  p)arte,  688 

X.  Hall,  718 

V.  Hubbard,  61 

X.  Percival,  243*,  253.  602 

X.  Sansom,       121.  169,  213*,' 363, 

583 
Heathcote  x.  Hulme,        522,  531,  615, 

616,  617 

X.  Livesley,  675 

Heaton,  ex  jxtrte,     143,  160*,  161,  191 

Hedley  «.  Bainbridge,  131 

Heilbutt'.  Nevill.  131,  172,269*,  289, 

486,  667 
Helen,  The,  92 

Hellier,  ex  parte,  714 

Helme  x.  Smith,  54,  124,  566 

Ilelmore  x.  Smith  (No.  1),      323,  358, 
359,  860,  361 


xl 


AUTHOKITIES    REFERRED   TO. 


♦Page 

Helmore  v.  Smith  (No.  2),  539,  554 

Helsby  v.  Mears,  207 

Hemings  v.  Pugh,  458 

Henderson,  ex  parte,  75,  281 

V.  Eason,  59,  560 

V.  Royal  British  Bank,  103,  491 

«.  Wild,  135,270 

Hendriks  z\  Montagu,  114 


Hendry  v.  Turner, 
Henley  v.  Soper, 
Henniker  i\  Wigg, 
Hercy  «.  Birch, 
Herkuner,  The, 
Herman  v.  Jeuchner, 
Hermann  Loog  v.  Bean, 
Hern  v.  JSTichols, 
Hernaman,  ex  parte, 
Herries  v.  Jamison, 
Herring  v.  Walround, 
Hesham,  ex  parte, 
Hesketh  v.  Blanchard, 
Heslin  v.  Hay, 
Heslop,  re, 
Heydon  v.  Heydon, 


214,  426,  588 

564 

235 

476 

63 

106 

542,  543 

148 

255,  703 

299 

92 

726,  736 

28,  563 

321 

677 

357* 


Heyhoe  v.  Burge,     12,  28,  29*,  49,  89 
Heyne  v.  Middlemore,  498 

Heywood  ».  Watson,  565 

Hichinsf.  Congreve,  303,  313,  464,  496, 

506 

Hickie  &  Co.'s  case,  713 

Hickin,  ex  jmrte,  22,  727 

Hickman  v.  Cox,  30* 

Higgen's  case,  255,  250 

Higgius,  ex  parte,  255,  703 

-y.  Sargent,  389 

«.  Senior,  192,  281 

Hill,  ex  parte  (3  M.  &  A.    and  2 

Deac),  723,  745,  750* 

ex  parte  (2    Bos.    &  P.   N.  R), 

733 

(23  Ch.  D.),  629 

V.  King,  390,  538 

V.  Smith,  656 

Hill  &  Ilymans,  ex  parte,  638 

Hill's  case  (20  Eq.),  595 

Hills  V.  McRae,     193,    284.    596,  597, 

598,  599,  600 

V.  Nash,  460 

Hindmarsh,  re,  260 

Hinds,  ex  parte,  324,  734 

Hirsch  v.  Im  Thurn,  453 

Hirst  r.  Tolson,  66 

Hitchcock,  ex  parte,  706 

Hoare  v.  Contencin,  193 

V.  Dawes,  18 


*Page 
Hoare  ';.  Oriental  Bank  Corporation, 

111,  701 
1-.  Peck,  509 

Hobbs  ®.  AVayet,  374,  375 

Hobson,  re,  675 

V.  Bass,  228 

Hoby  V.  Roebuck,  240 

Hodges  V.    London  Trams  Omni- 
bus Co.,  446 
Hodgkin,  exp)arte,                     629,  630 
Hodgkinson,  ex  parte,     254,  624,  702, 

704,  732 

•p.  Ma3'er,  101 

«.  Travers,  642 

Hodgson,  re  (3  A.  &  E.),  100 

re,  (31  Ch.   D.),      193,   195,   257, 

284,  460,  596,  597,  598,  603 

ex  parte  (2  Bro.  C.  C),  729 

Hogarth  v.  Latham,  128,  130 

'c.  Wherley,  136 

Hogg  «.  Bridges,  632 

T.  Skene,  169 

Hoggard    v.    Mackenzie,  679,    682, 

684* 

Holden  «.  AVebber,  309 

Holderness  is.  Rankin,  682 

n.  Shackels,        352,  355,  047,  728 

Holdsworth,  ex  parte,     169,  170,  593, 

604.  702 

Hole  «.  Bradbury,  114,288 

V.  Harrison,  376 

Holford,  ex  parte,  '  645,  646 

Holgate  V.  Shutt,  513,  514,  520 

Holidfiy,  re,  272 

Holland  v.  King,  433 

r.  Teed.  118 

Holliday  r.  Camsell,  562 

Holly  ford  Mining  Co.,  403 

Holman  v.  Johnson,  104 

Holme   «.    Hammond,      32*,    34,    36, 

125,  593,  604 

Holmes,  ex  parte,  753 

t\  Bell,  256 

V.  Blogg,  75 

V.  Higgins,  23*,  24,  380,  567 

v.  Mentze,  358 

V.  Old  Colony  R.  R.  Co.,  79 

Holroyd  v.  Griffiths,  355 

«.  Holroyd,  34G 

Holyland  «.  De  Mendez,  436* 

Homfray  v.   Fothergill,       423*,    424, 

479,  541* 

Honduras,  »fcc.,  Co.  v.  Lefevre,        501 

Honduras  Rail.  Co.  v.  Tucker,      280, 

282 


AUTHORITIES   REFERRED   TO. 


xli 


s 

Page 

*Page 

Honey,  ex  parte, 

745, 

748 

Hunter  v.  Belcher, 

512 

513 

Hood  V.  Aston, 

542 

V.  Gibbons, 

259 

Hookham  «.  Pottage, 

440 

543 

Husbands,  ex  parte, 

747 

Hookins,  ex   parte, 

709 

Hutcheson  v.  Smith, 

380, 

382, 

383, 

Hooman,  ex  parte, 

678 

391 

537 

Hooper,  ex  parte. 

120 

Hutchinson  v.  Sturges 

1 

290 

V.  Keay, 

229 

V.  Sydney, 

290 

V.  Lusby, 

139 

V.  Whitfield, 

426, 

454, 

572 

Hope  V.  Oust, 

138 

V.  Wright, 

495 

V.  Meek, 

634 

635 

Hutton  V.  Bullock, 

204 

275 

Hopkinson  v.  Smith,         100 

,  101 

275 

V.  Crutw-ell, 

6 

29 

Horn  V.  Baker,        677,  678, 

683, 

688* 

V.  Eyre, 

237 

v.  Gilpin, 

80 

V.  Rossiter, 

594 

Hornblower  v.  Proud, 

678 

V.  Thompson, 

24 

Hornsby  v.  Miller, 

679, 

682 

V.  UpfiU, 

23 

Horrell  v.  Witts, 

549 

Hyatt  r.  Hare, 

144 

Horsfall,  ex  jmrte, 

438 

Hybart  v.  Parker, 

458 

Ilorsley  v.  Bell, 

206 

Hyde  v.  Johnson, 

261 

«.  Knighton's  Patent, 

62 

Hort's  case, 

247 

Ibbetson,  ex  parte. 

G78 

Hough  V.  Manzanos, 

180 

Ibbotson  13.  Elam, 

620, 

621 

Houghton,  ex  parte, 

324 

Ide,  re, 

626 

V.  Houghton, 

345 

Imbert,  ex  parte. 

711 

Houldsworth  v.   City  of   Glasgow 

Imperial  Gas  Co.  v. 

Londoi 

1   Gas 

Bank, 

163, 

480 

Co., 

259 

Houlton's  case,                    47 

,211, 

605 

Imperial  Mercantile  Credit  Associ 

- 

Houriet  v.  Morris, 

73 

ation  V.  Coleman, 

161, 

306 

Hovenden  r.  Annesley, 

508 

Indian  Chief,  The, 

73 

Howard  t\  Shaw, 

491 

Inglis  v.  Haigh, 

250, 

510 

V.  Tucker, 

370 

luman  v.  Clare, 

656, 

712 

Howarth  v.  Brearley, 

99 

Inues  V.  Stephenson, 

268 

Howbeach  Coal  Co.  v.  Teague, 

315 

Ireland  v.  Livingstone 

370 

Howden,  ex  parte,             140 

,147, 

324 

Iretou  V.  Lewis, 

460, 

461 

IJowe  V.  Lord  Dartmouth, 

620 

Irvine  v.  Young, 

502 

Howell  T.  Brodie, 

22* 

Irving  V.  Veitch, 

261 

Huber  v.  Steiner, 

.259 

Isaac,  ex  parte. 

718 

Huckej'',  ex  parte. 

657 

Isitt  t'.Beeston, 

627, 

681 

Huddleston's  case. 

578 

Izard,  ex  parte, 

627, 

629 

Hudson  r.  Forster, 

651 

f.  Robinson, 

187, 

282 

J.A.CAUD  V.  French,    134,  141, 

508, 

569 

Hue  V.  Richards, 

537 

Juckey  ®.  Butler, 

357 

Hughes,  re  (2  Hem.  &  M.), 

678 

Jackson,  ex  parte  (De 

Gex), 

631 

ex  parte  (4  Ch.  D.), 

255 

(2  M.  D.  &  D.), 

254, 

705 

V.  Statham, 

100 

(1  Yes.  J.), 

206*, 

208, 

705 

V.  Sutherland, 

324 

(5  Yes.), 

715 

v.  Thorpe, 

97 

re  (1  B.  «&  C), 

100 

Hughes-Hallett  v.    Indian    Mam- 

V. Jackson,        332*   333 

,  341 

, 

moth  Gold  Mines  Co., 

374, 

375 

346, 

432 

Hume  V.  Bolland, 

155, 

165 

V.  Litchfield, 

266 

Hunt  V.  Jessel, 

291 

T.  Ogg, 

510 

v.  Roj^al  Ex.  Assurance 

Co., 

139 

v.  Sedgwick, 

409, 

432, 

543 

Hunter,  ex  parte  {1  Atk.), 

703, 

721* 

».  Stanhope, 

359 

(Buck), 

741 

V.  Stopherd, 

563, 

564 

(2  Rose),                   646, 

684*, 

701 

«.  Wooley 

263, 

597 

<6  Yes.), 

715 

Jacobs  V.  Seward, 

58,  59,  61, 

568 

xlii 


AUTHORITIES   REFERRED    TO. 


♦Page 

Jacobscn  v.  Hennekinius,  84 

Jacomb  v.  Harwood,  195,  250,  253 
257,  596.  602,  603 

Jacques  v.  Chambers,  620 

Jaffray  v.  Frebian,  T4,  281 

Jaggers  v.  Binnings,  128 

James,  re,  624 

V.  Kynnier,  631* 

Jameson,  ex  parte,  709 

Janes  v.  Wliitbread,  30 

Janson,  ex  parte,  ,                732 

Jardine  x.  McFarlane,  179 

Jauncy  v.  Knowles,  482,  484 
Jebsen    v.    East   and    West   India 

Dock  Co.,  292 

Jefferson,  The,  669 
Jetferys  v.  Agra  and  Masterman's 

Bank,  296,  656 

V.  Small,  341,  342 

v.  Smith  (3  Russ.),  21,  363, 

365,  366,  423,  491,  501,  583,  584 

(1  J.  (!c  W.),  55,  56,  121,  553 

Jekyl  V.  Gilbert,  470* 

Jenkins  v.  Blizard,  222,  223 

v.  Morris,  186 

■i:  Tucker,  373 

Jenner  v.  Morris,  191 

Jennings,  ex  parte,  690 

V.  Baddeley,  576* 

V.  Broughton,  484 

T.  Hammond,  102,  103 

Jepson,  ex  parte,  644 

Jervis  v.  White,  506,  542 

Jessopp  T.  Lutwyche,  97 

Jestons  V.  Brooke,  27,  564 

Johnes's  case  (1  Mer.),  211,  605 

Johns,  ex  piarte,  725,  736 

Johnson,  re  (15  Ch.  D.),  606,  607*,  609 

(3  De  G.  M.  &  G.),  653,  715 

(2  M.  D.  &  D.),  636 

V.  Evans,  340,  357,  858 

'c.  Fesenmeyer,  630 

V.  Helleley,  440,  558 

V.  Hudson,  95 

v.  Peck,  139 

«.  Perens,  360 

^^  Pye,  74 

Johnston  t.  Curtis,  514 

i".  ]\Ioore,  621 

Joll  t.  Lord  Curzou,  280 

Jombart  %\  Woolett,  673 

Jones's  case  (15  Jur.),  704 

Jones,  ex  parte  (18  Cb.  D.),       75,  624 

(10  Ch.),  709 

(4  M.  &  S.),  324 


Jones  v.  Beach, 

*Page 
193,  196 

V.  Broadhurst, 
V.  Charlemont, 

226 
491 

V.  Clayton, 
V.  Corbett, 

299 
169 

V.  Dwyer, 

681 

V.  Foxall, 

523 

531,  615 

V.  Gibbons, 

651,  678 

i\  Harber, 

628,  631 

1).  Herbert, 

145 

V.  Lloyd,            426, 

572, 

577.  579 

«.  Maund, 

233* 

V.  Noy, 

77, 

520,  577* 

V.  Ogle, 

621 

V.  Pengree, 

508 

V.  Peppercorne, 
V.  Shears, 

656 
113 

V.  Walker, 

607 

i\  Welch, 

579 

V.  Yates, 

269 

Jordan  v.  Money, 
Josephs  V.  Pebrer, 

480 

370 

Joy  V.  Campbell,     108,  652,  677,  682, 

683 
Joyce,  ex  parte,  100 

Juggeewundas  Keeka  Shah  t\  Ram- 
das  Brijbooken  Das,  139 

Kaltenbach  v.  Lewis,  140 

Kay  V.  Johnston,  51,  60,  180,  355 

Keating  ».  Marsh,  155 

Kcay  'c.  Fenwick,     248,  254,  257,  704 

718 
Keble  v.  Thompson,  161 

Kedie,  ex  2yarte,  254,  704 

Kell  V.  Nainby,  276 

Kellock's  case,  602 

Kellock  V.  Enthoven,  708 

Kellv  &  Co.,  ex  parte,  630' 

"v.  Hutton,  364 

Kemble  «.  Mills,  417* 

Kemp,  ex  parte,  678 

V.  Andrews,  288,  341 

r.  Balls,  226 

Keraptner,  re,  338,  574,  698,  699 

Kendal  r.  Wood,       136,  166,  172,  269 
Kendall,  ex  parte,     250,  254,  603,  732 

«.  Hamilton,   193*,  255,  598,  703, 

732,  and  Add.  to  p.  193 

Kennedy,  ex  parte,  733 

v.  Lee,  440,  447,  549' 

Kensington,  ex  parte  (2  V.  &  B.), 

119,   120 

(14  Yes.),  731 

Kent  v.  Jackson,  314,  512, 


AUTHORITIES    KEFERKED    TO. 


di 


*Page 
Kerridge  v.  Hesse,  '         206 

Kerrison  v.  Reddington,  113 

Kershaw  v.  Matthews,     420,  434,  548, 

555,   573 
Kewney  v.  Attrill,  300,  554 

Key  V.  Flint,  656 

Kibble,  ex  2)arte,  704 

Kiffin  V.  Evans,  237 

Kilgour  V.  Finlyson,         190,  215,  218 
Kiilock  V.  Greg,  284,  460,  493 

Kiluer,  ex 2ynrte,  628 

Kilshaw  v.  Jukes,     31*,  203,  204,  205 
King,  ex  jyarte,  "  728,  742 

t'.    i\ccumulative    Assurance 

Co.,  121 

V.  Chuck,  410*,  430,  479 

V.  Hoare,  255,  256 

V.  Smith,  134 

Kingsbridge    Flour     Mill    Co.     v. 
Plymouth  Grinding  and  Baking- 
Co.,  189,  100 
Kingston,  ex  parte,  659 
Kinnaird  v.  Webster,                227,  230 
Kinnerley  «.  Hossack,       292,  294,  661 
Kinsman  v.  Barker,                             514 
Kipliug  c.  Turner,                              117 
Kirby,  ex  parte,                          254,  705 
V.  Carr,                              578,  57 '^^ 
V.  Duke  of  Mailborough,           227 
V.  Wilson,                                      2G8 
Kirk,  ex  parte,                                     113 
V.  Blurton,                115,  184,  185* 
Kirkman  r.  Booth,                     612,  015 
Kirkwood  v.  Cheetham,  41 
Kirwan  v.  Kirwan,                   246*,  253 
Kitchin  v.  Wilson,                              272 
Kitson  i\  Hardwick,                           652 
Kuapmau,  re,                                       364 
Knebell  i\  White,                      494,  497 
Knight  V.  Majoribanks,                    485* 
Knowles  v.  Haughton,       97,  105,  498 
Knox  V.  BushelC                                191 
V.  Gye,                      508,  510*,  617 
Knudson  v.  Pybus,                            114 
Krehl  v.  Great  Central  Gas  Co.,       675 
Kynaston  i\  Crouch,                 663,  665 

Labodcheke  r.  T upper,  28,  604,  606 
«.  Dawson,  440 

V.  Wharnclifte,  4GG 

Lacey  t\  Hill,  143,  236,  375,  590, 
734,  and  Add.  to  p.  143 

Lackington  ';.  Combes,  663 

Lacy  «.  Kynaston,  225,  237 

1}.  McNeile,  136 


♦Page- 
Lacy  V.  Woolcott,  212,  667* 
Ladbrooke,  ex  parte,  750* 
Laing  t.  Campbell,      228,   421,   490, 

513 

Laird  t\  Chisholm,  523.  524 

Lake  v.  Argvle,  44*  89,  90 

V.  Craddock,  341,  342,  471* 

V.  Gibson,  51,  341,  342 

Lambert's  case,  146 

Lambert  v.  Rendle,  615 

Lampon  v.  Corke,  238 

Lancaster  Canal  Co.,  ex p>((i'te,         683 

Lane,  ex  parte,  119,  706 

v.  Sterne,  554 

'0.  Williams,     131,   169,  188,  194, 

596 
Lanesborough  v.  Jones,  658,  660^ 

Lanfear,  ex  parte,  729,  742* 

Langdale,  ex  p)arte,  12,  30 

Langley  v.  Oxford,  494 

Langmead's   Trusts,   re,      140,   354*, 
355,  451* 
Langmead,  re,  679 

Lascaridi  z.  Gurney,  137 

Last  V.  London  Ass.  Corp.,  394 

Latch  v.  Wedlake,  137 

Latouche  v.  Waley,  112 

Law,  ex  pa-rte  (3  Deac.  and  Mon. 

&  Ch.  Ill),  182,  702,  747 

(Mon.  &  Ch.  590),  739 

V.  Garrett,  453^ 

V.  Law,  613. 

V.  Parnell,  274 

Lawes  r.  Lawes,  402,  409,  432* 

Lawless  r.  Sullivan,  394 

Lawrence,  re,  152 

r.  Bowie,  162 

Laws  xi.  Rand,  133 

Lawson  v.  Morgan,        466,    543,    544,^ 

549 

Leaf,  ex  parte  (1  Deac),  685 

(Mon.  &  Ch.),  688- 

(4  Deac),  700 

V.  Coles,  557*,  577 

Leak  «.  McDowell,  113 

Leake  ■«.  Young,  628 

Leary  v.  Shout,  581 

Lee,  re,  624 

v.  Haley,  114 

V.  Hart,  629 

®.  Page,  66,  68- 

Lees,  ex  parte  (1  Deac),  '  75 

(16  Ves.),  642 

V.  Jones,         55,  56,  553,  557,  571 

v.  Laforest,  303,  449,  o9i 


xliv 


AUTHORITIES    EEFERRED    TO. 


Lees  V.  Smith, 
Lcese  v.  Martin, 
Lesson  v.  Holt, 
Le  Fanu  v.  Malcolmson, 
Lefovre  r.  Boyle, 


*Page 
97,  105 
272 
222 
279 
277 


Lefroy  v.  Gore,  367,  368,  382,  385,  386 
Legg'.jtt  V.  Barrett,  440 

Leicestershire     Banking     Co.,     ex 

parte,  717 

Leideu  v.  Lawrence,  90,  134 

Leigh's  estate,  re,  508 

Leigh  V.  Birch,  613 

V.  Dickesou,  60 

Leiirhton  v.  AYales,  563 

Lemerc  v.  Elliott,  209 

Lempriere  v.  Lange,  75 

Le  Neve  v.  Le  Neve,  141 

Lennox,  ex  parte,  708 

Leslie,  re,  60,  355,  372 

Letts  and  Steer,  ex  j^arte,       386*,  387 
Leveck  v.  Shafto,  276 

Leverson  v.  Lane,  171,  172 

Levett,  ex  parte,  670 

Levey,  re,  742 

Levi  »fc  Go's,  case,  714 

Levy  r.  Pyne,  131 

«.  Walker,  445,  446,  447 

Lewis  V.  Armstrong,  99 

V.  Bright,         '  71 

V.  Edwards,  449,  567,  5G9 

V.  Langdon,         93,  217,  443,  44.'5* 
t.  Nicholson.  103,  2S2 

t.  Reilly,       '    129,  131,  169,  215, 
216%  220 
V.  White,  672 

Liardet  «.  Adams,  580 

Lickbarrow  v.  Mason,  652 

Liddel,  ex  pyarte,  746 

Limpus  r.  London  General  Omni- 
bus Co.,  148,  150 
Lindo  V.  Lindo,  238 
Lindon  v.  Sharp,  627 
Lindsay  v.  Gibbs,  61,  355,  364 
Lingard  v.  Bromley,  377,  3S7 
Xingen  t.  Simpson,  339,  355,  451,  479 
Lingood  v.  Eade,  454 
Xister,  ex  parte,  642,  G44 
Littledale,  ex  parte,  681 
Littles,  re,  322,  706 
Littlewood  r.  Caldwell,  544 
Liverpool  Adelphi  Loan  Associa- 
tion r.  Fairhurst,  77 
Xiverpool  Borough  Bank  «.  Turner, 

324 
c.  Walker,         195,  257,  603,  604 


Livingston  v.  Ralli, 

Llevvellen,  exparte, 

Lloyd,  exparte  (1  G.  &  J.), 
(1  Mon.  &  Ayr.), 
(3  Mon.  &  Ayr.), 
V.  Archbowle, 


♦Page 

451 

754 

119 

140 

717 

276 

V.  Ashby,  180,  186 

V.  Banks,  680 

V.  Blackburue,  117 

1).  Dimmack,  Add.  to  p.  375 

V.  Freshfield,     131,  168,  190,  721 

V.  Loaring,  5,  50,  301,  463 

Lobb,  exparte,  254,  704 

Lock  V.  Lynam,  311* 

V.  Venables,  621 

Lockett  T.  Lockett,  502,  508 

Loder's  case,  713 

Lodge  and  Fendal,  ex  2}arte,  633,  725, 

734,  735*,  739 

Lodge  V.  Dicas,  242*,  243,  253 

i\  Prichard,       536,  537,  599,  692 

Lomas,  ex  parte,  754 

Lomax  r.  Buxton,  029 

London  Assurance  Co.  v.  Bold,        j  18 

Birmingham  and  Bucks  Eail- 

way  Co.,  re,  538 

Bombay    and    Med.    Bank   x. 

Narraway,  054 

Brighton  &  S.  C.  Pvy.  r.  Good- 
win, 118 
Financial  Association  v.  Kelk,  54, 

421 
India  Rubber  Co.,  402 

&    N.    W.     Ry.    Co.    T.     Mc- 

Michael,  75,  76 

&  Southern  Counties  Freehold 

Land  Co.,  re,  315 

Syndicate  v.  Lord,  506 

Long  t'.  Yonge,  460,  461 

Longman  v.  Pole,  279 

V.  Tripp,  678 

LcDgworth's  Executor's  case,  91,  104, 

109,  379* 

Loring  v.  Davies,  371 

Loscomb  V.  Russell,  494,  497 

Lovegrove  v.  Nelson,  13,  365* 

Love  11  V.  Hicks,  49,  164*   167 

Levering,  ex  jiarte,  680 

Low  V.  Routledge,  115 

Lowe  V.  Copestake,  274 

Loyd,  ex  pjorte,  120 

Lucas  V.  Beach,  23*,  24,  567 

V.  De  la  Cour,  277 

V.  Wilkinson,  226 

t.  Williams,  604 


AUTHORITIES   REFERRED   TO. 


xlv 


Luckie  v.  Bushby, 

*Pape 
290 

V.  Forsyth, 
Luckombe  v.  Ashton, 

486 
50,  51 

Luff  V.  Horner, 

338 

Luke  V.  South  Kensington 
Co., 

Hotel 

267 

Lury  V.  Pearson, 

453 

Lyon  V.  Haynes,    218*, 

219, 

565,  569, 
589 

V.  Kuowles, 

18,  54 

V.  Tweddell, 

69,  583 

Lysaght  v.  Walker, 

234 

Lyster  v.  Dolland, 

341 

Lyth  v.  Ault, 

241 

Maberly,  ex  parte, 

635 

McBirney  v.  Harran, 

274 

Macbride  v.  Lindsay, 
McClean  v.  Kennard, 

491 
19,  559 

McConnell  v.  Hector, 

73,  634 

McCrae,  re, 

193, 

597,  598 

MacDonald  v.  Richardson,      461,  524, 
530*,  612,  617 
McGae,  ex  parte,  *  673* 

McGillivray  v.  Sinison,  292 

McGregor  v.  Bainbridge,    '  49,  83,  84, 

348,  350 
Machel,  ex  j^arte,  732 

V.  Kinnear,  274 

Macllreath  r.  Margctson,  382,  387 

Mclntyre  v.  Belcher,  436 

V.  Millrr,  225,  226 

Mclver  v.  Humble,  85,  222 

Mackay,  re,  454 

V.   Conunerciul   Bank  of   New 
Brunswick,  163 

McKay  v.  Rutherford,  81 

Mackenna,  ex  parte   (3  De  G.  F.  & 

J.),  119 

(7  Jur.  N.  S.),  715 

V.  Parkes,  67,  492 

Mackenzie,  ex  parte,  640,  644 

McKewan's  case,  376 

Mackey,  ex  parte,  653 

Maclae  V.  Sutherland,  130,  187 

Maclaren  v.  Stainton,  394 

Maclean  «.  Dawson,  611 

McLure  v.  Ripley,  304,  471,  485 

SIcMahon  v.  Burchcll,  59 

V.  Ujitou,  463 

McManus  r.  Crickett,  148 

M'Nair  »    Fleming,  184 

McNeill's  case,  490 

M'Neill  c.  Reid,  559 

McNeillie  v.  Acton,  609,  GlO 


*Page 
McOwen  v.  Hunter,  386 

McRae,  re,  613 

Maddeford  v.  Austwick,  303,  304,  486 
Maddick  v.  Marshall,  42,  45 

Madgwick  v.  Wimble,     433,  434,  553, 

555,  573 
Magdalena  Steam  Navigation    Co. 

V.  Martin,  72,  191,  390 

Mahony  v.   East  Holyford  Mining 

Co.,  166 

Mainwaring   v.  Newman,       116,  567, 

568,  569 
Mair  v.  Glennie,  10,  19,  29* 

Malcolmson  v:  Malcolmson,  186' 

Manchester  Bank,  ex  parte,     337,  688,, 

699 
and  County  Bank,  ex  parte,     716, 

740 
and  Liverpool  District  Bank- 
ing Co.,  ex  parte,  716 
and  Milford  Rail.  Co.,  545 
,  Shef. ,  and  Lincoln  Railway 
Co.  V.  Brooks,                      '  294 
Manderston  v.  Robertson,  261 
Mann's  case,  75 
Manning  v.  Westerne,                        227 
Mansell  v.  Feeney,                      507,  508 
Mant  V.  Mainwaring,                            88- 
March  t\  Ward,                                 187 
Mardall  v.  Thelusson,                        290 
Mare  v.  Charles,                                  186- 
Mariott  v.  Shaw,                                 357 
Marks,  ex  2)arte,                                 433 
V.  Feldman,                         629,  631 
Marlin,  ex  parte,                                 695 
Marlow  v.  Pitfield,                             191 
Marquand  v.  New  York  Manufac- 
tory Co.,                                           584 
Marsden  v.  Moore,                             417 
Marsh,  ex  parte,                                 120 
V.  Keating,      151,  155*,  157,  159, 

165 
Marshall ».  Colraan,  301,413,  466,  543, 

580 

V.  Maclure,  368 

V.  Marshall,  571 

■  V.  Button,  77 

11.  Watson,  542 

Marshfield,  re,  537 

Marston,  ex  parte,  739 

Martin's  case,  98 

Martin,  ex  parte,  688,  687 

V.  Crompe,  288,  341 

V.  Heathcote,  509 

V.  0"Hara,  03& 


xlvi 


AUTHORITIES    KEFEKRED    TO. 


Martineau  ■».  Cox,  503 

3Iartyn  v.  Gray,  42,  44,  45 

V.  Knovvllys,  59,  562 

Mason    or    Rawson,   ex  parte     (1 

Rose,  428),  641 

Massam  v.   Thorley's   Cattle  Food 

Co.,  114 

Masson,  ex  parte   (1  Rose,  159),     040, 

74G 

t\  Bogg,  602 

V.  Iladdan,  452 

V.  Rumsey,  1^6 

Master  v.  Kirton,  49 1 

Masterman  ex  parte,  681 

Mather,  ex  parte,  108 

V.  Fraser,  629,  678 

V.  Lay,  677 

j\Iatbers  v.  Green,  62 

Mathewman's  case,  T8 

Mathews  t.  Aland,  729 

Matson  v..  Swift,  Add.  to  p.  347 

]\Iatthews,  ex  parte,  40,  89,  637 

Matthison  v.  Clark,  268 

Maturin  v.  Trediuuick,  490 

Maude,  exvarte  (2  Ch.),  721,  727,  738, 

742 

(6  Ch.),  403 

Maudslay  i\  Le  Blanc,  87,  89 

Maughan  i\  Sharpe,  93,  112 

Maund  v.  x\Uies,  413 

Mavor,  ex  parte,  633 

Mawman  x.  Gillctt,  276 

Maxwell  v.  Greig,  284 

«.  Ilogi?,  114 

IB.  Jameson,  oY* 

■«.  Port  Teunant  Co.,  476 

May,  ex  parte,  737 

v.  Smith,  223 

Mayberry  v.  Brooking,  113 

Mayhew's  case,  366 

Mayhew  v.  Fames,  141 

V.  Herrick,  61,  358,  562,  568*,  569, 

676 
Mayou,  ex  parte,  338,  698 

Medewe's  trust,  230 

Megarey,  ex  parte,  738 

Meggy  «.  Imperial  Discount  Co.,     756 
3Iegrath  v.  Gray,  238 

^leinhertzhagen,  ex  parte,        254,  704 
Melbourne,  ex  parte,  646 

Mtdiorucchi   v.    Royal    Exchange 

Assurance  Co.,  354 

Mellersh  v.  Keen,     381,  440,  443,  444, 

527,  528,  571,  572,  579 

Melliss  V.  Shirley  Local  Board,  95 


♦Page 
Mellors  v.  Shaw,  149 

Mercantile  Mutual  Marine  Insur- 
ance Co.,  re,  708 
Mercer,  ex  parte,  627,  629,  654 
Meredith,  The,  380 
Merriman  v.  Ward,  229,  230,  235,  597 
Merryweather  v.  Nixan,  370,  377 
Mersey    Steel  and  Iron   Cb.   v. 

Naylor«&Co.,  658 

Mertens  v.  Ilaigh,  505 

Metcalf  V.  Bruin,  117 

«.  Rycroft,  112,  273 

Metropolitan  Saloon  Omnibus  Co. 

V.   Hawkins,  278 

Meyer,  ea;  pa?'/*;,  169 

V.  Sharpe,  15,  328,  671 

Meyraott  t.  Meymott,  391 

Michell  «.  Harris,  514 

Middleton  v.  Pollock,  292,  662 

Milburn  «.  Codd,  567 

Miles'  claim  (9  Ch.),       180,  182,  183* 

ex  parte  (2  Rose),  645 

V.  Thcmas,  540,  571 

Milford  T.  Milford,  514,  520 

Millar  v.  Craig,       389,  489*,  513,  514, 

516,  517,  537 

Miller  v.  Douglas,  171 

V.  Mackay,  309,  311,  380 

V.  Miller,  510 

V.  Mynn,  299 

Milliken  v.  3Iilliken,  433 

mWs,  ex  parte  {<o  Gh.),  290 

(8  Ch.),  36,  37 

V.  Bennett,  6S2,  633* 

V.  Fowkes,  227 

«.  Hanson,  505 

Milne  v.  Bartlet,  579 

Miluer,  ex  parte,  642 

Minchin,  ex  parte  (2  Gl.  &  J.),        730 

(Mont.  &  McAr.),  ~54 

Minnitt  v.  Lord  Talbot,  50 

v.  Whiney   or  Whitney,         170, 

175,  215 

Mitchell's  case  (6  Ch.),  260,  511 

exp>arte{\%N^?,.),  624 

V.  Cockburn,  97,  105 

V.  Cullen,  226 

v.  Lapage,  186,  286 

V.  Reynolds,  437 

T.  Tarbutt,  198,  2S3 

Moffiitt  V.   Farquharson,        309,    326, 

460,  461 

V.  Van  Millingen,  568,  569 

MoUer  ».  Lambert,  112 

Molten  '0.  Camroux,  76,  213 


ADTHOBITIES    REFERRED   TO. 


Ixvii 


♦Page 

llollwo,  March  &  Co.  v.  The  Court 
of  Wards,      2,  10,  17,  33*,  34,  35, 

36,  38 
Monkhouse  v.  Hay,  678 

Monro,  ex  parte,  679 

jSIontefiore  v.  Lloyd,  118 

Moody  V.  King,  741 

Moon,  ex  parte,  755 

Moore,  ex  parte,  738,  741 

V.  Barthrop,  653 

V.  Davis,  10,  11 

Moor  v.  Hill,  287 

Morans  v.  Armstrong,       124,  135,  169 
Moravia  i\  Levy,  564 

Morehouse  v.  Newton,  537 

Moreton  t.  Ilardern,  149 

Morgan's  case,  or  Morgan,  ex  parte, 

314 

Morgan  v.  Hardy,  708,  751 

%\  Knight,  639 

V.  Marquis,       61,   212,   218,    568, 

569,  672*,  676 

v.  Rowlands,  260 

Morier,  ex  f  arte,  659,  660 

Morison  v.  Moat,  415,  479,  543 

«.  Thompson,  307 

Morley,  ex  parte,       327,  337,  353,  699 

V.  Baker,  564 

1).  Newman,  454 

V.  Strombom.  271,  357 

V.  White,       '  599,  649 

Morris,  ex  f  arte  (10  Jur.),  642 

(Mon.),  753 

v.  Barrett,         322,  323,  331*,  341 

V.  Colman,  541*,  546 

V.  Harrison,  512 

11.  Kearslej^,  344*  479 

V.  Livie,  364 

v.  Morris,  490 

Morrison,  ex  parte,  315 

Morrow  v.  Saunders,  559 

Morse  V.  Wilson,  16 

Moss,  ex  parte,  715 

Mosse  v.  Salt,  513 

Motion,  re,  649,  652 

Mouflet  V.  Cole,  437 

Moulston  V.  Wire,  272 

Mowatt   and   Elliott's   case,    or 

Mowatt,  cxparte,  386 

Moxou  v.  Bright,  458 

Mulford  V.  Griffin,  213 

Mullett  V.  Hook,  281 

Mullins  V.  Collins,  149 

Runnings  v.  Burj-,  495 

-Munster  v.  Cox,  266,  272 


Munster  v.  Railton, 
Munton,  ex  parte, 
Murray  v.  Flavell,       85, 

«.  Moore, 

V.  Pinkett, 

V.  Somerville, 

V.  Walter, 
Murtagh  v.  Costello, 
Murton,  ex  p)arte,     328, 
Musgrave  t.  Drake, 
Musson  v.  JMay, 
Mutton,  re, 
Mycock  «.  Beatson, 
Myers  v.  Edge,  ■ 

V.  Willis, 


♦Page 

266 

639 

434,  435,  479 

272 

584 

187 

503*,  504* 

346 

633,  684,  700 

169 

451,  591 

751 

484* 

118 

147 


Nanson  v.  Gordon,  692,  722 

Nash,  ex  parte,  636 

V.  Hodgson,  227 

National  Bank,  ex  parte,  140 

Bolivian    Navigation     Co.     v. 

Wilson,  576 

Funds  Assurance  Co.,  re,  200 

Permanent    Benefit    Building 

Soc,  -  191 

Natusch  V.  Irving,      316*,  317*,  318*, 

319 
Navulshaw  v.  Brownrigg,  140 

Naylor  v.   Mortimore,  645 

Neale  v.  Turton,       116,  565,  567,  569 
Neave  «.  Avery,  562 

Neilson  v.  Mossend  Iron  Co.,  122.  410, 
411,  413,  429,  571 
Nelson  v.  Bealby,  340,  406 

V.  Cherrell,  639 

Nerot  V.  Buruand,    84,  323,  326*,  327, 
353,  583,  588 
Nesbit  V.  Smith,  375 

Nesbitt  V.  Howe,  282 

Nettleship,  ex  jmrte,  119 

Newbigging  v.  Adam,      369,  481,  484* 
New   Brunswick   Piailway    Co.    v. 

Muggeridge,  480 

Newell  «.  Townsend,  359,  542 

Newen  v.  Wetten,  514,  520 

Newland  v.  Champion,  613 

Newman  v.  Jones,  149 

Newmarch  v.  Clay,  229,  234 

Newry   and   Enniskillen    Railway 

Co.  V.  Coombe,  75 

V.  Moss,  584 

New   Sombrero  Phosphate  Co.    ■;;. 

Erlanger,  480,  595,  596 

Newsome  v.  Coles,      43*,  45.  46,  217, 

'  222,  588 


xlviii 


AUTHORITIES   REFERKED   TO. 


Newton  v.  Belcher,  88,  207 

V.  Chantler,  628 

V.  Liddiard,  88 

V.  Taylor,  518 

New  York  Life   Insurance   Co.  v. 

Statham,  '*2 

Nicholas,  ex  parte,  740 

Nicholls  ?'.  Diamond,  186 

V.  Dovvding,  84,  86*,  128 

Nicholson  v.  Revill,  224 

V.  Ricivetts,  125,  131,  182 

Noke  V.  Ingham,  224 

Nokes,  ex  jjarte,  571,  635 

Nolan  V.  Fritzgerald,  272 

Nolte,  ex  parte,  732 

Norfolk,  ex  parte,  702,  732 

Norris  v.  Cottle,  24 

North    British    Insurance   Co.    v. 

llallett,  680 

Northumberland  v.  Todd,  117 

Norton,  ex  parte,  628,  629 

r.  Cooper,  152 

V.  Russell,  517 

V.  Seymour,  86*,  89,  185*. 

Norway  r.  Rowe,  469*,  475,  553* 

Norwich     &     Lowestoft     Co.     i\ 

Theobald,  222 

Yarn  Co.'s  case,  The,  875 

Noteley,  ex  jwrte,  16,  564,  635* 

Nottidge  V.  Pricliard,       225,  228,  236, 

294 
Nottingham,  ex  farte,  78,  701,  730 
Nottingham  Bank,  ex  parte,  680 

Nowcll  V.  Nowell,  403 

Noyes-y.  Crawley,  509,  510*,  511 

Nutting,  ex  parte,  680 

Oakeley  v.  Pasheller,    248,  251*,  254> 

450,  597 
Oakes  v.  Turquand,  480 

Oakford  v.  Eui'opean  and  American 

Steam  Ship  Co.,  244*,  252,  253 

O'Brien  v.  Cooke,  541 

Ockcnden,  ex  parte,  658 

Odcll  V.  Cormack,  Add.  to  p.  180 

Ofhcial  Receiver,  ex  parte,  re  Gould, 

Add.  to  p.  028 
Ogilvj'-,  ex  jyarte,  737 

Ogle,  ex  piarte,  720 

Oidakcr  v.  Lavender,        377,  407,  421 
Oidficld  r.  Preston,  594 

Olive  v.  Smith,  656 

Oliver  v.  Hamilton,  546 

Olknow,  e.;;;x(r^  729 

O'Mealey  v.  Wilson,  73 


Omychund  v.  Barker, 
Ord,  ex  parte, 
V.  Portal, 
O'Reardon,  ex  parte, 
O'Reilly  r.  Richardson, 


Page 
890 
683 

274,  285 

640*  641 

180 


Oriental  Banking  Co.  v.  Coleman,    627 
Oriental  &  Commercial  Bank,  re,    374, 

375 
Financial  Corporation,  ex  jyarte, 

255 

Orr  V.  Chase,  137,  194,  283,  596 

Osborne  v.  JuUion,  20 

V.  Harper,  564 

"V.  Ilavpur,  56& 

Oswald  r.  Thompson,  631 

Others.  Iveson,  193,  196 

Ottlcy  V.  Browne,  108* 

Owen,  ex  parte  (4  De  G.  &  Sm.),   328, 

329*,  334,  337*,  700 

(13  Q.  B.  D.),  620,  634,  669, 

670 
v.  Body,  30 

v.  Delamere,  47,  606,  609 

11.  Homan,  255 

V.  Van  Uster,  87,  186* 

V.  Wilkinson,  294 

Owston  V.  Ogle,  563 

Oxford   Benefit   Building  Society, 

o-e,  161,  199 

Pachelok,  ex  parte,  640,  645 

Paddon  v.  Richardson,  618- 

Padstow  Total  Loss  Association,     102 
Page,   ex  parte,  635,  729 

V.  Cox,       85,  43  3,  434*,  435,  479 


t\  Newman, 
Paice  V   Walker, 
Palcy  V.  Field, 
Palliser  v.  Gurney, 
Palmer's  case  (1  Mer.), 


389 

177,  180 

227 

78- 

250,  253, 

596 

101 


Palmer,  re  (2  A.  &  E.), 

V.  Justice  Assurance  Societj^  137 
V.  Mallet,  437,  and  Add.  to  p.  207 
V.  Mitchell,  523,  015,  617 

Panama  and  South  Pacific  Tel.  Co. 

V.  India  Rubber  Co.,  481 

Pannell  v.  Hurley,  162 

Pardo  V.  Bingham,  258^ 

Pare??.  Clegg,  92,260,464 

Pariente  ■!;.  Lubbock,  113,  117 

Parker,  ex  parte  (Cooke's  B.  L.),    695, 

721 
(2  M.  D.  &  D.),  208,  706 

V.  Bloxham,  514,  018- 


AUTHORITIES   REFEKKED    TO. 


XllX 


♦Page 

Parker  v.  Gossage, 

425 

V.  Hills, 

30r,  329 

v.  McKenna, 

200,  306 

V.  Morrell, 

129 

V.   Pistor, 

357,  359 

V.  Ramsbottom, 

573,  741 

».  Wells, 

508 

Pai-kes,  ex  parte, 

630 

Parkin  v.  Carruthers, 

214,  221 

Parkinson  v.  Hanbury, 

514 

Parr,  ex  parte  (4  D.  &  Ch.),  120 

(18  Yes.),  644 

(1  Rose),  715 

Parry,  ex  parte,  681 

Parsons  v.  Hay  ward,         517,  527>  571 

Part,  ex  j}arte,  695 

Pascoe  11.  Swan,  59 

Patent  File  Co.,  140 

Paterson  v.  Gandasequi,  177 

V.  Zachanah,  215 

Patten  v.  Rea,  148 

Pawsey  v.  Armstrong,     10,    14,    330, 

385*,  443,  555,  558 

Payler  v.  Homersbam,  238 

Pavne,  ex  2)nrte  (De  Gex),  635 

'  (11  Cb.  D.),  627 

V.  Hornby,         326,  353,  588,  6;!2 

Payntcr  v.  Houston,  601,  612 

Peaceable  v.  Read,  502 

Peacock,  ex  parte,  710 

V.  Peacock,      84,   217,   301,   348, 

349,  540,  551,  552,  571 

Peake,  ex  parte  (1  Mad.),      335,    336, 

485,  486,  573,  098 

(2  Rose),  732 

Pearcc  v.  Cliamberlain,  363,  433,  590, 

591 

V.  Lindsay,  572 

V.  Slocombe,  720 

Pearl  v.  Deacon,  228 

Pearson,  ex  parte,  629 

i\  Pearson,  440 

V.  Scott,  136 

V.  Skelton,  878,  560 

Pease  v.  Hewitt,  68,  69,  581 

V.  Hirst,  117,  227,  274 

Peat,  ex  parte,  642 

V.  Jones,  658 

Pedder  v.  Mayor  of  Preston,  290 

Pedgrift  v.  Cbevallier.  99 

Peek  V.  Gurney,  '      410,  480,  595 

Peel  V.  Thomas,  90 

Peele,  ex  parte,  190,  208,  703,  7o5 

Peirse  v.  Bowles,  1;;0 

Pelly  V.  Wathen,  120 


*Page 
Pemberton,  ex  parte  (1  M.   D.  & 

D.),  640 

ex  parte  (1  Deac),  687 

V.  Oakes,  118,  230,  234 

Penkivil  v.  Connell,  188* 

Pennell  v.  Dawson,  629 

V.  Deffell,  162,  228 

V.  Reynolds,  629 

V.  Walker,  453 

Penney  r.  Goode,  504 

Penny  i\  Pickwick,  475 

Penoyer  v.  Brace,  298 

Perens  v.  Jobnson,      303,   304,    360*, 

391,  493 
Perfect,  ex  parte,  713 

Perring  v.  Hone,       130,  567,  568,  569 
Perrott  v.  Bryant,  19 

Perry  v.  Barnett,  370,  372 

V.  Jackson,  258 

V.  Walker,  636 

Peter  v.  Rich,  376 

Peters  v.  Anderson,  226,  227 

Petre  v.  Petre,  260 

Petri e  -v.  Hannuy,  105 

Petlman  v.  Keble,  372 

Petty  V.  Smith,  272 

Pettyt   V.    Janeson,      408,    409,    429, 

430*   573 
Pharmaceutical   Soc.  v.  The  Lon- 
don    and    Provincial     Supply 
Assoc,  0,  98,  %9 

Phelps  V.  Lyle,  274,  276 

V.  Prothero,  275 

V.  Sproule,  516 

Phelps,  Stokes  &  Co.  i\  Comber,     711 
Phene  v.  Gillan,  374 

Philips  v.  Atkinson,  542,  549 

V.  Knightley,  454 

V.  Philips,  284,  342 

Phillips,  ex  parte,  681,  682 

«.   Clagett,  145*,  140 

V.  The  Commissioners  of  In- 
land Revenue,  450 
■y.  Homfray,                                 595 
V.  Hopwood,  639 
V    Hunter,  676 
V.  Phillips  (IM.  &K.),   331,  3&2* 
344*,  347 
v.  Phillips  (Finch.),  610 
V.  Phillips  (3  Hare),  134 
«.  Ward,                                       255 
Phillpotts  r.  Jones,                            227 
Philps  V.  Hornstedt,  629 
Pliipps,  ex  parte,  630 
Phoenix  Life  Insurance  Co.,  The,    163 


1 


AUTHORITIES   REFEERED   TO. 


♦Page 
Phosphate  of  Lime  Co.  v.  Green,  149 
Phosphate  Sewage  Co.  v.  Haitmout, 

490 
Pickard  v.  Sears,  40 

Pickering's  case,  ITV 

Pickering  v.  Pickering,  502,  537 

V.  Kigby,  503 

Pidgeon  v.  Burslem,  97 

Piercy  r.  Fynney,     136,  267,  270,  294 
V.  Young,  453 

Pigott  V.  Bagley,  433 

Pile  v.  Pile,  439 

Piilans  V.  Harkness,  369,  482*,  517 
Pilley  v.  llobinson.  Add.  to  p.  264 
Pilling  V.  Pilling,  329,  334,  390,  409 
Pim  v.  Harris,  389 

V.  Wilson,  636 

Pinckney  v.  Hall,  129 

Pinder  v.  Wilks,  218 

Pine,  ex  pai'te,  721 

Pinkerton,  ex  parte,  732 

Piukett  V.  Wright,  584,  652,  680 

Pitt  «.  Cholmondeley,  513 

Plows  v.  Baker,  453 

Plowden,  ex  jjarte,  741 

Pluraer  v.  Gregory,        132,  151,  156=^, 

250,  284 
Pluinmer,  re,  716 

Pointou  V.  Pointon,  612 

PollexEen  v.  Sibson,  266 

Ponton  V.  Dunn,  434*,  435 

Poole,  ex  parte,  642 

Pooley  V.  Driver,        4,  10,  11,  12,  16, 
17,  33,  34,  35,  36,  38* 
Pope  V.  Haman,  357 

Popple  V.  Sylvester,  255 

Poppleton,  ex  parte,  102 

Pordage  v.  Cole,  416* 

Porter  v.  Lopes,  59 

V.  Taylor,  134 

Porthouse  v.  Parker,  141 

Portland,  The,  73 

Pott  t.  Ejton,  28,  30*,  43,  89 

Potter  «.' Commissioners  of  Inland 

Revenue,  439,  450 

V.  Jackson,  402,  518 

Potts  V.  Pell,  72 

Poulson,  ex  jHirte,  161,  162,  702 

Powdrell  v.  Jones,  419* 

Powell,  ex  ]xirte,  753 

V.  Head,  62 

V.  Lay  ton,  280 

Powis  T.  Harding,  491 

Powles  r.  Page,  141 

V.  Hargreaves,  713 


♦Page 

Prance  v.  Sympson,  260,  509,  511 

Prendergast  v.  Turton,    469*,  470,  475 

Prentice  v.  Prentice,  557 

Prescot,  ex  parte  (1  Atk.),  658 

Prescott,  ex  parte  (Mon.  &  Ch.),     739 

(4  D.  &  C),  714 

Preston  v.  Strutton,  543,  564,  565 

Price,  ex  parte,  659 

V.  Barker,  237 

V.  Groom,  21*,  30,  681 

V.  Hewitt,  74 

V.  Moulton,  255 

Prickett  v.  Down,  668 

Priestly  v.  Pratt,  677,  679,  682 

Primrose  v.  Bromley,  194 

Pritchard  v.  Draper,  128,  225 

Pritt  V.  Clay,  513,  516 

Professional  Life  Assurance  Co.,     377 

Prole  V.  Masterman,  382,  495* 

Proudfoot,  ex  parte,  639 

Puller  V.  Roe,  296 

Pulling  V.  Tucker,  631 

Pulsford  V.  Richards,  480,  481 

Punuett,  ex  jmrte,  439 

QuAKTEKMAiNE  V.  Bittlcston,  677 

Quincey  c.  Sharp,  260 

Quintin,  ex  parte,  655,  660 

Raba  v.  Ryland,  140 

Rackstraw  v.  luiber,  564 

RadcliHe  v.  Rush  worth,  13,  88 

Radenhurst  v.  Bates,        285,  457,  563 
Raikes  v.  Todd,  228 

Raleigh,  ex  parte,  254,  704,  706 

Ralph  «.  Harvey,  87,  89 

Ramazotti  v.  Bowring,  295 

Ramsbotham  v.  Cator,  673 

Ramsbottom  v.  Duck,  673 

V.  Lewis,  667,  673 

V.  Parker,  485,  486 

Ramskill  v.  Edwards,  377,  707 

Randall  v.  Randall,         343*,  346,  317 
t>.  Raper,  374 

Randegger  v.  Holmes,  453 

Randell,  Saunders  &  Co.  v.  Thomp- 
son 452 
Randleson,  ex  parte,  228 
Ranelagh  v.  Hayes,  375  and  Add. 

to  p.  375 

T.  Melton,  424 

Ransford  v.  Copeland  96 

Rapp  v.  Latham,  146,  164*,  165 

Rasbothani    v.    Shropshire    Union 

Railway  Co.  503 


AUTH0KITIE8   KEFEKKED   TO. 


*I'age 

Rathbonc  v.  Drakeford  272 

Kavenscroft,  ex  parte,  641,  642 

Rawbone,  re,  679 

Rawlings  v.  Lambert,  5'J2 

Rawlins  v.  Wickham,      257,  869,  483* 

Rawlinsou  v.  Clarke,  13,  563 

V.  Moss,  120 

Rawson,  ex  parte  (1  V.  &  B.),         640 

(1  Rose),  641 

(Jac),  721,  724,  737 

V.  Samuel,  291,  543 

Ravvstoiie  v.  Parr,  193,  196 

•Ray  V.  Davies,  289,  647 

Raymond's  case,  450,  493 

Raynard  v.  Chase,  95 

Read,  e.v  parte,  718 

t\  Anderson,  371 

V.  Bailey,  734  and  Add.  to  p.  143 

V.  Bowers,  542,  547 

Reade  v.  Bentley,  14,  122* 

V.  Woodrooffe,  508 

Redgrave  v.  Hurd,  163,  481 

Kedmayne  v.  Forster,       364,  366,  461, 

494,  498 

Redpath  r.  Wigg,  30 

Redway  r..  Sweeting,  51 

Reed  and  Bowen,  ex  parte,  754 

and  Steele,  ex  parte,  629 

v.  White,  243,  248*,  253,  255 

Reese  River  Mining  Co.  v.  Smith,    491 

Reeve,  ex  parte,         720,  721,  728,  742 

T.  Whitmore,  537 

Reid's  case  (24  Beav.),  12 

Reid,  ex  parte  (2  Rose),  695,  728 

v.  Hollinshead,         13,  49,  53,  140 

V.  Langlois,  504 

Reilly  v.  Walsh,  304,  341,  471* 

Renuick,  ex  parte,  640 

Rensburg,  ex  yarte,  678 

Revcll,  ex  parte,  703 

R.  «.  Arnaud,  325 

«.  Atkinson,  457 

V.  Bren,  457 

V.  Burgess,  457 

■?;.  Collector  of  Customs,  342 

V.  Essex,  372 

■».  Evans,  457 

Id.  Fox,    '  100 

V.  Frankland,  103 

V.  Gaby,  288 

v.  Hodge,  340 

v.  Leech,  147 

V.  Loose,  457 

V.  Macdonald,  13,  495 

■».  Manning,  147 


*Page 

R.  t.  Marsh, 

457 

r.  Proud, 

457 

V.  Robson, 

2,  50,  457 

T.  Rock, 

340 

v.  St.  Martin's, 

117 

v.  Sanderson, 

340 

\\  Scott, 

288 

T.  Smith, 

457 

v.  Staiuer, 

91 

V.  Strany  forth, 

149 

■».  Warburton, 

457 

t\  Webster, 

457 

«.  Whitmarsh, 

50,  93 

Reynell  v.  Lewis, 

44,  89 

Reynolds  ».  Bowley, 

690*,  691 

«.  Bridge, 

438,  455 

Rheam  v.  Smith, 

501,  543 

Rhodes  r.  Forwood, 

436 

«.  Rhodes, 

391* 

».  Smethurst, 

259 

Rice  V.  Gordon,      488,  489*,  597,  600, 

601 
Richards  w.  Davies,  497 

•0.  Heather,  288 

Richardson,    ex  parte   (3  Deac.  & 

Ch.),  635* 

(Buck,  202,  3  Madd.),       609,  707 
(Mon.  &  Ch.),  689 

(Buck,  480),  682 

■B.  Bank  of  England,  111,  115,401, 
402,  505,  568 
v.  Gooding,  647 

«.  Hastings,      460,  461,  462,  463, 

499 

V.  Horton,  198 

V.  Liarpent,  462 

Riches,  re,  129,  171,  172 

Richmond  v.  Heapy,  268,  269 

Ricketts  v.  Bennett,  127,  132,  133,  190 

Ridgway  v.  Clare,  599,  601* 

V.  Philip,  49,  88* 

Ridler,  re,  654 

Ridley  v.  Taylor,  169,  172 

Ridout  V.  Brough,  659 

Rigden  y.  Pierce,  429,  555 

Right  ».  Cuthell,  139 

Ring,  ex  parte,  725 

Ripley  v.  Waterworth,  344* 

Rishton  v.  Grissell,  390,  393,  493,  555 

Roberts,  ex  parte,  6-iO 

I".  Eberhardt,  56,  57,  331, 

545*,  550,  552,  580 

r.  Hardy,  73 

v.  KufHn,  614 

Robertson  «.  Lockie,        425,  572,  579 


Hi 


AUTHORITIES    REFERRED   TO. 


♦Page 
Robertson  v.  Quiddington,     439,  445, 

61!) 
V.  Southgate,  388,  459 

Robey  &  Co.'s  Perseverance  Iron 

Works  t).  Oilier,  711 

Robinson  (executors')  case  (6  De  G. 

Mc.  &  G.),     b67,  377,  385,  386 
ex   parte   (3  D.    &  0.    and  1 

M.  &  A.),  667,  668,  G73* 

(4  D.  &  C),  737 

V.  Alexander,     259,  508,  509,  591 

V.  Anderson,       49,  84,  349,  350*, 

380,  478 

V.  Ashton,  329 

V.  Davison,  4X9 

V.  Field,  508 

V.  Hadley,  549 

V.  Hofman,  1^7 

V.  Kitchin,  97 

V.  MacDonnell,  678 

V.  Marchant,  279 

V.  Preston,  51 

1).  Thompson,  314,  512 

V.  Wilkinson,     178,  245,  253,  281 

Robley  v.  Brooke,  323,  350 

Robson  V.  Curtis,  567 

V.  Drummond,  276,  287* 

V.  M'Creight,  495 

Rock  V.  Lazarus,  H'^ 

V.  Mathews,  552 

Rodgers  v.  Maw,  240,  252,  450 

Roe  V.  Galliers,  678 

Rogers  v.  Harvey,  348 

V.  Mackenzie,  695 

V.  Price.  373 

Rolfe  V.  Flower,  208,  249,  706 

Roope  V.  D'Avigdor,  457,  492 

Rooth  V.  Quin,  170,  210,  222,  702 

Rose,  ex  parte,  680 

V.  Hart,  658* 

Ross,  ex  parte,  658,  660 

V.  Parky ns.  10,  13 

RothwcU  v.  Humphries,  131 

Routh  V.  Peach,  454,  515 

V.  Webster,  446,  544 

Rowe  V.  Wood,  56,  301,  404,  518,  550. 

553* 

Rowland  and  Crankshaw,  re,  690,  700 

Rowlands  v.  Evans,        425,  552,  553*, 

555,  556,  558*,  578*   591 

Rowlandson,  ex  parte  (I  Rose,  89),  28, 

30,  640,  642 

(1   Rose,   416,   and  2  V.  &  R. 

172),  334,  338,  698 

(3  P.  &  W.  405),        743,  744,  746 


♦Page 
Rowley  v.  Adams,  328,  347,  488,  537, 

612 
V.  Home,  222 

Roxburghe  v.  Cox,  297 

Royal  Bank  of  Scotland   v.    Com- 
mercial Bank  of  Scotland,  712 
Ruffin,  ex  parte,     334,  335,  336*,  352, 
587,  697*   69& 
Rule  V.  Jewell,        470*,  472,  473,  475 
Rumboll,  ex  parte,  649 
Ruppell  «.  Roberts,                    144,  178 
Russell,  ex  parte  (19  Cb.  D.  588),   654 
re  (19  Ch.  D.  432),  620 
V.  Austwick,                      310*,  311 
V.  Pellegrini,                                453 
■p.  Reece  177 
V.  Russell,          426,  453,  487,  575 
Russell's  Patent,  62 
Rutherford,  ex  parte,                 695,  720 
Ryall  V.  Larkin,                                  65& 
V.  Rowles,         354,  655,  677,  678, 
679,  682,  684 
Ryan,  re,                                             341 
V.  Mackmath,                               214 
Ryhope  Coal  Co.  v.  Foyer,  5 

Sadler,  ex  parte,  731 

V.  Lee,      77*,  153*,  161,  577,  596 


V.  Nixon,  566 

Saftery,  ex  parte,  629,  630,  632 

St.  Aubyn«.  Smart,  151,  152,  159 

St.  Barbe,  ex  parte,  726,  736 

St.  James's  Club,  50- 

Saiuter  v.  Ferguson,  455 

Salomons  v.  Nissen,  141,  26T 

Salting,  ex  parte,  661,  718=^ 

Saltoun  V.  Houstoun,  451 

vSammon,  ex  parte,  715 

Sander  v.  Sander,  578 

Sanders  v.  King,  607 

Sanderson  v.  Brooksbank,  169- 

Sandford  v.  Ballard,  58,  59 

Sandilands  v.  Marsh,  138* 

Sangster  v.  Mazarredo,  87,  89,  128 

Sargant  v.  Read,  548,  550,  553 

Saull  V.  Browne,  507,  508 

Saunders  v.  Druce,  611 

Saville  v.  Robertson,  204*,  205 

Savin,  re,  720 

Sawver  v.  Goodwin,  Add.  to  p.  163 

Sayer  v.  Benuet,  577,  578,  579 

Scarf  V.  Jardine,  40,  42,  46*,  47,  197*, 

211,  221,  256,  286,  702,  706 

Scarth,  ex  parte,  678 

Schofield,  ex  parte,  714,  7ia 


AUTHORITIES    KEFEBRED   TO. 


liii 


♦Page 
Scholefield  v.  Heolield,  591 

Scholey    v.    Central    Rail.    Co.    of 

Venezuela,  490 

Scott  V.  Avery,  452 

V.  Beale,  209,  230,  2-31 

V.  Franklin,  289 

V.  Godwin,  278 

V.  Izon,  609,  723 

T.  Mcintosh,  567 

V.  Miller,  100 

V.  Milne,  467 

V.  Rayment,  476 

V.  Surman,  162 

Scuderaore  v.  White,  509 

Sculthorpe  v.  Tipper,  612 

Seddon,  ex  parte,  254,  704 

V.  Connell,  462,  463,  501 

Sedgwick's  case  (ok,  e.c  jmrte) ,  382,  386 

i\  Daniell,  566 

Sedgworth  v.  Overend,  278,  279 

Seeley  v.  Boehra,  494,  502 

Seligmann  r.  Le  Boutillier,  453 

Selkrig  v.  Davies,  719 

Sehvyn  v.  Harrison,  374 

Senhouse   v.    Christian,       468*.     469, 

473,  475 

Seioka  v.  Kattenburg,  78 

Sewell  V.  Bridge,  516 

Seymour  t\  Bridge,  371 

Shack  T.  Anthony,  255 

Shackell  v.  Rosier,  370 

Shackle  ®.  Baker,  440 

Shakeshast  and  others,  ex  parte,    722* 

Shakespear,  re,  78 

Shallcross  «.  Oldham,  309 

Shanks  v.  Klein,  341 

Sharon  Coal  Corp.  v.  Fulton  Bank,  79 

Sharp,  ex  parte,  041,  642 

V.  Milligan,  139 

V.  Taylor,  91,  107*,  108 

V.  Warren,  568 

Sharpe  v.  Cummings,  52,  349 

V.  Gibbs,  255 

Sharpley  v.  Louth  and  East  Coast 

Railway  Co.,  490 

Shaw,  ex  jxirte,  707 

®.  Benson,  102,  103 

«.  Ching,  508 

T.  Gait,  13,  32* 

V.  Harvej'',  87 

V.  Picton,  389 

Sneeham  v.  Great  East.  Rail.  Co.,     62 

Sheen,  ex  parte,  690,  742 

Sheffield  Gas,  &c.  Co.  v.  Harrison,  476 

Shell,  ex  x>ciTte,  37 


♦Page 
Shelley,  re,  680 

Sheldon  i\  Rothschild,  657 

Shepherd,  ex  parte,  716 

V.  Allen,  579 

Sheppard,  ex paite  (19  Q.  B.  D.),  200, 

745,  749 

(Mon.  &  Bl.),  695 

V.  Baillie,  280 

V.    Oxenford,      107*,    463,    499*, 

500,  546*,  521, '552 

Sheriff  of  Middlesex,  ex  parte,         649 

Sherman  v.  Sherman,  467* 

Sherry,  re,  227,  230 

Shipton  V.  Thornton,.  187* 

Shirreff  t.  Wilks,  173*,  209 

Showier  t.  Stoakes,  135,  272 

Shrubsole  ^^  Sussams,  629,  679 

Sibley  V.  Mintou,  463 

Sibson  ?.'.  Edgeworth,  463 

Sichel  V:  Mosenthal,  476 

Siddall,  re.  50 

Siebert  f>.  Spooner,  627 

Siffkin  ».  Walker,  187 

Sillitoe,  ex  parte,    721*,  725,  726,  727, 

734,   736 

Silver  v.  Barnes,  50 

Sim  t\  Sim,  512 

Simmons,  re,  644 

«.  Leonard,       409,  429,  431*,  573 

V.  Swaine,  454 

Simms  n.  Barry,  195 

Simons  v.  Johnson,  238 

Simpson,  re  (9  Ch.),  337,  698,  699 

ex  parte  (De  Gex),  631 

claim  (36  Ch.  D.),        Add.  to 

pp.  126,  138 
V.  Chapman,   461,  524,  532*,  617, 

619* 
V.  Henning,  238,  251,  748 

v.  Vaughan,  194,  596 

%\  Westminster  Palace   Hotel 
Co.,  314 

Sims  V.  Bond,  275 

n.  Britain,  275 

t\  Brutton,      151,  156*,  157,  159, 

165 

Simson  v.  Cooke,  118 

V.  Ingham,  227,  232* 

Sinclair,  re,  665 

r.  Wilson,  630,  681 

Singer's  Man.  Co.  «.  Wilson,  114 

r.  Loog,  114 

Skaife  r.  Jackson,  270 

Skeet  r.  Lindsa)^  511 

Skinner  r.  Stocks,  276,  277 


liv 


AUTHORITIES    KEFERRED   TO. 


Skipp  v.  Ilurwood, 
Skirving  c.  Williams, 
Slater,  ex  parte, 

V.  Lawson, 

V.  Willis, 


3-40,  352,  359 

G15 

22.4,  703 

263 

324 


Sleech's  case,  161,  194,  200,  250,  253, 

596,  59-7,  602,  752 

Slee,  re,  682 

Slim  r.  Crouchcr,  481 

Slip'p^'i'  »•  Stidstone,  291,  341 

Small  V.  Attwood.  162,  404,  480 

Smallcombe  v.  Olivier,  643 

SiiKirt,  ex  jjnrte,  71-'i 

Smith's  case  (4  Ch.),  98 

Smith,  ex  parte  (Buck),  081,  741 

(4Deac.  &  Ch.),  683 

(1  Gl.  &  J.  74,  and  6  Madd. 

2),  734,  738 

(1  Gl.  &  J.  256),  640,  747* 

(3  Madd.),  328,  681 

(2  Mod.  &  A.),  •         69.1 

(1  M.  D.  &  D.),  706 

(2  Rose),  733 

(14  Q.  B.  D.),  725 

(5  Ves.),  583,  637,  648 

V.  Anderson,  5,  101,  102 

V.  Ayres,  607 

V.  Baily,  129,  188 

V.  Ball,  112 

V.  Barrow,  564,  567 

V.  Braine,  169 

V.  Cannan,  628 

V.  Chadwick,  480,  481,  482 

V.  Craven,  190,  203 

V.  De  Silva,  352,  354,  648 

V.  Duke  of  Chandos,        408,  536 
V.  Everett,        440,  443,  444,  488, 
527,  614,  616 
V.  Fromont,  544 

V.  Goddart,  672 

v.  Harrison,  360 

V.  Howth,  562 

V.  Jameson,  161,  240 

V.  Jar  ves,  188 

v.  Jeyes,         406*,  466,  542,  543, 
546,  551,  580 
T.  Johnson,  131 

V.  Leveaux,  458 

V.  Lindo,  97 

V.  Mawhood,  95 

V.  jMules.  331,  415,  428*,  558 

V.  Oriell,  218,  569,  671,  072 

V.  Parkes,  292*   304 

V.  Plummer,  355 

V.  Smith  (3  Giflf.),  194,  620* 


♦Page- 
Smith  (5  Ves.),  323,  325,  329 
«.  Snow,  460 
V.  Stokes,  218,  340,  569,  671,  672 
V.  Timms,  627 
V.  Topping-,  681,  682 
V.  Watson,       15,  28,  36,  49,  135, 

328 

v.  Wigley,  229 

V.  Winter,  215*,  219,  220 

Smout  n.  Ilbury,  211 

Smyth,  ex  parte,  716,  750 

Snaith  v.  Burridge,  172 

Sna))c,  ex  parte,  739 

Sneyds,  ex  parte,  633 

Snook  r.  Watts,  76 

Snowball,  ex  parte,  632,  604,  665 

Snowdon,  ex  j^arte,  375 

Soames,  ex  parte,  660 

Soci6te  Generale  de  !Paris  v.  Green,  714 

X.  Tramways  Union  Co.,  080 

Society  of  Practical  Knowledge  x. 

Abbott,  49  & 

Solly  r.  Forbes,  237* 

Solomon,  ex  parte,  714,  746 

V.  Medex,  279 

Solvency  Mutual  Guarantee  Co.  v. 

Freeman,  113 

Somerville  v.  Mackay,  311,  508- 

Somes  T.  Currie,  409 

South  Carolina  Bank  v.  Case,  182 

South  Sea  Co.  t.  Wymondsell,         260 
South    Wales   Atlantic   Steamship 

Co.,  103 

Southwell  V.  Bowditch,  180 

Spackman  v.  Miller,  682 

Spark  t.  Heslop,  374 

vSparrow,  ex  parte,  629,  631 

Spears  v.  The  Lord  Advocate,  340' 

Spenceley  «.  Greenwood,  215,  244 

Spencer  x.  Billing,  89 

v.  Harrison,  348- 

X.  Spencer,  515* 

Spittal  X.  Smith,  486* 

Spottiswoode's  and  Amsink's  case,  367^ 

369 
Sprague,  expmrte,  336,  337,  680,  686*,. 

700- 
Spurr  X.  Cass,  27& 

Stables  v.  Eley,  47*   89,  149,  214 

Stackwood  v.  Dunn,  29G 

Staddon,  ex  jiarte,  657,  662* 

Stahlschmidt  x.  Lett,  38T 

Staiubank  x.  Fernlev,  482 

Stainton  x.  Carron  Co.,  384,  488,  511*, 
513,  537,  Oil*  6ia 


AUTHOKITIES    REFERRED   TO. 


iv 


Stanborough,  ex  parte, 
Stanger  v.  Wilkins, 
Stauiforth  v.  Fellowes, 
Stansfield  v.  Cubitt, 

V.  Levy, 
Stanton,  ex  2xii'ie, 
Iron  Co.,  re, 
Staples,  re, 
Stavers  v.  Curling, 
Stead  V.  Salt, 
Stedman  «.  Smith, 
Steel  V.  Lester, 
Steele  v.  Stuart, 
Steer  v.  Crowley, 
Steiglitz  «.  Eggington, 
Stephens,  ex  parte, 

V.  Brown, 

V.  Reynolds, 
Stephenson  v.  Chiswell, 
Sterndale  v.  Hankinson, 
Sterry  v.  Clifton, 
Steuart  v.  Gladstone, 


*P:lge 

704 

627,  628 

G59 

679,  081 

281 

718 

30 

208 

19,  416,  563 

129 

562 

14,  34,  149 

141 

450 

137 

654,  661*,  662 

729 

181* 

597 

228,  229 

92,  100 

402,  421,  426 


129. 


428,  430,  4-i4,  448,  575 
Stevens  «.  Benning,  114,  288* 

«.  Cook,  390,  391 

V.  South  Devon  Railway  Co., 

314,  352,  893 
Steward  v.  Blakeway,  55,  56,  331, 

334,  343,  846*,  347 


V.  Harkness, 
Stewart  v.  Forbes, 

V.  Gibson, 
Stewart's  case 
Stockteu  V.  Dawson, 


482 

349,  350 

93,  106 

536 

352,  353,  381, 

384,  489*,  528,  617,  688 

Stocker  -y.  Brocklebank,        13,  14,  563 

V.  Wedderburn,  476 

Stokes  V.  Lewis,  370,  373 

Stone,  ex  parte  (8  Ch.),  748 

re  (33  Ch.  D.),  36,  37 

V.  Marsh,  155*,  157 

Stonehouse  v.  De  Silva,  289,  638 

Stoveld,  ex  parte,  670 

V.  Bade,  234 

Stracey  v.  Deey,  295* 

Strachan  v.  Barton,  630 

Strang,  ex  parte,  657 

Strange  v.  Lee,  118 

Strangford  v.  Green,  129 

Streatfield,  Lawrence  &  Co. ,  re,     330* 

Street  v.  Rigby,  451 

Strelley  v.  Winson.  60,  62 


Strickland  v.  Symons, 
Strong  V.  Harvey, 


606,  607*, 
609,  610 
51 


*Pa^e 
Strother  v.  Willan,  85 

Stroud  V.  Gwyer,      162,  521,  524,  531, 

618 
Strutt,  ex  parte,  695 

Stuart  V.  Lord  Bute,         404,  503,  504 

».  Ferguson,  698 

Stubbs  V.  Sargon,  112,  118 

Studdy  V.  Saunders,  87,  89 

Stupart  V.  Arrowsmith,  467,  512 

Sturgis  V.  Darell,  259 

Sturt  V.  Hellish,  467 

Sturton  v.  Richardson,  560 

Styan,  ex  parte,  681 

Sully,  ex  parte,  680 

V.  A.  G.,  394 

Sumner?).  Powell,  196*,  595 

Sutton  «.  Clarke,  283 

V.  Gregory,  129,  169 

-y.  Tatham,  371,  372 

Swan  V.  Bank  of  Scotland,  95 

V.  Steele,  169,  181* 

Swift  v.  Jewsbury,  138,  165,  179 

®.  Winterbotham,  139,  165,  179 
Swindell  v.  Bulkeley,  259 

Swire  v.  Francis,  168 

®.  Redman,  244,  251,  252 

Syers  v.  Syers,     14,  22,  38,  555,  556*, 

557  572 
Sykes  «.  Beadon,  102,  104,  105*,'l06, 

107,  108 
Symes  v.  Hughes,  107 

Taitt,  ex  parte,         692,  729,  730,  733 
Tallis  V.  Tallis,  438* 

Tamplin  v.  Diggins,  063 

Tanner's  case,  24 

Tanner  v.  Smart,  260 

Tasker».  Shepherd,  113*,  114 

Tatam  «.  AVilliams, '  363,  509* 

Tate,  ex  parte,  094 

Tatlock  ».  Harris,  239 

Tattersall  ».  Groote,  66,  454 

Taunton   v.   Royal   Insurance    Co., 

128 
Taylor,  ex  parte  (5  De  G.  M.  &  G.), 

631 
(12  Ch.  D.),  37 

(18  Q.  B.  D.).  629,  630 

(8  De  G.  M.  &  G.),  74,  75 

(Mon.),  679,   687,  688,  689* 

(2  M.  D.  &  D.),         G85,  700,  707, 

732 
(2  Rose),  737 

n.  Best,  72 

V.  Bowers,  106,  107 


AUTHOEITIES   REFERRED   TO. 


♦Page 

Taylor  v.  Crowland  Gas  and  Coke 

Co.,  95 

V.  Davis,  404,  420,  542 

V.  Dean,  495 

V.  Fields,  340,  359,  647 

V.  Hare,  65 

D.  Ilaylin,  514 

V.  Kymer,  234 

v.  Lcudey,  106 
V.  Midland  Railway  Co.,  267,  270 


t.  Plurner., 

162 

V.  Rundell  (11  Sim.  &  Cr.  & 

Ph.)i 

503 

(1  Y.  &  C.  C.  C.  &  1  Ph.), 

404, 

503 

«.  Salmon, 

464 

V.  Shaw, 

512 

(L.  J.   James,  7th  March, 

1873), 

342 

Teague  v.  Hubbard,                   567, 

569 

Teasdalo  v.  Sander.son.                  5 

),  60 

Teed  v.  Elworthy, 

295 

Telet^raph  Despatch  Co.  v.  McLean 

436 

Telford  v.  Ruskin,                      502, 

503 

Tempest,  ex  2)arte.                     629, 

630 

Tenant  t\  Elliott,                     107*, 

108 

Tench  v.  Roberts, 

100 

Tennant,  ex  parte,                   13,  34,  38 

Terrell,  ex  parte,                647,  728, 

742 

Terry  v.  Tcrrj', 

619 

Tew  T.  Earl  of  Winterton, 

389 

Thacker  t\  Shepherd, 

277 

Thicknesse  r.  Bromilow,           130, 

169 

Thomas,  ex  parte, 

631 

V.  Athertou,      129,  367,  378, 

379, 

387 

V.  Clarke, 

147 

v.  Da  Costa, 

656 

V.  Edwards, 

51 

V.  Frazer,                             194 

596 

v.  Shillibeer, 

242 

V.  Thomas,                            59, 

567 

Thomason  v.  Frere,  289,  659,  667%  668 

Thompson,  ex  parte  (1  Rose),  642 

(3  Deac.  &  Ch.),"  726 

(2  M.  D.  &  D.),  723 


t\  Andrews, 

609 

v.  Brown, 

225,  228,  234,  236 

f.  Charnock, 

514 

f.  Cohen, 

752 

t}.  Davenport, 

177 

%.  Dunn, 

508 

i.  Hudson, 

228 

«.  Lack, 

237 

■».  Nat.  Bank  of  Toledo, 


43 


Thompson  ®.  Percival,  242*,  243,  247*, 

253 

V.  Ryan,  325 

«.  Speirs,  680 

t.  Waithman,  263,  597 

x.  "Williamson,  349,  380 

Thomson  t.  Anderson,  548 

V.  Thomson,  104,  109 

Thoinbury  v.  Bcvill,  93 

Thorne  v.  Smith,  224 

Thornton,  ex  pjarie,  716,  749 

«.  Dixon,  343*,  346,  347 

T.  Howe,  92 

x.  McKewan,  228 

V.  Proctei-,  383*,  467 

Thorp  V.  Iloldsworth,  491 

Thorpe,  ex  ptarte,  171,  703 

V.  Jackson,  596,  597 

Thwaites  t.  Richardson,  128 

Tibaldi  v.  Ellerman,  565,  567 

Till  V.  Wilson,  639 

Tinkler  v.  Walpole,  85 

Titner,  ex pjarte,  698 

Tittenson  'c.  Peat,  515 

Tobin,  ex  ptarte,  642 

Todd,  ex  imrte  (De  Gex),  738 

(19  Q.  B.  D.),  654 

T.  Eraly,  50 

V.  Studholme,  151 

ToUemache,  re,  703 

Tomkins  ».  Saffery,  629 

Tomlins  v.  Lawrence,  136 

Toovey  v.  Milne,  653 

Tophan.,  ex  pjarte  (1  Madd.),  715 

(8  Ch.),  629,  630 

Topping,  ex  parte,  599 

Torkington,  ex  farte,  633 

Tosh  T.  North  British  Build.  Soc,    12 

^o\\\m\x\,  ex  furte,  405 

V.  Copeland,  230,  404,  405, 

417*   506,  518,  528,  537 

Townend  v.  Townend,  528*,  615, 

616,  617 

Towns  v.  Mead,  258 

Townsend  r.  Ash,  492 

T.  Crowdy,  566,  567 

V.  Neale,  276 

Towushcnd  «.  Devavnes,  344* 

Travis  v.  Milne,        488,  494,  517,  522, 

531,  610,  613,  618 

Tredwen  x.  Bourne,  87,  90,  133 

Troughton  v.  Hunter,      215,  426,  446, 

544,  588 
Troup's  case,  390 

Trueman,  ex  parte,  588,  670 


AUTHORITIES    REFEEEED   TO. 


Ivii 


'Trueman  v.  Loder, 
Tunley  «.  Evans, 
Tupper  V.  Foulkes, 
V.  Haythorne, 
Turner,  ex  parte, 
V.  Borlase, 
v.  Burkinshaw, 
V.  Corney, 
V.  Dodwell, 
V.  Hardcastle, 


*Puge 
275 
128 
137 
140,  673 
734,  738 
475 
391 
537 
261 
627 


V.  Major,         443,  448*,  478.  479, 

527,  64J,  550 

V.  Morgan,  59 

V.  Key D all,  98 

Turnev,  ex  2^arte,  7 17* 

t'.' Bay  ley,  404,  493,  504 

Turquand,  ex  j)arte  (2  M.  D.  &  D.), 

21,  65,  727*,  738 

(14  Q.  B.  D.),  G77 

V.  Vanderplank,  631,  665 

«.  Wilson,  501 

'Twiss  «.  Massey,  692 

Twogood,  ex  j)ai'te,  G60 

V.  Swanston,  513 

Twort  V.  Twort,  59 

Twycross  v.  Grant,  595 

Twyford  v.  Trail,  161 

Tyrrell  v.  Hope,  574 

Undekwood  v.  Nicholls,  136 

■Union    Bank    of    Manchester,    ex 

jyarte,  678 

Unity     Banking     Association,     ex 

parte,  75,  702 

University  of  Cambridge  v.  Bald- 
win, 118 
Upfill,  ex  parte,  636 
Upton,  ex  parte,  729 
V.  Brown,  621 
Urquhart  v.  Macpherson,  260,  490 
Usborne,  ex  parte,  680,  685 
Usher  «.  Dauncey,                   187,  211* 

Yalpy  v.  Oakeley,  652 

Van  Sandau  v.  Moore,  462,  463,  571 

Vardon,  ex  parte,  687 

Varley  v.  Coppard,  336 

Yarney  v.  Hickman,  106 

Yaughan,  ex  parte,  745 

V.  Halliday,  712 

10.  Vanderstegen,  120,  439 

Yaux,  ex  parte,  677 

Yenables  c.  Wood,  14,  179 

Yenning  t.  Leckie,  568 
Yere  v.  Ashby,            89,  208,  285,  413 


Yernon  v.  Hallam, 
v.  Hankey, 
f.  Jeffreys, 
V.  Yawdry, 

Yice  V.  Anson, 


440 

668,  668 

273 

513 

42,  87*   348 


V.  Fleming,         170,  171,  174,  210 

Yickers  v.  Yickers,  432,  433 

Yillars,  ex  parte,  358 

Yiney  v.  Chaplin,  151 

Yining,  ex  parte,  695 

Yivers  v.  Tuck,  476 

Yoguel,  ex  parte,  694 

Yulliamy  «.  Noble,  47,  152,  199,  211, 

292,  294,  461,  590,  596,  605, 

006,  661,  662 

Yyse  V.  Foster,      102,  200,    461,   504, 

521,  523,  524,*  53 1,534*, 

615,  617,  618 

Wade  v.  Jenkins,  402,  421,  444,  448* 

Wadeson  v.  Richardson,  376* 

Wadmore  v.  Dear,  348 

Wagner  v.  Imbrie,  753 

Wagstaffe,  ex  jmrte,  657 

Waimvright,  ex  ptarte,  756 

i\  Waterman,  433 

Wait,  re,  340,  357,  359,  675,  695 

Wakeham,  re,  737* 

AValburn  v.  Ingilby,  504 

Walker,  ex  jmrte  (3  Deac),  715 

r4  D.  G.  F.  &  J.),     336,  338,  698 

T.  Broadhurst,  418 

V.  Consett,  512 

V.  Harris,  64,  559 

v.  Hirsch,  10,  11,  14,  541,  544,  555 

V.  Jeffreys.  468 

V.  Mottram,  440,  052 

V.  Rooke,  267 

Wallace  i;.  Kelsall,  136,  224,  269,  294 

Waller  «.  Barrett,  594 

V.  Lacy,  227 

Wallis,  ex  parte,  740 

t.  Hirsch,  453 

V.  Smith,  455 

Wallworth  «.  Holt,      462,  463*,  498*, 

499,  500 
Walmsley   ■;;.   Cooper,     145,  2'^5,  237, 

270 
r.  Walmsley,  405,  538 

Walsham  v.  Stainton,  503 

Walstab  r.  Spottiswoode,  24 

Walter  ».  Lavater,  62 

Walton  V.  Butler,  325,  329 

Wanklyn  v.  Wilson,  505 

Want  i.  Reece,  663 


Iviii 


AUTHORITIES    KEFEKRED    TO. 


Ward,  ex  parte, 
V.  ApiJrice, 
v.  Ward, 
Wardc's  case, 
Wardeu  r.  Jones, 


*Pftge 
682 
404 
012 
152,  199,  596 
486 
Warder  v.  Stilwell,   424,  466,   539, 

543 

Waring,  ex  parte,  653,  Y12=^ 

V.  Knight,  670 

Warner  v.  Barber,  639 

V.  Cuuniueham,  575 

V.  Smith,  "^  351,  517 

Warrant  Finance  Go's  case,  228 

Warwick  v.  Slade,  870,  371 

Waterer  v.  Waterer,      331,  332,  333*, 

340* 

Waterfall,  &«  parte,  255,  704* 

Waterlow  v.  Sharp,  132 

Waters  v.  Paynter,  285 

V.  Taylor,  357,  452,  466,  544,  546, 

558,  577,  580 

V.  Towers,  2fi7 

Watkins,  exjx-irte  (Mont.  &  McA.),  734 

(2  M.  &  A.),  680,  083 

(4  D.  &  C),  683 

(8  Ch.),  677 

Watney  i\  Wells,      390,  518,  521,  581 

Watson,    ex  parte    (Buck,    and   4 

Madd.),  728,  741,  742 

(12  Ch.  D.),  639 

(16  Ves.),  40,  75 

(19  Ves.),  31 

(2V.  &B.),  161 

V.  Black,  848 

V.  Charlemont,  86,  482 

V.  Bales,  •  426 

V.  Mid- Wales  Railway  Co.,       296 

V.  Spratley,  848 

V.  Woodman,  263 

Watters  v.  Smith,  224,  225 

Watts  V.  Brookes,  97,  104,  388 

v..  Christie,  293,  659,  660* 

V.  Rees,  290 

Waugh  V.  Carver,  25,  27*,  31,  35,  36, 

40*,  42,  197 

Way  V.  Bassett,  262*,  510 

Weaver  v.  Prentice,  85 

Webb,  re,  382,  387 

T.  Ledsam,  218 

Webber  v.  Tivill,  ,     259,  288,  509 

Webster,  ex  parte,  703 

V.  Bray,       84,  349,  350,  380,  391, 

477* 
.  v.  Webster,        47,  211,  217,  445* 

005 


*Page- 

Wedderburn  v.  Wedderbiirn,  443,  444, 

489*,  512,  516,  517,  5l9,  533*, 

614%  017 

Wcikersheim's  case,  112,  141 

Weir  V.  Bell,  163- 

Weldon  t\  Dicks.  113 

Welford  v.  Liddel,  508 

Wellcome's  Trade  Mark,  re,  447 

Wells  V.  Masterman,  171 

t\  Wells,  564 

v.  Williams,  73 

Welsh,  ex  parte,  039 

Wenlock   (Baroness)  v.  River  Dee 

Co.  191,  and  see  Addenda 

Werderman    v.     Societe    Gfinerale 

d'Electricite,  436 

West  i\  Baker,  643 

V.  Skip,  340,  352,  353,  382,   518, 
647,  682,  088 
Western  Bank  of  Scotland  v.  Nee- 
dell,  213 
West  of  England  Bank,  re,  102 
West   of  England,    itc.    Bank   v. 

Murch,  341 

West  Riding  Union  Banking  Co., 

ex  parte,  715,  71 7 

Westcott,  ex  parte,  724,  738 

Weston  n.  Barton,  118 

Weymouth  t.  Boyer,  400 

Wharton  r.  ]\[ay,  513 

Whately  r.  Menheim,  90 

Wheatley,  ex  parte,         .  190,  703 

V.  Westminster,  &c.,  Coal  Co., 

453 

Wheeler,  ex  parte,         334,  337*   699* 

V.  Home,  59,  01 

V.  Van  Wart,    122*  400,  461,  571 

Whetham  v.  Davey,  364,  461,  493,  517 

Whincup  V.  Hughes,  65,  66,  67 

Whinuey  i'.  Colonial  Bank,  678 

Whitcomb  v.  Whiting,  200,  201 

White,  ex  parte,  100,  702 

V.  Ansdell,  503 

V.  Barker,  502 

V.  Barton,  505 

V.  Williams,  136 

Whitehead  v.  Barron,  207 

t.  Hughes,  271,  289,  670 

Whitley  v.  Lowe,  508,  511,  554 

Whitmore,  ex  parte,      208*,  249,  254, 

704* 

V.  Empson,  078 

n.  Gilmour,  052 

"0.  Mason,  433,  648* 

Whittaker  v.  Howe,  430.  478,  479,  54 i 


AUTHORITIES   REFERRED   TO. 


lix 


*Pagre 
Whittingstall  v.  Grover,  599 

Whittle  V.  McFarlane,  380 

Whitwell  v.  Arthur,  578 

V.  Perrin,  178,  25-i,  257 

Whitworth,  ex- j)arte^  230 

V.  Davis,  493 

Whyte  V.  Ahrens,  508,  5J4 

Wickham  i\  Wickham,  128,  146,  227, 

235* 

Wieland,  ea;par^e,  634 

Wier  V.  Tucker,  508 

Wightman  v.  Townroe,       28,  593,  604 

Wilbeam,  or  Wilbran,  ex  parte,       636 

Wild  V.  Milue,     55,  555,  550,  557,  558 

Wilde  V.  Keep,  185 

Wiles  «.  Woodward,  563 

Wilkinson,  e^l^ar^e  (18  Sim.),         680 

(22  Ch.  D.),  629 

V.  Frazier,  19,  29* 

V.  Haygarth,  59,  60 

V.  Henderson,   460,  494,  596,  597 

V.  Page,  454 

V.  Torki;i2;to;i,  476 

Wilks  V.  Back,  177 

Willesford  v.  Watson,  458 

Willett  V.  Chambers,  151*,  156  I 

V.  Blandford,  521,  525,  617 

Williams,  re  (36  Ch.  D.),  709 

ex  parte  (Buck),  208,  705 

(3  M.  'D.  &  D.),         721,  727*,  730 

(11  Ves.),  217,    334,  337*, 

352,  583,  587,  588,  087,  698, 

700 

V.  Barton,  61,  5G2,  568 

v.  Beaumont,  278 

i\  Bingley,  542 

i\  Griffiths,  227,  509 

V.  Jones,     81,  100,  102*,  202,  412 

V.  Keats,  89,  214,  210*,  217 

«.  Mudie,  85 

V.  P%e,  467 

V.  Powell,  531,  615 

V.  Prince  of  Wales's  Life  Co.,  504 

i\  Rawlinson,  227    230 

i\  Rowlands,  425,  552,  553*,  555, 

557,  558,  578* 

■?'.  Salmond,  463 

V.  Thomas,  186 

V.  Williams  (2  Swanst.),  437* 

(1  Wils.  Ch.),  478 

(2  Ch.),  81,  85,  331 

Williamson  v.  Barbour,  142,  143,  267, 

513 

V.  Johnson,  185* 

Willis  V.  Bank  of  England,  141 


*Page 

Willis  v.  De  Castro,  237 

V.  Dyson  170,  175,  210 

V.  Jeruegan,  512 

Willison  V.  Patterson,  72,  73 

Willmott  V.  London  Celluloid  Co.,  628 

Willock,  ex  parte,  733 

Wilmer  v.  Currev,  197*.  595 

Wilsford  «.  Wood,  88',  285' 

Wilson,  ex  parte  (7  Ch.),        719,  748 

(2  Deac.  and  3  M.  &  A.),  670 

(4  Deac.  &  Ch.),  678 

(2  Jur.),  716 

(1  M.  D.  &  D.),  645 

(3  ib.),  192,  702 

V.  Bailey,  173 

V.  Barthrop,  181 

v.  Church,  576- 

V.  Cuttmg,  566 

V.  Greenwood,  218,429,  433,  493, 

517,  551,  553,  554,  555*,  556, 

557,  559,  587,  647 

'i\  Hurst,  234 

V.  Johnstone,  66,  68*,  69 

V.  Lewis,  22,  173 

V.  Lloyd,     239,  248,  251,  254,  597 

■v.  Moore,  162,  200,  617 

V.  Northampton,  &c.,  Railway 

Co.,  503 

v.  Stanhope,  463,  499' 

V.  Tumman,  148,  206 

T.  Wliitehead,  14,  144,  179,  203*, 

328 
Winch  v.  Keeley,  289,  652 

Windham  v.  Paterson,  635 

Wiugtield,  ex  parte,  677,  683 

Winter  v.  Innes,     250,  253,  262*,  510, 

596,  597 

Winterbottora,  ex  parte,  626 

Wintle  V.  Crowther,  169,  181 

Wish  «.  Small,  29 

Withington  ».  Herring,  13,  28 

WoK'e  V.  Ilorncastle,  372 

Wood,  re  (7  Ch.),  627,  628 

,  ex  parte  (De  Gex),  691* 

(1  M.  D.  &  D.),  .  637 

(2z6.),  730- 

(4  De  G.  M.  &  G.),  677 

(10  Ch.  p.),  337,  629,  699 

V.  Argyll,  24,  44*,  89,  90 

«.  Braddick,  128,  240 

V.  Dodgson,  741,  752* 

V.  Finch,  50 

v.  Scoles,  402,  403,  421 

V.  Wilson,  454 

«.  Woad,  408,  420,  487,  575. 


]x 


AUTHORITIES    REFERRED   TO. 


*Page 

"Woodbridge  v.  Swann,  672,  674 

"Woodford,  e.r  p<irte,  720 

WoodjTate,  e.i; parte,  680,  686 

Woodhouse  v.  Murray,  628,  629 

'WooiVm,  ex  parte,  161 

"NVoodrotfe,  ex  parte,  740 

"Woodward  v.  Gyles,  455 

"Wooldridge  v.  Norris,  375 

"Wooley  V.  Batte,  378,  566 

V.  Gordon,  601,  612 

V.  Kelly,  200 

"Woolf  V.  City  Steam  Boat  Co.,         265 

Worcester  Corn  Exchange  Co.,  re,  132, 

141,  190,  369,  385 

"Worrall  v.  Grayson,  567 

"NYoiihington,  ex  parte,  638 

lYorts  V.  Pern,  85,  89 

Wragge's  case,  680 

"VYray  ■;;.  Hutchinson,  580 

V.  Milestone,  664 

"U^rexham  v.  Hudleston  577 

Wright,  ex  parte,  645 

T.  Court,  128 

V.  Hunter,  385,  493,  495,  666,  752 

1).  Laing,  227 

«.  Pulham,  215 

V.  Eussell,  118 

V.  Snowe,  75 

V.  Tuckett,  621 

«.  Warren,  620 


Wrightson  v.  Pullan, 
Wych  V.  East  India  Co., 
Wyld  V.  Hopkins, 
Wylie,  ex  parte, 
AV^ynget  v.  Heathcote, 


*Page 

216,  222 

259 

24,  44 

732 

65,  56 


Yallop,  ex  parte,  324 

Yates  «.  Finn,  411,  522,  527*,  628, 

616 
Yeatman  v.  Yeatman,  613 

Yonge,  ex  j)arte,  734 

Yonge  Klassina,  the,  73 

York  and  North  Midland  Railway 

Co.  V.  Hudson,  384 

Yorkshire  Banking  Co.  v.  Beatson, 

182* 
Y'oung,  ex  parte  (2  V.  &  B.),       54,  61 


(19  Ch.  D.), 

(2  Rose), 

V.  Axtell, 

1).  Bank  of  Bengal, 

V.  English, 

v.  GDodson, 

V.  Hunter, 

V.  Keighley, 

V.  Waud, 

V.  White, 


300,  624 

741 

89 

656*,  661 

227,  228 

272 

206,  206*,  285 

359 

627,  630 

136 


ZwiLCHEMBART,  ex  parte,  631 

V.  Harrison  (4  Madd.),  508 


STATUTES    REFERRED    TO. 


[Reference  is  to  Star  (*)  paging.] 


*Page 

13  Eliz,  c.  5,  631 
21  Jac.  1,  c.  16 

(Stat.  Lim.),  258 
§  3,      258,  259,  262,  508 

'  7,  258 
29  Car.  2,  c.  3 

(Stat,  of  Frauds) 

§  4,  80,  81,  348 

17,  348 
4  «&  5  Ann.  c.  16 

(Stat.  Lim.),  258 

§  17,  258 

19,  258 

27,  58,  59 

6  Geo.  1,  c.  18,  97 

§  18,  101 

2  Geo.  2,  c.  22,  290 

8  Geo.  2,  c.  13, 

§  1,  113 

8  Geo.  2,  c.  24,  290 

9  Geo.  2,  c.  36,  348 

10  Geo.  2,  c.  28,  .  101 
25  Geo.  2,  c.  36,  101 

28  Geo.  2,  c.  19,  101 

29  Geo.  2,  c.  16  (Irish),  108 
28  Geo.  3.  c.  30,  101 
39  &  40  Geo.  3,  c.  28 

§  15,  96 

39  &  40  Geo.  3  c.  98,  99 
55  Geo.  3,  c.  194 

(Medical  act) 

§  14,  98,  99 

4  Geo.  4,  c.  94 

§§  132,  133,  95 

5  Geo.  4,  c.  114 

§1,  97 

6  Geo.  4,  c.  16 

§  62,  731 
6  Geo.  4,  c.  42, 

§  10,  96 


6  Geo.  4,  c,  81 

§r, 

6  Geo.  4,  c.  94, 

6  Geo.  4,  c.  133, 

7  Geo.  4,  c.  46,    70,  96,  457, 
9  Geo.  4,  c.  14 

(Ld.  Tenterden's  act), 

§1, 
6, 

9  Geo.  4,  c.  23, 
9  Geo.  4,  c.  83, 
11  Geo.  4&  1  Wm.  4,  c.  68 
§§  5,  6, 
3  &  4  Wm.  4,  c.  27 
(Stat.  Lim.), 
§16, 
28, 
40, 
41, 
42, 
3  &  4  Wm.  4,  c.  42 
(Stat.  Lim.), 
§2, 
3, 
4, 
8, 
3  &  4  Wm.  4,  c.  83, 

3  &  4  Wm.  4,  c.  98, 
5  &  6  Wm.  4,  c.  76 

§102, 
1  &  2  Vict.  c.  106 

§§  29,  31, 

4  Vict.  c.  14, 

5  &  6  Vict.  c.  39, 

5  &  6  Vict.  c.  45, 

6  «&  7  Vict.  c.  46, 
6  &  7  Vict.  c.  68, 
6  &  7  Vict.  c.  73 

§2, 


♦Page 

95 

140 
99 

586,  739 

509 
261,  262 
138,  165 

262 
96 

140 

282 

258 
258 
258 
258 
258 
258 

258,  719 

595 

258,  262 

258 

280 

96 

96 

100 

71,  74 
71 
140 
112 
101 
101 

100 


Ixii 


STATUTES    REFERRED   TO. 


*Page 

♦Page 

6  &  7  Vict.  c.  73, 

30  Vict.  c.  23 

§26, 

100 

§T, 

80,  97 

32, 

100 

31  &  32  Vict.  c.  40, 

55,  56,  59 

7  &  8  Vict.  c.  32, 

96 

31  &  32  Vict.  c.  116, 

456 

§8, 

95 

31  &  32  Vict.  c.  121, 

98 

9, 

95 

32  &  33  Vict.  c.  71, 

21, 

95 

§39, 

657 

23, 

95 

§81, 

657 

29, 

95 

33  Vict.  0.  14, 

72 

7&8  Vict.  c.  110, 

50,  93 

33  &  34  Vict.  c.  23, 

71,  340 

7&8  Vict.  c.  Ill, 

665 

33  &  34  Vict.  c.  35, 

621 

15  &  16  Vict.  c.  86, 

35  &  36  Vict.  c.  93 

^  54, 

537 

(Jud.  act,  1873) 

16  &  17  Vict.  c.  70, 

§  24,    259,  293,  375,  376 

§  123, 

579,  680 

§25, 

375,  376 

16  &  17  Vict.  c.  113, 

cl.       6 

,    285,  29-3,  653 

§20, 

262 

cl.  8, 

59,  62,  639,  546 

24, 

262 

cl.  11, 

293 

27, 

262 

§34, 

491 

17  &  18  Vict.  c.  104, 

§§  56,  57, 

538 

§18, 

325 

37  &  38  Vict.  c.  57, 

258 

37. 

324 

§  3, 

258 

43, 

324 

37  &  38  Vict.  c.  68, 

17  &  18  Vict.  c.  125, 

§2, 

258 

§11, 

452,  515 

37  &  38  Vict.  c.  68, 

61, 

299 

§  12 

100 

19  &  20  Vict.  c.  47 

37  &  38  Vict.  c.  96, 

95 

?  90, 

740 

38  &  39  Vict.  c.  77 

19  &  20  Vict.  c.  97 

(Jud.  act,  1875), 

(Mercautile  Law  Amend. 

§  10,             599,602,  603,  and 

act,) 

258 

Add.  to  p.  628 

§4, 

117, 

118,  119 

cl.  2, 

260 

9,       258, 

259, 

509,  510 

cl.  11, 

259 

10, 

255 

Rules  of  the  Supreme 

Court,  1883, 

11, 

255 

Order  VII. 

12, 

255 

r.  3, 

265 

13, 

262 

Order  IX. 

14, 

262, 

263,  597 

r.   6, 

266 

20  &  21  Vict.  c.  85, 

Order  XII. 

§§  9,  21,  2J 

),  26 

77 

r.  15, 

266,  299 

21  &  22  Vict.  c.  90 

Order  XVI., 

264,  274 

§§  32  &  40, 

98 

r.  1, 

266,  274,  280, 

21  &  22  Vict.  c.  108 

282,  288,  293, 

?  6  &  10, 

77 

647 

23  &  24  Vict.  c.  127 

r.  4, 

265,  280,  282, 

§26, 

100 

288,  293,  503, 

25  &  26  Vict.  c.  63 

604,  647 

§3, 

324 

r.  6, 

265,  280,  282, 

25  &  26  Vict.  c.  89 

288,  293,  647 

(The  Companies  act,  1862),  50  | 

r.  7, 

501,  592 

§2, 

70 

r.  8, 

2n8 

4, 

2 

,  70,  101 

r.  9, 

462 

48, 

282 

r.   11, 

265,  273,  274, 

28  &  29  Vict.  c.  86 

275,  278,  2i)i3 

(Boviirsact)13, 

19,  33,  34,  35.  | 

r.  14, 

265,  266 

et  aeq. 

84, 

100,  201  1 

r.  15, 

265 

STATUTES    KEFERRED   TO. 


Ixiii 


*Page 
Hules  of  the  Supreme  Court,  1883, 
Order  XVI. 

r.   16,  604 

rr.  48,  et  seq.,       265, 

285,  612 

Order  XVIII. ,  612 

r.   1,  501,    604, 

647 

r.  3,  647 

r.   6,      265,  278,  604, 

647 

r.  7,  265 

Order  XIX. 

r.  3,  290,  550 

r.  27,  501 

Order  XXI. 

r.   20,  264 

Order  XXXI. 

r.  6,  507 

r.  7,  613 

Order  XXXIII. 

r.  2,  538 

r.  3,  537 

r.  8,  519 

Order  XXXVI. 

r.  8,  508 

Order  XL. 

r.   10,  538 

Order  XLII. 

r.   10,    266,  299,  300, 
626 
Order  L. 

r.   6,  550 

Order  LV. 

rr.  3-9,  462 

r.   19,  538 

Supreme  Court  Funds  Rules,  1886, 

r.  68,  135,  272 

:39  Vict.  c.  6, 

§  2,  98 

39  &  40  Vict.  c.  45,  51 

40  &  41  Vict.  c.  39,  140 
42  &43  Vict.  0.  n, 

(Bankers'  Books  Evidence 
act),  537 

44  &  45  Vict.  0.  41, 

(Convey,  act,  1881) 

§  37,  614,  618 

44  &  45  Vict.  c.  60, 

j;  8,  99 

45  &  46  Vict.  c.  61 

(Bills  of  E.xchange  act, 
1882), 

§  7,  cl.  2,  180 

23,  131 

cl.  2,       129,  180,  181 


45  &  46  Vict.  c.  75 

(Married  Women's  Prop, 
act,  1882), 

§§  1,  3,  12,  19,  78,  624 

§  3,  730 

46  &  47  Vict.  c.  49, 

§  3,  537 
46  &  47  Vict.  c.  52, 

(Bank,  act,  1883),    622,  et  seq. 

§  2,  622 

'  4,'  624,  625 

cl.  1  (a),  630,  632 

(&),  627 

(c),  628 

(e),  665 

5,  625 

6, 

cl.  1  (a),  634 

(c),  631 

(d),  624 

cl.  2,  634 

9,  650,  718, 

10, 

cl.  2,     290,  709,  718, 
754 

18,  754 

cl.  8,  756 

cl.  11,  755 

cl.  12,  756 

cl.  13,  755 

cl.  15,  756 

20, 

cl.  1,  646,  650 

23,  754,  755,  756 

cl.  3,  755 

27,  670 

28,  751 
cl.  2,  751 
cl.  5,  752 

29,  654 

30,  752 
cl.  1,  751 
cl.  4,  224,  752 

31,  751 

32,  624 
35,  643 

cl.  2,  643 

37,  V07 

38,  654,  655 

39,  714 

40,  V09 
cl.  3,     693,  729,  730, 

731 

cl.  6,  720,  730 

41,  709 

42,  709 


Ixiv 


STATUTES  REFEREED  TO. 


*Pagc 
46  &  47  Vict.  c.  52, 

43,  631,  650,  664,  681 

44,  646,  650,  651,  652 
cl.  1,  683 

cl.  3,  625,  677,  678, 
681 

45,  654,  664.  674 

46,  654,  675 
cl.  3,      626,  665 

47,  654,  664 
cl.  1,  654 
cl.  2,  654 
cl.  3,  654 

48,  628,  653,  654,  664, 

49,  630,  631,  654,  664, 

668 
60, 

cl.  3,        652 
cl.  4,         651 

54,  646,  650,  651,  652, 

677 

55,  651,  652 
56, 

cl.  1,  652 

cl.  5,  651 

59,     693,  729,  730 

cl.  1,  731 

64,  753 

88,  117,  624 

93,  649,  669 

102,  649,  669 

cl.  2,  754 

cl.  4,  754 

106,  643 

108,  638 

109,  643 

110,  637 

112,  644 

113,  289,  647,  670 

114,  289.  290,  670,  718 

115,  '     623,  634 
116, 

cl.  2,  117,  624 

123,  623 

148,  624,  645,  707 

152,  624 

168,  633,  650,  661,  652, 

678 

169,  622 
Schedule  I. 

r.  13,  645 

r.  26,  117,  624 
Schedule  II. 

rr.  9-17,  714 

rr.  13,  14,  714 


♦Page* 

46  &  47  Vict.  0.  52, 
Schedule  11. 

r.  15,  714 

r.  18,  748 

r.  20,  719,  730 

r.  21,  708 

Bankruptcy  Rules,  1886, 

r.  56,  117,  624 

r.  69,  670 

r.  70,  670 

r.  113,  117 

.  r.  114,  117 

r.  127,  694 

r.  128,  694 

rr.  149-151,  634 

rr.  195-216,  754 

r.  208,  755- 

r.  211,  755 

rr.  21-1213,         755 
r.  215,  756 

r.  216,  755 

rr.  235-238,         751 
r.  235,  752 

r.  245,  625 

r.  258,  623,  633,  645. 
r.  259,  623,  624 

r.  260,  623 

r.  261,  fi23 

r.  262,  623. 

r.  263,  623 

r.  264,  623 

r.  265,  637' 

r.  266,  754,  755 

r.  267,  754,  755 

r.  268,  637,  645,  646- 
r.  269,  637,  638,  693, 
701,  729,  730 
r.  270,  694 

r.  271,  624 

r.  293,  692,  603 

r.  349,  652 

r.  353,  622,  643 

Appendix,   Forms  6,  626 

46  &  47  Vict.  c.  57, 

(Trade  Marks  act,  1883),  114 

§  64,  114,  447 

65,  114 

70,  114,  447 

72.  115- 


75, 
47  Vict.  c.  3, 
50  &  51  Vict.  c.  57, 

§5, 
50  &  51  Vict.  c.  58, 

§40, 
50  &  51  Vict.  c.  66, 


114 

97; 

756- 
756. 

117- 
754-. 


AMERICAN  AUTHORITIES  CITED. 


[Reference  is  to  bottom  paging.] 


Page 

Abat  V.  Penny,  482 

Abbe,  ex  parte,  1199 

Abbot  V.  Johnson,  697 

Abbott's  appeal,  563,  565 

Abbott  «.  Pearson,  58,112 

Abernathy  v.  Latimore,  150,  433 

Abrahams  v.  Hunt,  827 

Ackles  V.  Stockle,  272 

Ackroyd's  appeal,  62 

Adams  v.  Carter,  41 

V.  Eatherly  Hardware  Co.,        463 

V.  Fulton,  23,  917,  930 

V.  Kable,  826 

V.  Lairdel,         '  965 

V.  Paige,  1015,  1024 

t\  Ruggles,  179 

V.  Terrell,  1072 

V.  Thornton,  177 

'V.  Ward,  586 

Addison  v.  Burckmeyer,  602 

Adee  v.  Cornell,  105 

V.  Demorest,  193 

Adkius  V.  Arthur,  332 

Adler  v.  Foster,  405 

./Etna  Ins.  Co.  v.  Peck,  397,411 

Aiken  v.  Ogilvie,  659 

Albright  v.  Voorhies,  626 

Alcott  V.  Strong,  114,  172 

Alderson  v.  Temple,  441 

Alexander  v.  Alexander,  927 

V.  Barker,  458 

V.  Coulter,  1001 

V.  Gorman,  1019 

V.  Lewis,  705 

V.  State,  236 

Alfele  V.  Wright,  546 

Alfred  v.  Thompson,  468 

Allan  V.  Centre  Valley  Co.,  574 

Allen  V.  Blanchard,  489,  631 

V.  Butler,  469 

E 


Pa  ere 

Allen  V.  Cary,  266 

V.  Farrington,  195 

V.  Hawley,  814,  861 

V.  Hill,  999 

V.  Mason,  577 

V.  Owens,  114,  172 

r.  Rostain,  120 

V.  Wells,  612 

V.  Withrow,  553 

V.  Woonsocket  Co  ,  98 

Allison  V.  Davidson,  577,  632,  659 

Alsop  V.  Mather,  413,  1012 

Alvord  V.  Smith,  627,  628,  721 

Ambler  t.  Bradlej',  20 

V.  Whipple,  956,  974 

American,  &c.  Co.  v.  Wortcndyke,  362 

American  Bank  v.  Doolittle,  390 

American  Bank  Note  Co.  v  Edson, 

515,  523 

American  Cent.  R.  R.  Co.  v.  Miles,  461 

Ames  V.  Downing,  337,  994 

Amidown  v.  Oswood,  341 

Amstaedt  v.  Blumenfeld,  125 

Anderson  v.  Ackerman,  1003 

V.  Chesney,  610 

V.  Lemon,  524,  525 

V.  Levan,  108 

V.  Norton,  171 

V.  Powell,  138 

V.  Robertson,  933 

v.  Snow,  118 

f.  Tarpley,  359 

V.  Taylor"  644 

V.  Tompkins,    162,  177,  207,  229, 

559 

V.  Wanzer,  171 

V.  Whitlock,  515,  581 

Andrews  v.  Brown,  229,  566,  583,  586, 

998 
V.  Ennis,  150,  432 

[Ixv] 


Ixvi 


AMERICAN    AUTHORITIES    CITED. 


Pa?e 

Andrews?).  Keith,  506,  609 

D.  Mann,  604 

V.  Planters'  Bank,  211 

Angles.  Mississippi,  &c.  R.  R.  Co.,  222, 

994 

Anthony  v.  Butler,  202,  206 

V.  Wheaton?,  263,  510 

Antrey  B.  Frioze,  69,  114 

Appleton  r.  Smith,  42 

Arden  v.  Sharpe,  268,  270 

Armand  «.  Long,  28 

Armstrong  v.  Crocker,  841 

V.  Fahnestock,  53 

v.  Robinson,  175,  176 

Arnold  i\  Arnold,  776,  936 

V.  Brown,      227,    389,    618,    966, 

976 

V.  Camp,  300 

V.  Danziger,  700 

V.  Hamer,  1015 

V.  Maynard,  1061 

V.  Stevenson,  229,  559 

V.  Wainwright,  566 

Arquimbo  v.  Hillier,  63,  83 

Artisans'  Bank  v.  Treadwell,  472 

Ash  V.  Guie,  67,  78 

Asker  v.  Odenheimer,  691 

Aspinwall  v.  Williams,  33,  301 

Astley  V.  Weldon,  762 

Athens  Bank  v.  Green,  400 

Atherton  v.  Tilton,  19 

Atkins  i\  Hunt,  327 

v.  Layton,  614 

Atkinson  v.  Rogers,  821 

Atlantic  State  Bank  v.  Savery,  258,  261 

Atlas  Nat.  Bank  v.  Savery,  259 

Atwater  v.  Colton,  467 

Atwood  V.  Gillett,  968 

«.  Lockhard,  332,  480 

V.  Meredith,  610 

Auburn,  &c.  Bank  v.  Fitch,  572 

Auld  V.  Butcher,  857 

Aultmau  v.  Fuller,  14 

Aultman  v.  Webber,  218 

Austin  V.  Cummings,  760 

V.  Holland,         866,  367,  369,  391 

V.  Vandermark,  182 

1}.  Yaughan,  944 

V.  Walsh,  461,  479 

V.  Williams,  33 

Auten  V.  Ellingerood,  747 

Averill  v.  Loucks,  610,  651 

V.  Lyman,  396 

Avery  v.  Lanoe,  32 

V.  Rowell,  212 


Page 

Ayrault  v.  Chamberlain, 

383 

Azel  V.  Betz, 

943 

Babcock,  ex  parte, 

1175 

«.  Stewart, 

332 

736 

Bach  V.  State  Ins.  Co., 

358 

Backus  «.  Taylor, 

369 

Bacon  v.  Cannon, 

73 

V.  Hutchings, 

S48 

Badcock  r.  Stone, 

265 

Bagcly  V.  Bellas, 

282 

480 

Bagley  v.  Smith, 

917 

Bailey  v.  Clark, 

64 

Baily  v.  Browafield, 

192 

826 

Baird  v.  Baird, 

520 

843 

V.  Cochran, 

265 

Bake  ';.  Smiley, 

1012 

Baker's  Appeal, 

625 

Baker  v.  Nappier, 

224 

«.  Stackpoole, 

380 

V.  Wimpee, 

1019 

Baldwin  v.  Richardson, 

206 

V.  Rosseau, 

1061 

V.  Tynes, 

177 

Baldy  «.  Brackenridge, 

2 

,  476 

Ballard,  ex  parte. 

1058 

Balliett  t.  Fink, 

309 

Ballin  v.  Ferst, 

1073 

Balman  v.  Shore, 

705 

Baltzell  «.  Trump, 

713 

Banchor  x>.  Cilley, 

105 

Bancker  ®.  Harrington, 

325 

Bank  v.  Carrolton  Railroad, 

624 

«.  Donaldson, 

881 

f.  Towle, 

625 

Bank  of  Alexadria  «.  Mandeville, 

165 

Bank  of  Commerce  v.  Selden, 

266 

Bank  of  Commonwealth  v.  M 

udgell. 

366 

,  368 

Bank  of  Kentucky  v.  Brookir 

S' 

181 

V.  Herndon, 

571 

,  602 

Bank  of  Louisville  v.  Hall, 

610 

Bank  of  Mobile  v.  Anderson, 

994 

Bank  of  N.  Y.  t.  Yanderhorst, 

147 

Bank  of  Port  Gibson  v.  Paugh, 

355, 

999 

Bank  of  Rochester  «.  Monteath, 

146, 

210,  296 

Bank  of  St.  Albans  v.  Gilliland,      182 
Bank   of  S.    C.    v.    Humphreys,  255, 

356 
Bank  of  Yergennes  v.  Cameron,  62 
Bank  of  Wilmington  v.  Almond,  891 
Bankhead  v.  AUoway,  223 

Banks  x.  Mitchell,  946 


AMERICAN    AUTHORITIES    CITED. 


Ixvii 


Page 

Page 

Barber  v.  Mann, 

280 

Beardsley  v.  Tuttle, 

216 

V.  Smith, 

432 

Beaston  v.  Harris, 

225 

Barclay's  Appeal, 

1036 

Beatty  v.  Ambs, 

310 

Barcroft  v.  Ilaworth, 

120 

V.  Wray, 

648 

V.  Snodgrass, 

222, 

1023 

Beauregard  v.  Case, 

16,  497 

Barfield  v.  Longborough, 

665 

Beaver  v.  Lewis, 

646 

Baring  v.  Crafts, 

285 

Beck  V.  Martin, 

171 

V.  Lyman,                     171 

,  664 

,  932 

Becker  v:  Boon, 

176,  354 

Barker  v.  Blake, 

199 

Beckham  v.  Peay, 

196,  199,  355 

BarloAV  v.  Coggan, 

1009 

Beckley  v.  Munson, 

625 

V.  Reno, 

445 

Beckwith  v.  Talbot, 

14 

t\  Wiley, 

469 

Bedford  v.  Deakin,, 

403 

Barnard  v.  Lapeer, 

220 

Beebe  v.  Rogers, 

296 

Barnes  v.  Elmbinger, 

455 

Beecham  i\  Todd, 

103 

Barnet  v.  Watson, 

471 

Beecher  v.  Bush, 

2,  23 

Barnett  v.  State, 

233 

Beeves  i\  Ayers, 

574 

Barney  v.  Currier, 

218 

Belcher  v.  Conner, 

81,  138 

Barnstead  v.  Empire  Mining 

Co, 

814 

Bell  V.  Crosby, 

453 

Barrett,  ex  parte, 

1081 

V.  Donohoe, 

779 

Barrett,  re, 

209 

V.  Faber, 

167 

V.  Russell, 

280 

®.  Hare, 

20 

V.  Swann, 

179 

V.  Hudson, 

785 

Barringer  v.  Sneed, 

355 

V.  Locke, 

746 

Barry  v.  Barry,                  171 

,  881 

,  941 

V.  Massey, 

318 

V.  Briggs, 

586 

V.  Morrison, 

354 

v.  Foyles, 

308 

v.  Newman, 

338 

Bart's  Appeal, 

515 

Bellis,  ex  farte. 

1202 

Bartles  v.  His  Creditors, 

397 

Bellows,  ex  parte. 

1200 

Bartlett  v.  Parks, 

821 

Belt  V.  Mehen, 

850 

Barton  «.  AVilliams, 

185 

Belton  «.  Fisher, 

490 

Bascom  v.  Young, 

179 

Bemis  'c.  Becker, 

226 

Bass  V.  Estill, 

1015 

Benedict  v.  Davis, 

55,  56 

V.  Taylor, 

358 

,  618 

«.  Hettrick, 

20 

Basset  v.  Miller, 

586 

■y.  Thompson, 

188 

Bassett «.  Shepardson, 

337 

Benjamin  v.  Covert, 

106,  344 

Bataille  v.  Bataille, 

927 

Bennet,  exfarte. 

733 

Bates  V.  Ualliday, 

200 

Bennett,  re^ 

1070 

Battle  V.  Street, 

241 

v.  Buchan, 

360 

Baxter,  re, 

1195 

V.  Cadwell, 

757 

V.  Clark, 

222 

,  285 

V.  Marshall, 

358,  445 

v.  Rodman, 

20 

V.  Russell, 

644 

Bays  V.  Con  over, 

258 

».  Scott, 

461 

Beacaunon  v.  Liebe, 

946 

V.  Snyder, 

621 

Beacb  «.  Haysvard, 

487. 

1004 

V.  Stickne}', 

443,  444 

v.  Hotchkiss,      '       918 

,  929 

,  942 

V.  Woolfolk, 

818 

V.  Ollendorf, 

209 

Benniger  v.  Gall, 

818 

V.  State  Bank, 

296 

Benninger  v.  Hess, 

261 

V.  Vandewater, 

109 

Benson  ?\  Ela, 

1017 

Beacham  v.   Eckford,    666, 

669, 

6P1, 

V.  Kincaid, 

390 

693 

r.  McBee, 

29,  CO 

Beal  V.  Snedicor, 

448 

Bentley  v.  Harris, 

820 

Bcall  V.  Poole, 

109 

V.  Smith, 

150,  432 

Beaman  i\  Whitney, 

223 

Benton  «.  Chamberlain, 

3-12 

Beau  V.  Gregg, 

929 

V.  Roberts, 

102,  188 

Beurdsley,  ex  parte, 

1088 

Bentrin  v.  Zicrllen, 

206 

Ixviii 


AMERICAN    AUTHORITIES    CITED. 


Pa^e 

Berkshire  "Woolen  Co.  v.  Juillard, 

146,  2S2 

Bernard  v.  Parvin,  l^l,  453 

V.  Torance,        107,  341,  340.  399, 

405 

V.  Wilcox,  480 

Bernie  v.  Vandever,  854 

Bernstein  ex  parte,  '        1200 

Berry  v.  Folkes,  229 

r.  Jones,  648 

V.  Kelly,  580 

V.  McLean,  756 

V.  Powell,  497,  859 

Berryhill  v.  McKee,  181,  355 

Berthokl  v.  Goldsmith,  44 

Beste  V.  Creditors,  229 

Bethel  r.  Franklin,  924 

Bethell  )■.  Wilson,  "             819 

Betts  V.  June,  1000 

Be  van  v.  Allee,  1015 

Bevans  v.  Sullivan,  644,  805 

Bewley  v.  Tarns,  283 

Biddle  v.  Moore,  605 

Bieman  v.  Braches,  928 

Bigelow,  ex  parte,  1176 

r.  Elliott,  28,  40 

Billings  V.  Meigs,  276 

Billingslea  v.  Ware,  850 

Billingsley  v.  Dawson,  148 

Bininger  v.  Clark,  744,  746,  747 

Binney  v.  Legal,  446 

V.  Yoimg,  319 

Birchett  v.  Boiling,  796 

Bird  V.  Hamilton,  694 

V.  Lanius,  2T6 

V   Morrison,  561,  563 

Birddall  v.  Colie,  902 

Birdsall  v.  Bemiss,  237 

Birks  V.  French,  227 

Bischoffsheim  v.  Baltzer,  998 

Bisel  r.  Ilobbs,  118,  222,  285 

Bishop  V.  Austin  476 

v.  Breckles,  157,  958,  962 

V.  Georgeson,  107 

T.  Hall.  114,  462 

Bispliam  v.  Patterson,  355 

Bissell  V.  Ames,  819 

V.  Carville,  446 

V.  Harrington,  102 

Bitzer  v.  Shunk,  446 

Bjornstad,  re,  1204 

Blachlev  v.  Coles,  522 

Black's  ^appeal,  562,  1015 

Black  r.  Black,  566 

V.  Bush,  275,  571,  1024 


Page 

Black  1).  Seipt,  561,  568 

T.  Struthers,  488 
Blackburn  v.  McCallister,        203,  206 

Black  well  v.  Dibrell,  532 

T.  Rankin,  1017 

V.  Beid,  432 

Blair  «.  Johnston,  189,661 

V.  Snover,  401 

Blake  v.  Dorgan,  815,  974 

V.  Sweeting,  336 

Blaker  v.  Sands,  228 

Blanchard  v.  Coolidge,  19 

Blin  V.  Pierce,  459,  473 

Blinn  v.  Evans,  191 

Bliss  V.  Swartz,  321 

Bloch  r.  Price,  365 

Blodgett  V.  xVmerican  Bank,  1040 

V.  Weed,  179,  261 

Blue  V.  Leathers,  29 

Blumenthal,  re,  35 

Boardman  r.  Close,  644,  693 

T.  Gore,      101,  179,  180,  234,  243 

Bodenham  v.  Purchas,  382 

Bodwell  r.  Eastman,  229 

Bogereau  v.  Gucringer,  318,  357 

Bohrer  v.  Drake,  14 
Boisgerard  v.  Wall,              7,  436,  715 

Boling  V.  Anderson,  218 

Bolton,  ex  parte,  1157 

Bonbonus,  ex  parte,  270 
Bond  V.  Aitkin,                 205,  206,  207 

V.  Hays,  937 

V.  Nave,  117,  171,  1015 

T.  Pittard,  4 

Bonis  V.  Louvnier,  660 

Bonnaffee  v.  Fenner,  108 

Bonne  v.  Kay,  490 

Bonnell  v.  Chamberlain,  113 

Bonner  v.  Campbell,  103 

Bonney  v.  Stuughton,  918 

Book,  ex  parte,  1200 

Bookout  V.  Anderson,  909 

Boolt).  Caldwell,  111 

Boone  v.  Sirrine,  372,  990 

Booth  V.  Farmers*,  &c.  Bank,  652 

Boothroyd,  re,  1204 

Boro  V.  Harris.  1026 

Bosanquet,  ex  parte,  207 
Boston   &    Colorado  Smelting  Co. 

V.  Smith,  25 

Boswell  V.  Dunning,  453 

V.  Green,  162 

Bourne  v.  Freeth,  327 

V.  Woodbridge,  269 

Bowen  v.  Crow,  46& 


AMERICAN    AUTHORITIES    CITED. 


Ixix 


PilgO 

Bowen  d.  Sutlierlin, 

448 

Bower  v.  Douglass, 

356 

Bowker  v.  Bradford, 

97 

Bowler  v.  Huston, 

444, 

449 

Bowling  V.  Dobyns, 

608 

Bowman  v.  Bailey, 

29 

V.  Cecil  Bank, 

181 

V.  Floyd,                    124, 

748, 

1035 

V.  O'Reilly, 

850 

V.  Spalding, 

397 

Bowns  V.  Pioneer  Tow  Line, 

42 

Bowyer  v.  Knapp, 

405 

Boyce  v.  Brady, 

23 

V.  Burchard, 

904 

V.  Coster, 

680 

V.  Watson, 

171 

449 

Boyd  V.  Brown, 

927 

ti.  Emerson, 

176 

V.  Foot, 

839 

V.  McCann, 

853, 

370 

V.  Mynatt, 

838 

V.  Plumb, 

211 

v.  Webster, 

382 

Boyers  v.  Elliott,               108 

541 

503 

Boylan,  ex  jxtrte, 

1202 

Boyle  V.  Hardy, 

851 

Bracken  v.  Kennedy,        810 

942 

943 

V.  JNIarch, 

221 

Bradbury  v.  Barnes, 

520 

624 

Bradford  v.  Kimberly, 

644 

Bradle}^  v.  Camp, 

341 

V.  Chamberlin, 

705 

V.  Linn, 

179 

V.  AVhite, 

19 

Bradner  v.  Strang, 

254 

Bradshaw  v.  Apperson, 

28 

Brady  i\  Hill, 

355 

Braithwaite  v.  Britain, 

404 

Braley  v.  Goddard, 

48 

Brandon  v.  Robinson, 

738 

Brasfield  v.  French, 

415 

Brazee  v.  Poyntz. 

208 

,  418 

Breckenridge  v.  Shrieve,  188 

Bredow  v.  Mut.  Savings  Institution, 

354 

Breen  r.  Richardson,  209 

Breneman,  ex  parte,  1061 

Brent  v.  Davis*  264 

Brewer  v.  Worthington,  759 

Brewster  v.  Ilamett,  609 

V.  Hardeman,  162,  355 

V.  iMott,  272,  848 

Brickhouso  r.  Hunter,  686,  833 

Bridge  v.  Gray,  173 

i\  McCullough,  1015 


Bridge  v.  Swain, 
Brien  v.  Herriman, 
Briggs  V.  Smith, 
Brigham  v.  Clark, 

V.  Dana, 
Bright  V.  Sampson, 


Page 
585 
964 
230 

21 

14,  15,  651 

448 


Brink  v.  New  Amsterdam  Fire  Ins. 

Co.,  32,  100,  175 

Brinley  v.  Kupfer,  856 

Brisban  v.  Boyd,  348 

Bristol  V.  Sprague,  347 

Bris waiter  v.  Long,  1074 

Broaddus  v.  Evans,  229,  1025 

Brock  V.  Bateman,  .    1018 

Brockenbrough  v.  Hackley,  426 

Brock  way  v.  Burnap,  19 

Broda  v.  Greenwald,  850 

Brooke  v.  Evans,  304 

V.  Washington,  286,  506 

Brooks  «.  Martin,  138,  511 

Brown's  appeal,  647,  670 

Brown,  ex  parte,  1200 

Brown,  Matter  of,  905 

V.  Agnew,  939 

V.  Birdsall,  472 

'c.  Broach,  ,848 

«.  Chancellor,  361 

V.  Clark,  844 

V.  Crandall,  106 

V.  Fitch,  285 

V.  Haven,  436 

«.  Haynes,  265,  715 

v.  Higginbotham,  41,  354,  986 

■y.  Jewett,  97 

V.  Lang,  1013 

V.  Lawrence,  200 

«.  Litton,  671 

V.  Marsh,  890 

V.  McFarland,  ,  648 

V.  Rains,  116 

®.  Schackleford,  675 

Brown  son  v.  Metcalfe,  151,  434 

Bruen  v.  Marquand,  209 

Brush  V.  Mandrell,  920 

Bry  V.  Cook,  884 

Bryan  r.  Tooke,  255 

Bryany  v.  Hawkins,  373 

Bryce  v.  Jovnt,  112 

Bryden-y.  Taylor,  110 

Bryor  v.  Weston,  108 

Buchan  v.  Sumner,       559,  563,   1016, 

1168 
Buchanan   v.    Cheeseborough,       760, 

956 

V.  Curry,  176 


Ixx 


AMERICAN    AUTHORITIES    CITED. 


Pasjo 

Page 

Buchoz  V.  Grand  jean, 

175 

Burtus  v.  Tisdall, 

572,  988 

Buck  V.  Mosley, 

209 

Burwell  v.    Mandeville, 

337,   838, 

V.  Smith, 

V05 

994 

i\  Winn, 

1022 

v.  Springfield, 

20» 

Buckhasfic,  re, 

1167 

Busby  V.  Chenault, 

652,  1018 

Buckingham  r.  Burgess 

55,  490 

Bush  t\  Cooper, 

1200 

V.  Ilanna, 

621 

V.  Guion, 

691 

V.  Ludlum, 

660,  670,  1017 

V.  Sinthicum, 

94 

Buckley  v.  Buckley, 

566 

Bushfield  v.  Wheeler, 

564 

V.  Carlisle, 

943 

Butcher  v.  Auld, 

881 

Bucklin  v.  Bucklin, 

395 

Butler  V.  Barleson, 

893 

Buckiier  v.  Calcote, 

488 

V.  Finck, 

20,  103 

V.  Lee, 

41 

'0.  Henry, 

68 

V.  Keis, 

693,  931 

T.  Lemley, 

644 

Buffalo   City  Bank   v. 

Howard,   341, 

t\  Stocking, 

211 

304 

Butterfield  v.  Hemsley, 

206 

Buftum  V.  Buffiim, 

2,  108,  563 

Button  V.  Hampson, 

203,  206 

i\  Searer, 

1025 

Buxton  V.  Edwards, 

399,  479 

Bufkin  V.  Boyce, 

900 

f.  Sister, 

703 

Buford  V.  Neeley, 

644,  822 

Bybee  v.  Hawkett, 

73 

Bulfinch  V.  Winchenback,                   06 

Byers  p.  Bourret, 

432 

Bull  V.  Harris, 

185 

Byingtou  v.  Gaff, 

223 

v.  Schubert, 

19 

Byrd  r.  Fox, 

917,  929 

Bullock  V.  Hubbard, 

1026 

Bja-ne,  ex  jxirte, 

1175 

Bull's  Head  Bank  v.  McFeeters,       126 

1).  Schwing, 

436 

Bumpuss  v.  Webb, 

938 

Bum  son  v.  Morgan, 

205 

C.  M.  Ixs.  Co.  V.  Ligon, 

415 

Burbank  v.  Haas, 

55 

Cabaniss  v.  Clark, 

601 

Burcharcl  i\  Boyce, 

774,  832 

Cadwallader  t\  Krolsen, 

201 

Burckle  v.  Eckhart, 

19 

Cady  1).  Sheperd, 

205 

Burdilt  T.  Grau, 

935 

v.  Smith, 

433 

Burgcn  v.  Dwinal, 

468 

Cahoon  v.  Hobart, 

345 

Burgess  t\  Lane, 

53,  112 

Caldwell  v.  Davis, 

806 

Burgwin  v.  Hastier, 

488 

t\  Leiber, 

557,  644 

Burleigh  v.  Partou, 

219,  265 

V.  Scott, 

228,  loir 

Burley  v.  Harris, 

437,  941 

«.  Sithens, 

301 

Burnell  r.  Weld, 

480 

V.  Stileman, 

338,  995,  1011 

Burnett  t\  Snyder, 

44,  63,  64 

Calk  V.  Orear, 

418 

v.  Sullivan, 

450 

Callender  v.  Swett, 

111 

Burney  v.  Boone, 

932 

Calloway  v.  Tate, 

836 

Burnhara  v.  Hopkinson, 

944 

Calvin  v.  Markman, 

437,  946 

T.  Whittier, 

198 

Camblat  t\  Tupery, 

884 

Burnley  «.  Rice, 

188,  285 

Cameron  v.  Blackman, 

224 

Burns  V.  Hall, 

150,  432 

V.  Carrilo, 

1007 

V.  McKenzie, 

355 

V.  Francisco, 

644,  647,  048 

V.  Nottingham, 

929 

T.  Watson, 

688,  708,  883 

Burnside  v.  Savier, 

1000 

Cammack  r.  Johnson, 

1020 

Burpee  r,.  Bvmn, 

506,  1016 

Camp  r.  Eraser, 

415,  1008 

Bun-  v.  De  La  Vergne, 

522 

v.  Page, 

200 

V.  JVIorrison, 

454 

Campbell,  e.v  j)arte, 

1200 

V.  Williams, 

850 

V.  Bowen, 

264,  535 

Burrill  v.  Acker, 

614 

v.  Dent, 

19 

Burt  V.  Lathrop, 

07 

T.  Hastings,     55,  58,  00,  106,  113 

Burton  v.  Ferris, 

287 

V.  Lacock, 

757 

Burton  v.  Goodspeed, 

19 

r.  Matheus, 

375 

AMERICAN    AUTHORITIES    CITED. 


Ixxi 


Page 

Page 

Campbell  v.  Steward, 

657 

Chamberlain  v.  Bancroft 

356 

V.  Traders'  Bank, 

1058 

V.  Chamberlain, 

525,  562,  563 

v.  Whitley, 

115 

V.  Dow, 

350 

Canada  v.  Barksdale, 

15 

V.  Walker, 

927 

Candler  v.  Stange, 

864 

Chamberlin  v.  Prior, 

251 

Canfield  v.  Hard, 

836 

Chambers  v.  Grout, 

105 

Cannon  v.  Copeland, 

776 

Chambus  v.  Clearwater, 

233 

Capeile  v.  Hall, 

2C0 

Champlin  v.  Tilley, 

lis 

Capen  v.  Barrows, 

920 

Chance  r.  Chambers, 

434 

Cargill  v.  Corby, 

280 

Chandler  v.  Sherman, 

166,  859 

Carillon  v.  Thomas, 

610 

Channel  v.  Fassitt, 

621 

Carithcrs  r.  Jarrell, 

509 

Chapin  v.  Clemitson, 

515 

Carlin  v.  Doneiian, 

661 

857 

Chapman  v.  Beach, 

977 

Carlisle  v.  Mulhern, 

559 

V.  Devereux, 

4,  287 

V.  Tenbrook, 

657 

v.  Forsyth, 

1200 

Carlton  v.  Cummings, 

951 

V.  Lipscomb, 

13 

V.  Ludlow  Woolen  Mills 

106 

V.  Wilson, 

4 

Carmicbael  r.  Grier,             5.' 

),  58 

366 

Chardon  v.  Oliphant, 

355 

Carroll  v.  Evans, 

981 

Charles  v.  Estleman, 

171 

Carper  i\  Hawkins, 

354 

857 

Charman  v.  Henshaw, 

120 

Carr  v.  Gale, 

1200 

V.  McLane, 

209 

Carrier  r.  Cameron, 

179 

Chase  v.  Bean, 

268 

Carroll  v.  Gayarre, 

173, 

426 

11.  Deming, 

471 

Carter  v.  Adanison, 

Y58 

940 

V.  Garvin, 

806,  941 

V.  Allen, 

1024 

«.  Kendall, 

354 

V.  Beaman, 

271 

V.  Scott, 

580 

V.  Christie, 

935 

V.  Steel, 

506,  1016 

V.  Currie, 

485 

V.  Vaughan, 

395 

V.  Douglass, 

106 

Chazournes  v.  Edwards, 

268 

v.  Pomeroy, 

219 

Cheeseman  v.  Sturges, 

862 

V.  Whalley, 

365 

Chemung  Bank  r.  Ingrah 

am,           293 

Carthaus  v.  Ferres, 

175 

Cheney,  ex  parte, 

1200 

Casco  Bank  v.  Coles 

351 

Chenowith  v.  Chamberlin 

181 

Case  V.  Beauregard, 

247 

574 

Chester  v.  Dickerson,       102,  103,  123, 

V.  Cushraan, 

399, 

757 

234,  306 

V.  Maxey, 

935 

Chidsey  «.  Porter, 

113 

Casey  v.  Carver, 

200 

Child  V.  WofFord, 

286 

Cash  V.  Tozer, 

446 

Childress  v.  Emory, 

145 

Cassidy  v.  Hall, 

34 

Child s  V.  Hyde, 

488 

i\  Metcalf, 

738 

Chippendale,  ex  parte, 

665 

Castle  V.  Bullard, 

237 

Chisholm  v.  Cowles, 

68 

V.  Reynolds, 

358 

999 

Chittenden   v.    German 

American 

Castly  1).  Towles, 

816 

Bank, 

214 

Caswell  V.  Cooper, 

923 

Chopin  V.  Wilson, 

607,  618 

Casy  «.  Williams, 

922 

Christian  v.  Crocker, 

19 

Catlin  1).  Gilders, 

168 

V.  Ellis,                   209,  1016,  1022 

Catskill  Bank  v.  Messenger, 

391 

Christy  v.  Sherman, 

445 

V.  State, 

182 

Church®.  First  National  Bank,      194 

Causter  v.  Burke, 

944 

V.  Sparrow, 

190,  191 

Cayton  v.  Hardy, 

167 

Cilley  V.  Huse, 

503 

V.  Walker, 

847 

Cirkel  v.  Ellis 

55,  58 

Chadsey  v.  Harrison, 

941 

Citizens'  Bank  «.  Cass, 

1072 

Chaffin  V.  ChafBn, 

409 

Citizens'  Mutual  Ins.  Co. 

V.  Ligoo,  413 

Chaffraix  v.  Laffitte, 

42 

City  Bank  of  Brooklyn  v. 

McChes- 

V.  Price, 

19 

ney, 

367 

Ixxii 


AMERICAN   AUTH0KITIE8    CITED. 


I'age 

City  Bank  of  New  Haven's  Appeal, 

471 

Cladwell  v.  Palmer,  559 

Claflin  V.  Hirsh,  82 

Clagett  V.  Kilbourne,  7,  506,  609 

Clancy  v.  Craine,  102 

Clapp  r.  Rogers,  368 

V.  Upson,  345 

Clark  V.  Billings,  398 

V.  Clark,  926 

V.  Dearborn,  260 

V.  Dibble,  929 

V.  Gilbert,  19 

V.  Gridley,  859 

V.  Holmes,  287 

V.  Houghton,  283 

V.  Howe,  487,  584 

V.  Hyman,  211 

V.  Lyman,  611 

V.  McClelland,  177 

V.  Miller,  459 

«.  Rives,  162 

V.  Stoddard,  175,  448,  450 

V.  Warden,  665 

Clarke's  appeal,  937 

Clarke  v.  Hogeman,  198 

v.  Holmes,  470 

V.  Mills,  938 

Clarkson  v.  Carter,  459 

Clay  V.  Cottrell.  266 

Cleghorn  v.  Johnson,  119 

Clement  v.  Brush,  205,  208 

V.  Clement,                '  345 

Clements  v.  Jessup,  565 

1).  Mitchell,  114,  651,  883, 

992 

Cleveland  v.  Woodward,  459,  473 

Cline  V.  Wilson,  586 

Clough  i\  Iluffmau,  756,  924 

Cobble  V.  Tomlinson,  583 

Cochran  t.  Cunningham,  436 

V.  Perry,  979 

Cochrane  v.  AUen,  930 

V.  Quackenbush,  466 

Cocke  v.  Branch  Bank.  1 

Cockroft  V.  Clafliu,  211 

Coder  «.  Huling,  516 

Codding,  re,  567 

Coddington  v.  Hunt,  342.  368 

T.  Idell,  516,  644,  666 

Cody  V.  Cody,  979 

CofiBn  V.  Jenkins,  20 

V.  McCullough,  604 

Coffing  ;•.  Taylor,  631 

Cogswell  V.  Davis,  349 


Page 

Cogswell  V.  Wilson, 

105 

Colby  V.  Ledden, 

1200 

Cole  V.  Pennell, 

469 

V.  Reynolds, 

849 

Colehour  v.  Coolbaugh, 

863 

Coleman  v.  Coleman, 

940 

V.  Lansing, 

757 

V.  Marble, 

786 

V.  O'Neil, 

251 

Coles  1).  Coles, 

559 

,  566 

Colgin  t\  Cummins, 

67C 

,  672 

Colgrove  v.  Tallman, 

375 

Collamer  v.  Foster, 

945 

Collier,  re, 

1175, 

1178 

V.  Cross, 

112 

,  179 

Collins  v.  Barrett, 

464 

».  Butler,                  506 

,  546, 

1016 

V.  Decker, 

561 

V.  Hood.                1024, 

1065, 

1173 

Collomb  V.  Caldwell, 

1023 

Collum  V.  Read, 

560 

Collyer  v.  Collyer, 

856 

i\  Moulton, 

397 

Combs  V.  Boswell, 

201 

Commercial  Bank  v.  Lewis,       60,  181, 

817 
1).  Warren,  220 

T.  Wilkins,  .     49,  339 

Commonwealth  v.  Bennett,  19 

Como  T.  Port  Henry  Iron  Co.,         366 
Comstock  V.  Buchanan,  519 

v.  White,  722 

Conant  «.  Frary,  625,  1016 

Condrey  v.  Gilliam,  842 

Conery  v.  Hayes,  63,  355 

Couklin  V.  Barton,  107 

V.  Osborn,  356 

Conkling   i\   Washington   Univer- 
sity, 1016,  1168 
Conley  v.  Good,  468 
Connor  v.  Allen  Harr,  999 
Conroy  v.  Woods,                              570 
Consolidated  Bank  v.  State,         24,  82 
Const  v.  Harris,  166 
Converse  v.  McKee,                         1016 
V.  Shambaugh,                            117 
Cony  V.  Wheelock,                         6,  357 
Cook,  ex  parte,                                 1200 
t:  Beech,                             461,  532 
V.  Bloodgood,                              200 
r.  Carson,                                   1001 
V.  Castner,                                     226 
T.  Frederick,                                 120 
v.  Jenkins,                           632,  890 
Cook  r.  Penrhyn,                               113 


AMERICAN   AUTHORITIES   CITED, 


Ixxiii 


Page 

Cooke,  ex  parte, 

733 

V.  Allison, 

192 

V.  Batchellor, 

464 

Cookingham  v.  Lasher, 

287 

,  470 

Cooley  V.  Sears, 

467 

Coonlev  V.  Wood, 

391 

Coons  V.  Renick, 

229 

Coope  V.  Bowles, 

181 

Cooper's  aiipcal. 

1026 

Cooper  V.  Burns, 

62 

V.  Frederick, 

650 

,  859 

V.  McClurkan, 

260 

V.  Merriherr, 

647 

,  648 

i\  Reid, 

647 

,  648 

Coorci's  appeal, 

1026 

Copcutt  V.  Merchant, 

1011 

Cope's  appeal. 

1026 

Corbett,  re^ 

1204 

Corbin  v.  McChesuey, 

200 

Corey  v.  Perry, 

1201 

Coruwell  v.  Sandidge, 

332 

,  602 

Corps  V.  Robinson, 

170 

,  172 

Corwin  v.  Suydam, 

229 

Coster  V.  Tank  of  Georgia, 

505 

507 

«.  Clarke, 

1025 

Cothran  v.  Marmaduke, 

20 

Cottle  V.  Harrold, 

214 

V.  Leitch, 

819 

,  976 

Cotton  V.  Evans, 

265 

Couillard  ?'.  Eaton, 

920 

Course  v.  Prince, 

945 

Coursen's  appeal, 

515 

Coursen  v.  Hamlin, 

644 

Coursey  v.  Baker, 

179 

Cowan  V.  Iowa  State  Ins.  Co., 

581 

Cowell  V.  Sikes, 

404 

Cowles,  exjmrte, 

1058 

V.  Garrett, 

69 

Cox  V.  Bodfish, 

6 

V.  Delano, 

15 

■».  Harris, 

433 

■)}.  Peters, 

902 

V.  Russell,  943,  1024 

Cragiu  v.  Carleton,  112 

Craig  V.  Alvcrson,  173 

V.  Henderson,  498 

V.  Smith,  450 

Cram  v.  Cad  well,  196 

Cramer  v.  Bachmau,  645 
Crandall  v.  Denny,                     150,  432 

Crane  v.  Morrison,  1203 

«    French,  445 

Crary  v.  Williams,  33 

Crawford  v.  AustiD,  10 

Crawford  r.  Baum^  1026 


Crawford  v.  Collins, 
Crawshay  v.  Collins, 

v.  Maule, 
Creel  v.  Bell, 
Cregler  i).  Durham, 
Creswell  «.  Blank, 
Crites  «.  Wilkinson, 
Crocker  v.  Colwell, 
Crockett,  ex  parte, 

V.  Grain, 
Croit,  re, 

Crompton  v.  Conkling, 
Cronkhite  v.  Herrin, 
Crook  V.  Davis, 
Crooker  v.  Crooker, 
Croone  v.  Bireus, 
Cropper  v.  Coburn, 
Crosby  «.  McDermitt, 

V.  Nichols, 


145 

587,  671,  684, 

1002 

159,  337,  958 

443 

345,  952 

489,  1011 

228 

297 

1054 

1016 

1203 

1072 

990 

60 

597,   1016 

604,  605 

506 

922 

190,  565 


Cross  V.  Burlington  Nat.  Bank,        331 

V.  Langley,  117 

Crossley  v.  Taylor,  939 

Crosthwait  v.  Ross,  188 

Crottes  V.  Frigerio,  942,  943 

Croughton  v.  Forrest,  275,  516 

Crow  t\  Green,  917 

V.  Weidner,  1000 
Crowell  V.   Western   Reserve     Bank, 

119 

Crum  V.  Abbott,  331 

Crumless  v.  Sturgess,  173 

Crutwell  V.  DeRossett,  209 

Cuille  V.  Gasseu,  94 

Culberston  v.  Tovvrnsend,  491 

Culley  «.  Edwards,  25 

CuUum  «.  Bloodgood,  162,216 

Cummings  v.  Carsily,  203 

V.  Mills,                       ,  18 

Cunhff  V.  Dyerville,  &c.  Co.,  644,  646 

Cunningham  v.  Bragg,  356 

V.  Gushee,  988 

V.  Littltfield,  815 

V.  Smith,  882 

'V.  Smithson,  296 

V.  Sublette,  226 

Currier  i\  Hale,  933 

•v.  Rowe,.  929 

v.  Silloway,  116 

V.  Webster,  925 

Curry  v.  Fowler,  45 

V.  White,  348 

Curtis  V.  Belknap,  459 

Curtiss  V.  Hoyt,  605,  790 

V.  Woodward,  1201 


Ixxiv 


AMERICAN    AUTHORITIES   CITED. 


Pai^e 

Gushing  v.  Marston, 

461 

V    Smith, 

290 

Cutler  V.  Iloke, 

214 

Cutts  V.  Gordon, 

4G9 

Dait.y  t.  Coons,  55,  58 

Dakin  v.  Graves,  930 
Daltou  City  Co.  v.  Dalton  Manuf.  Co., 

24,  98 

V.  Hawes,  41 

Daly  V.  Ericson,  584 

Dana  v.  Couant,  269 

Daniel  v.  Daniel,  255 

V.  Nelson,  355 

Daniels,  ex  pai'te,  166 

Darling  v.  March,  259,  358 

Darlington  ^•.  Gai-rett,  194 

Davenport  v.  Gear,  941 

V.  Runlett,  266 

David  V.  Ellis,  403 

Davidson  v.  Kelly,  180,  418 

V.  Knox,  450 

V.  Wilson,  884,  885 

Davis,  ex  parte,  1058 

v.  Abbott,  467 

v.  Allen,  345 

V.  Berger,  175 

V.  Blackwell,  168,  211 

V.  Briggs,  860,  512,  933 

V.  Buchanan,  433 

V.  Christian,  337,  566,  994 

V.  Church,  486,  487 

V.  Cook,  179,  223 

V.  Hubbard,  151,  432 

T.  Keyes,  371 

V.  Merrill,  934 

•0.  Richardson,  191,  2.55 

T.  Smith,  258,  566 

V.  Willis,  366 

Davis'  Estate  v.  Desauque,  405 

Davison  ^^  Holden,  7 

Day  t\  Lafierty,  206 

V.  Lockwood,  660 

V.  Perkins,  566 

T.  Stevens,  23 

V.  Wetherly,  409 

Dayton  v.  Wilkes,  738,  821 

Dean  v.  McFaul,  373 

V.  Savage,  468 

Deardorf  v.  Thacher,  188 

DeBeronger  v.  Hammel,  978 

DeBerkon  v.  Smith,  270 

DeCacessey  «.  Bailey,  1018 

Decker  v.  Howell,  15 

Deckert  v.  Filbert,  360 


Deere  v.  Plant, 
Deeter  v.  Sellers, 
Deford  v.  Reynolds, 
DeGreiff  v.  Wilson, 
DeGrott  t.  Darby, 
Deitz  V.  Rcgnier, 
DeJarnette  v.  McQueen, 
DeLeon  v.  Trevins, 
Delmonica  v.  Guillarae, 
Deming  v.  Colt, 
Demoss  v.  Brewster, 
Demott  1).  Swain, 
Denis  v  Saunders, 
Denithoru  v.  Hook, 
Denman  v.  Dosson, 
Denny  v.  Cabot, 
v.  Metcalf, 


Page 

332,  736- 

269 

340,  345 

477 

460 

192 

939 

124 

564 

177,  216,  56^ 

448 

359,  448 

43 

109 

364,  366 

20 

437 


Densmore  Oil  Co.  v.  Densmore,      519, 

520 

Dent  V.  Slough,  247,  823 

Denton  v.  Brown,  94 

V.  Erwin,  855,  882 

Denver  r.  Roane,  647,  648 

Derby  v.  Gage,  911 

V.  Gallup,  227 

Desha  v.  Holland,  459,  471 

V.  Smith,  664,  665 

Dethlefs  v.  Samson,  586 

Deval  V.  Mcintosh,  757 

Devall  V.  Burbridge,  513 

Devaynes  v.  Noble,  474 

Deveau  «.  Fowler,  902 

Devenney  «.  Mahoney,  561,  564 

Devin  v.  Harris,  280 

Devine  v.  Mitchum,  559,  566 

Devoss  i\  Gray,  67 

Dewey  v.  Dewey,  564 

Dewit   V.  Stauiford,  942 

Dexter  v.  Arnold,  665,  672 

De  Zeng  «.  Bailey,  391 

Dial  V.  NeuSer,  97 
Dibblee,  ex  parte,                  1057,  1063 

Dickinson  v.  Bold,  158,  700 
V.  Dickinson,             341,  366,  910 

V.  Granger  932 

V.  Lcgare,  183,  207 

V.  Valpy,  327 

Dickson  v.  Alexander,  222 

Diggs  T.  Brown,  568 

Dillon  t\  Brown,  207 

Dils  V.  Bridge,  13 

Dilworth  V.  Mayfield,  568,  776 
Dimond  v.  Henderson,      670,  672,  691 

Dinham  v.  Bradford,  066 

D'Invilliers'  Estate,  lOia 


AMERICAN     AUTHORITIES    CITED. 


Ixxv 


Piio;e 

Dishou  V.  Schorr, 

222 

Ditts  i'.  Lonsdale, 

179 

Dix  V.  Otis, 

17,  108,  832 

Dixon  V.  Barclay, 

173 

V.  Hood, 

108 

Doak  V.  Swan, 

70 

Doau  V.  Compton, 

1058 

Doane  v.  Adams, 

651,  675 

Dob  V.  Ilalsey,        259, 

266,  267,  269, 

274,  436 

Dodd  r.  Bishop, 

418 

t.  Dreyfus, 

411 

Dodge  v.  M'Kay, 

206 

Dodson  V.  Chambers, 

111 

Doe  V.  Tupper, 

206,  209 

Doggett  ■v.  Dill, 

1019 

V.  Emerson, 

1200 

V.  Jordan, 

103 

Dole,  ex  parte. 

1179 

Dommett  v.  Bedford, 

733 

Donaldson  v.  Bank  of 

Cape  Fear, 

229,  559 

V.  Kendall,  202,  206 

Donelson  v.  Posey,  597 

Dongelot  v.  Rawlings,  173 

Doniphan  v.  Gill,  208,  284 

Donnelly  v.  Ryan,  198 

Doremus  v.  McCormick,  173,  199,  234 
Dortie  v.  Dugas,  172,  800 

Doty  V.  Bates,  299 

Dougal  V.  Cowles,  ISO 

Dougherty  v.  Van  Nostrand,  644,  746, 
913,  1002 
Douglass  r.  Wiuslow,  580 

Doughty  V.  Doughty,  532,  971 

Dounee  v.  Parsons,  259 

Dow  v.  Phillips, 

V.  Sayward, 
Dowdall  V.  Lenox, 
Dower  r.  Stan  If  er, 
Dowling  V.  Clarke, 

V.  Clift, 
Downer  v.  Brackett, 
Downing,  ex  parte, 

Matter  of. 


192, 


i\  Linville, 
Downs  v.  Jackson, 
Dowry  v.  Roberts, 
Doyle  V.  Thomas, 
Drake  v.  Blount, 
V.  Elwj'n, 
V.  Thyng, 
Draper  v.  Bissell, 
Drayer  v.  Sander, 
Drenncn  r.  House, 


179 
607 
802 
506 
919,  931 
327 
1200 
1176 
1160 
199 
632 
354 
931 
1014 
103 
258 
356 
281 
100,  116 


Drew  V.  Person, 
Drewry  r.  Montgomery, 
Drumright  v.  Philpot, 
Du  Bois  V.  Samson, 
Dudley  v.  Littlefield, 
Dumont  v.  Rueprecht, 
Dunbar  v.  BuUard, 
Duncan  v.  Clark, 

V.  Lewis, 

V.  Lowndes, 

V.  Tombeckbee  Bank, 
Dundass  i\  Gallagher, 
Dunham  v.  Gillis, 

V.  Hanna, 

V.  Murdock, 

V.  Presby 

V.  Rogers, 
Dunkerson,  re, 
Dunlap  V.  Limes, 

V.  Watson, 
Dunlop  V.  Richards, 
Dunnell  r.  Henderson, 
Dupre  «.  Bods, 
Dupuy  V.  Leavenw6rth, 


Durant  v.  Rogers, 
Durbin  v.  Barber, 
Durham  v.  Hartlett, 
Duryea  v.  Burt, 

V.  Witcomb, 
Dutton  V.  INIorrison, 

V.  Woodman, 
Dwight  r.   Simon, 
Dyas  v.   Dinkgrave, 
Dyer  v.  Drew, 


209, 


Page 
644 

561,  564. 

118,  205 
188 
223 
957 

102,  693 

179 

333 

212 

448 

342 

924 

1019 

1026 

123 

20 

1167 

359 

669 

516,  800 
714 
318 

564,  568 

233,  234 

864,  867 
758' 
15,  597 
16 
979 
112 
156 
436 
818 


Eads  v.  Mason,  •  1012 

Eager  v.  Crawford,  45,  109 

Eagle  Mfg.  Co.  v.  Jennings,  399 


Eakin  v.  Feuton, 

850 

V.  Shumaker, 

523 

Eames,  ex  parte, 

1200 

Earbee  v.  Evans, 

450 

Earl  V.  Hurd, 

106 

Early  v.  Durborow, 

688 

V.  Reed, 

181 

Eason  v.  Cherry,                        515 

,  521 

Eastman  v.  Clark, 

40 

t).  Wright, 

437 

Eaton  V.  Taylor, 

361 

Ebbert's  appeal. 

562 

Ebbinghousen  v.  Worth  Club, 

67 

Eekerly  v.  Alcorn, 

371 

Edens  v.  Williams, 

979 

Edgar  v.  Cook,                         705, 

1033 

V.  Donally, 

553 

Ixxvi 


AMERICAX    AUTHORITIES    CITED. 


Page 

Page 

EfFring  v.  Aikin, 

fel5 

Everit  v.  Strong, 

207 

Edwards  v.  Pitzer, 

445 

Everitt  v.  Watts, 

841 

Egberts  v.  Wood,    183,  184, 

21G, 

360, 

Everson  v.  Gehrman, 

445 

707 

Ewing  V.  Tripe, 

347 

Ege  r.  Kyle, 

453 

Exchange  Bank  v.  Ford, 

474 

Einstein  v.  Gourdin, 

42 

r.  Traccy, 

1000 

Elancy  v.  French, 

463 

Elder  v.  Hood, 

927 

Fabian  v.  Callahan, 

109 

Elkin  r.  Green, 

277 

Fagin  v.  Long, 

332 

Elkintoii  r.  Booth, 

367 

Fagg  V.  Hauibel, 

391 

Ellicott  r.  Nichols, 

305 

Fail  v.  McKce, 

30 

Elliott  r.  Dudley, 

182 

Fairbank  v.  Lear}', 

695,  738 

t\  Stevens, 

552 

Fairchild  r.  Fairchild, 

102, 

561,  563 

Ellis  V.  Allen, 

227 

,  228 

V.  Valentine, 

825 

V.  Bronson, 

343 

;352 

Faler  r.  Jordan, 

1024 

V.  Commander, 

903 

Falkland     v.     St.     Nicholas 

Nat. 

V.  Ellis, 

209 

Bank, 

1201 

v.  Jameson, 

112 

FallPiiver,  &c.  Bank  t\  Sturtevant,  265 

Ellison  T.  Chapman, 

925 

Fall  Pviver  Whaling  Co. 

V.  Borden, 

V.  Smoller, 

126 

102, 

554, 

561,  564 

Ellsworth  V.  Tartt, 

43 

Fanchon  v.  Bibb  Furnace  Co 

175 

Ely  V.  Hair, 

205 

Fanning  v.  Chadwick, 

517,  929 

Emanuel  v.  Bird, 

485 

Fant  V.  West, 

284 

Emerson  v.  Durandj 

645 

Farber  v.  Levi, 

823 

V.  Harmon, 

182 

Farmen  v.  Brooks, 

513 

V.  Parsons, 

955 

Farmer,  In  re. 

561,  1163 

Emery  v.  Canal  Nat.  Bank, 

1195 

V.  Samuel, 

520 

v.  Wilson, 

81 

Farmers',  &c.  Bank  v.  Green 

343 

Emmons  v.  Westfield  Bank, 

22 

Farmers'  Ins.  Co.  i\  Ross, 

41 

England  r.  Burt, 

117 

Farnuni,  ex  j)arte, 

1197 

V.  Curling, 

696 

V.  Patch, 

7 

t\  England, 

23 

Farr  v.  Johnson, 

594 

Englis  i\  Furniss, 

437 

V.  Wheeler, 

111 

Ennis  v.  Williams, 

366 

Farrar  y.  Haselden, 

585 

Ensign  v.  Briggs, 

554 

559 

Farrer  v.  Farrer, 

644 

Epps  V.  Dillaye, 

366 

Farwell  v.  Davis, 

472,  473 

Erwin's  appeal. 

564 

v.  Tyler, 

938 

Espy  V.  Comer, 

426 

Faulds  «.  Yates, 

564 

Estabrook  v.  Messersmith, 

234 

Faulkner  «.  Whitaker, 

432,  433 

V.  Smith, 

461 

Faver  v.  Briggs, 

448 

Estes  V.  Whipple, 

941 

Fay  V.  Davidson, 

17,  42 

Etheridge  v.  Binney, 

294 

472 

V.  Duggan, 

443 

Eusininger  v.  Marvin, 

179 

v.  Finlcy, 

937 

Evans  v.  Carey, 

390 

481 

V.  Noble, 

7 

V.  Clapp, 

652 

Featherstonhaugh  v.  Fenwick 

698,  991 

V.  Cornell, 

172 

Feigley  v.  Sponeberger, 

224 

v.  Evans, 

902 

Felbretch  v.  Armstrong, 

366 

V.  Fisher, 

432 

Felder  v.  Wall, 

857 

V.  Gibson, 

516 

Felichy  v.  Hamilton, 

4,  13,  65 

V.  Hansen, 

542 

Fellows  1).  Greenleaf, 

625 

V.  Montgommery, 

884 

V.  Wyman, 

357 

Everett  v.  Chapman,        103, 

280, 

285 

Felton  i\  Reid, 

585 

V.  Stone, 

1200 

Fenn  v.  Bowles, 

748,  1005 

Everingham  v.  Ensworth, 

196, 

199, 

V.  Harrison, 

270 

274 

V.  Simpson, 

118 

AMERICAN    AUTHORITIES    CITED. 


Ixxvir 


Fenton  v.  Folger, 

Page 
506,  1024 

Ferero  v.  Bulilmeyer, 
Ferguson  v.  Gordon, 
V.  Hasz, 

963 
219 
566 

V.  Hite, 

848 

V.  King. 

452 

Ferris  v.  Shaw, 

67 

Fessler  v.  Hickernell, 

860 

Fick  «.  Mulholland, 

116 

Field  v.  Chapman, 

V.  Tenncy, 
Fieldeu  v.  Lahens, 

574 
108 
182 

Filley  v.  McHenry,  116,  269,  586,  609, 

994,  1016,  1021 

V.  Phelps,  994 

Filly  all  Laverty,  1011 

Findlay  v.  Stevenson,  222 

Finlay  v.  Fay,  625 

V.  Stewart,  918,  931 

Finney  v.  Allen,  468 

V.  Turner,  944 

First  Nat.  Bank  v.  Breeze,  220 

V,  Carpenter,  211 

•u.  Morgan,  179 

V.  Newton,  346 

Fish  V.  Gates,  479 

V.  Herrick,       506,    609,    1016, 

1024 

V.  Miller,  181 

Fisher  v.  Currier,  1065 

v.  Murray,  182 

V.  Pender,  208 

V.  Sweet,  943 

risk  v.  Copoland,  170 

Fiske  «.  Hunt,  1200 

Fitch  V.  Hall,  18 

V.  Harrington,  56,  64,  110 

V.  Stamps,  218 

Fitchbuvn  v.  Boyer,  206 

Fithian  v.  Jones,  1036 

Fitz  V.  Reichard,  515 

Fitzgerald  v.  Christt,  577 

Flagg  V.  Stowe,  6,  594,  601 

Flammer  v.  Green,  975 

Flannagan  v.  Alexander,  275 

Flannigan  v.  Maddin,  991 

Flanuery  v.  Anderson,  449 

Fleming  i).  Billings,  1016 

V.  Dunbar,  206 

Flemming  v.  Prescott,  181,  259 

V.  Lawhorn,  207 

Fleshmau  v.  Collier,  107 

Fletcher  v.  Anderson,  265,  564 

V.  Morey,  1083 

V.  Pollard,  686,  883 


Page 

Fletcher  v.  Reed,  336,  705' 

Flint  V.  Eureka  Marble  Co.,  29 

Florance  v.  Bridge,  359 

Florida  Territory  v.  Redding,  999 

Flournoy  ?).  Williams,  116 

Floyd  V.  Miller,  34S 

V.  Wallace,  287 

Foerster  v.  Kirkpatrick,  434 

Fogarty  v.  Cullen,  413,  485 

Fogerty  v.  Jordan,  117 

Fogg  r.  Greene,  112 

V.  Johnstone,  95T 

Folk  V.  Wilson,  405 

Foltz  V.  Powrie,  '  356 

Fontaine  v.  Lee,  348 

Foot,  re,  1172 

V.  Sabin,  259,  267 

V.  Tabir,  211 

Forbes  v.  Davison,  108 

t\  Scannell,  177 

Ford  V.  Smith,  45 

Fordyce  v.  Shriver,  662 

Forkner'ji.  Stuart,  184,  207 

Forney  v.  Adams,  276 

Forrer  v.  Forrer,  522 

Forrester  c.  Oliver,  586 

Forsyth,  re,  1172 

V.  Merritt,  1091,  1109 

Forster  «.  Lawsou,  464 

Fortune  v.  Brazier,  443,  717 

Fosdick  V.  Van  Horn,  472 

Foster,  ex  parte,  1054,  1200 

v.  Andrew,  266 

v.  Barnes,  566- 

V.  Donald,  684 

V.  Fifield,  175 

■V.  Goddard,  650,  714 

V.  Hall,  963,  1016 

V.  Rison,  843,  846 

Fourth  Nat.  Bank  v.  Atheimer,         40^ 

V.  Caroltou  Railroad,         625,  775 

Fowler  v.  Bailley,  564 

V.  Harrington,  584 

Fox,  Appeal  of,  1020' 

V.  Clifton,  103,  327 

V.  Hanbury,  612,  G13,  980 

r.  Norton,  205,  206 

Francis,  re,  45 

Francis,  The,  146,  529 

Francis  v.  Uickel,  467 

V.  Smith,  332 

Francklyn  v.  Sprague,  604 

Frank  r.  Peters,  602 

Frankland  v.  McGusty,  27 

Franklin  v.  Robinson,  644 


IXXVlll 


i^MERICAN    AUTHORITIES   CITED. 


Pase 

Frazier  r.  Frazier, 

644 

Frederick  t.  Cooper, 

628, 

815 

Freeman  v.  Bloomfield, 

31, 

021 

V.  Carhart, 

1T2, 

448 

V.  Falconer 

352 

V.  Finnall, 

815 

V.  Freeman, 

872 

r.  Ross, 

181, 

259 

Frelighr.  Miller, 

621 

French  r.  Chase, 

1020 

■».  Lovejoy, 

275, 

1022 

V.  Price, 

72 

V.  Rowe, 

225 

Frentress  t.  Markle, 

395 

Frigerio  v.  Crottes, 

686 

Frink  v.  Ryan, 

930 

Frith  V.  Lawrence, 

599 

Fromme  v.  Jones, 

162 

Fronebarger  v.  Henry, 

209 

Frost  V.  Hanford, 

255 

V.  Shackleford, 

460 

V.  Walker, 

110 

Frothingham  v.  Seymour 

1 

82 

Froun  r.  Davis, 

229 

Fuller  V.  Benjamin, 

780 

V.  Percival, 

268 

Fulton  v.  Williams, 

418 

532 

Funk  V.  Leachman, 

826 

Furnival  v.  Weston, 

176 

Gaab  v.  Higgins. 

367 

Gadsen  «.  Carson, 

1016 

Gage  V.  Parmele,        665, 

670,  691 

,807 

V.  Rollins, 

436 

456 

Gaines  t\  Catron, 

568 

Gaither  v.  Caldwell, 

443 

Galbraith,  ex  2yarte, 

1061, 

1066 

«i.  Gedge, 

209,  559 

566 

Gale  V.  Miller, 

195 

348 

Gallagher's  appeal. 

1018 

Gallicott  V.  Planters'  and  Mechan- 

ics' Bank, 

356 

,  369 

Gallop  V.  Newman, 

25 

Gallot  «.  McCluskey, 

436 

Galloway  v.  Hughes, 
Gait  V.  Calland, 

105,  161 

,  697 
283 

Gal  way  r.Fullerton,  574 

V.  Mathew,  262 

Gammon  v.  Huse,  398 

Gannett  v.  Cunningham,  353 

Gano  V.  Samuel,  190 

Gansevoort  v.  Kennedy,  951 

V.  Williams,  266 

Ganson  v.  Lathrop,  1016 

Gantt  T.  Gantt,  102 


Page 

Gard  V.  Clark, 

359 

Gardenir  v.  Bataille, 

955 

Gardenhire  v.  Smith, 

20 

Gardom,  ex  parte, 

211 

Garner  r.  Tilliiny, 

433 

Garretson  «.  Weaver, 

899 

Garrett  v.  Handley, 

458 

Gasset  v.  Morse, 

1059 

Gaston  v.  Kello^, 

514 

Gates  V.  Bennett, 

214 

T.  Pollock, 

210 

Ganger  v.  Pantz, 

924 

Gaut  V.  Reed, 

721 

Gay,  ex  parte. 

1202 

V.  Bowen, 

355 

V.  Johnston,             299, 

469,  1017 

v.  Siebolrl, 

126 

V.  Waltman, 

176 

Gaylor  v.  Peterson, 

855 

Geddes'  appeal, 

807 

Geery  v.  Cockroft, 

228 

Geheebe  v.  Stanley, 

469 

Genese  v.  Cooper, 

740 

George  v.  Tate, 

283 

Geortner  v.  Trustees, 

903 

Gerard  v.  Busse, 

203,  206 

i\  Gateau, 

974 

German  Mining  Co.,  In  re. 

665 

Getty  V.  Devlin, 

102 

Gibson  v.  Moore, 

930 

■».  Stevens, 

609 

t\  Wardon, 

205 

Gilbert,  ex  parte, 

1076 

X.  Whidden, 

108,  110 

Gilchrist  v.  Brande,  113,  366,  439 

Gildersleeve  v.  Mahony,  182 
Gilhooly  v.  Hart,       644,    645,    666, 

667 

Gill  V.  Ferris,  24,  397 

V.  Geyer,  675 

Gillapsy  «.  Peck,  1024 

Gillbank  v.  Stevenson,  22 

Gillet  v.  Hall,  814 

GiUies  v.  Cone,  1058 

Gilman  i\  Cosgrove,  151,  433 

V.  Vaughan,  665,  670 

Gilmore  v.  Merritt,  28 

V.  North  American  Land  Co.,  506 

Gilpin  V.  Temple,  103,  105 

Girdley  v.  Connor,  909 

Given  \'.  Albert  222,  285 

Givin  V.  Selbey,  574 

Glasscock  v.  Smith,  998 

Glassington  v.  Thwaites,  530 

Gleason  v.  Clark,  355 


AMEBIC  AN    AUXnOKlTJES    CITED. 


Ixxix 


Page 

Crleason  ». White,  942 

Glenn  v.  Gill,  820,  1016 

V.  Hebb,  856 

Glover  v.  Tuck,  919 

Goble  i\  Howard,  931 

Goddard  v.  Pratt,  106,  353 

Goell  V.  Morse,  71 

Goepper  «.  Kingsinger,  552 

Golden,  ex  parte,  274 

Goldsborough  v.  Mc Williams,  941 

Goldsmith  v.  Sachs,  917 

Gomersall  v.  Gomersall,  944 

Good  v.  McCartney,  20 

Goodburn  v.  Stevens,     837,  994,  1004 

Goode  V.  McCarty,  269 

Goodeu  1-.  Morrow,  372,  481 

Goodeuough  v.  DuflBeld,  172 

Goodenow  v.  Jones,  325 

Goodman  v.  Einstein,  530 

i\  Whitcomb,  976,  977 

V.  W^hite,  167 

Goodwin  V.  Richardson,  515,  547, 

1016,  1024 

Gordon  v.  Bankard,  116 

v.  Coolidge,  237 

V.  Freeman,  196 

V.  Gordon,  551 

V.  Janney,  151,  433 

1).  Joslin,  406 

«.  Tyler,  522 

Gorman  v.  Russell,        6,  509,  604,  962 

Gossett  V.  Weatherly,  884 

Gould  V.  Gould,  462 

Gouldiug  V.  Bain,  899 

Gouthwaite  «.  Duckworth,  324 

Gover  v.  Hall,  957 

Gowan  v.  Jeffries,  906 

Grady,  ex  parte,  1075 

Grady  v.  Robinson,     33,  205,  341,  398 

Grafton  Bank  v.  Moore,  106,  110 

Graham  v.  Harris,  437 

V.  Holt,  941 

V.  Meger,  232 

V.  Stark,  1055 

Gram  v.  Seton,  203 

Granger  v.  McGilvra,  353 

Grants.  Bryant,  674,  713 

V.  Holmes,  391 

Grasser  v.  Stellwagen,  228 

Gratz  V.  Bayard,  337,  994 

Graves  v.  Kellenberger,  188 

V.  Merry,  356,  369 

■Gray  «.  Brown,  225,  390 

V.  Cropper,  252 

V.  Gibson,  455 


Page 

Grayi-.  Palmer,  62,  102,  104,  286,  583, 

990 

V.  Portland  Bank,  515,  920 

V.  Ward,  179 

Grazebrook  r.  McCreedie,  446 

Great  Western  Tel.  Co.,  re,  532 

Greeley  i\  Wyeth,  277 

Green  v.  Burton,  255 

i\  Buslcj',  4 

t\  Caulk,  113 

V.  Chapman,  437 

V.  Deakin,  274 

v.  Pyne,  468,  476 

V.  Ross,  507,  609 

Greene  v.  Breck,  506 

Greenleaf  r.  Quincy,  420 

Greenwald  v.  Raster,  391 

Greenwood  v.  Brink,  126 

V.  Sias,  117 

Gregg  V.  Fisher,  179,  190,  191 

V.  James,  195 

Greggs  V.  Clark,  594 

Gregory  v.  Dodge,  4 

V.  Harmon,  448 

V.  Martin,  119 

Gribbin  v.  Thompson,  467 

Gridley  v.  Conner,  359,  669,  774,  795, 

855,  896 

V.  Dole,  942,  943 

Griefft'.  Kirk.  450 

Grier  v.  Hood,  447 

Griffin  v.  Orman,  756,  943 

V.  Samuel,  467 

Griffith  V.  Buck,  604,  756.  925 

V.  Buffum,  222,  285 

V.  Chew,  437 

Griggs  V.  Clark,  855,  1005 

Grigsby  v.  Nance,  932 

Grinman  ?j.  Baton  Rouge  Co.,  364 

Grissom  v.  Moore,  585 

Griswold  v.  Haven,  251 

V.  Waddington,  963,  982,  983 

Grobb's  appeal,  560 

Groesbeck  v.  Brown,  446 

Grooves  i\  Tollman,  31 

Grove  v.  Fresh,  856,  884 

V.  Miles,  658 

Gruud  V.  Van  Vleck,  232 

Guidon  v.  Robson,  453 

Guilbeau  f.  Melancon,  562 

Guild  1).  Leonard,  573 

Gulick  V.  Gulick,  172,  929 

Gulke  V.  Uhlig,  107 

GuUat  V.  Tucker,  276 

Gullion  V.  Peterson,  245 


Ixxx 


AMERICAN    AUTHORITIES    CITED. 


Guniiell  V.  Bird, 
Gunter  v.  Jarvis, 
Gurler  v.  Wood, 
Gurr  V.  Martin, 
Guytou  V.  Flack, 
Guzzam  t\  Bebee, 
Guinn  v.  Rooker, 
Gygor's  appeal, 

Haas  v.  Roat, 
Hackley  v.  Hastie, 
Haddock  v.  Crocheron, 
Hafer,  ex  parte, 
Hagar  v.  Stone, 
Hagendobler  v.  Lyon, 
Haggerty  v.  Granger, 
Haight  V.  Burr, 
Halle  V.  York, 
Haines  v.  Hollister, 
Haldeman  v.  Bank  of  M 

Halderman  v.  Halderman, 
Hale  V.  Brennan, 

V.  Heuric, 

V.  Van  Saun, 

V.  Wilson, 
Halfhide  v.  Fenning, 
Hall,  ex  parte, 

V.  Clagett, 

V.  Cook, 

V.  Edson, 

V.  Green, 

V.  Jones, 

V.  Lanning, 

V.  Leigh, 

V.  Logan, 
Hal  lack  x.  March, 
Haller  v.  Williamowicz, 
Halliday  v.  Bridewell, 

t\  Sl'Dougal, 
Halls  V.  Coe, 
Halsey  v.  Whitney, 
Halstead  v.  Schmelzel, 

r.  Sliepard, 
Hamill  r.  Hamill, 

r.  Purviss, 

V.  Willett, 
Hamilton  ?'.  Buxton, 

«.  Hamilton, 

V.  Hodges, 

V.  Seauuui, 
Hamilton  v.  Somers, 
Hamersley  v.  Lambert, 
Hamlin,  re, 


P.ijre 

Pago- 

859 

Hammond  r.  Aiken, 

344 

488,  585 

r.  Coolidge, 

1202 

2;«2 

V.  Douglas, 

687,  1003 

23 

V.  St.  John, 

491,  585 

571,  823,  906 

Hamper's  appeal, 

645 

467 

Hancock  v.  Hintrager, 

55,  58 

205,  206 

Hanks  r.  Barber, 

937 

666,  670 

Hanna  v.  Flint, 

19 

V.  Wray, 

1001 

42 

Hansmith  v.  Espy, 

433 

355 

Hanway  v.  Robertshaw, 

586 

348 

Hapgood  V.  Coruevell, 

604 

1203 

Hardy  v.  Mitchell, 

1010 

459 

Harman  v.  Fishar, 

441 

360,  482 

Harp  V.  Tom  11  n  son, 

332. 

183 

Harper  v.  Fox, 

507 

899 

V.  Wrigley, 

199 

32 

V.  Lamping, 

882 

775 

Harrick  v.  Ames, 

815 

ddletown. 

Harris  v    Harris, 

939- 

179,191 

V.  Hillegass, 

22,  785 

1,                 942 

ti.  Lindsay, 

398,  399 

113 

V.  Miller, 

284 

562 

r.  Fcaroe, 

156- 

449 

T.  Schultz, 

315 

929 

V.  Sessler, 

58. 

761,  763,  764 

Harrison  v.  Clare, 

391 

1065 

V.  Farrington, 

809,  847,  848- 

354,  691 

V.  Jackson, 

176,  203,  207 

161 

«.  Righter, 

823 

19 

i\  Story, 

1084 

161 

Hart  i\  Clark, 

'  604 

371,  394,  408 

t.  Finigaii, 

841 

359 

V.  Tomlinson, 

736 

71 

V.  Withers, 

203,  206- 

945 

V.  Woodruff, 

991 

175 

Hartley  v.  Kirlin, 

357 

660,  716,  817 

V.  White, 

276 

44 

Hartman  v.  Woehr, 

33,  827,  975 

106,  310 

Hartness  v.  Thompson, 

469 

199 

Hartough,  ex  parte, 

1067,  1070 

162 

Hartung  v.  Siccardi, 

498 

940 

Harvey  v.  Childs, 

18 

267,  357 

V.  Mc  At  lams, 

231 

905 

T.  Varney, 

654,  820,  896 

210 

Harwood  v.  Edwards, 

176 

572 

Hasbrouck  v.  Childs, 

687 

468 

Haskell  v.  Adams, 

939 

919,  932 

Haskins  v.  Aleott, 

150,  433 

266 

V.  Burr, 

33 

356 

Haskinson  r.  Elliott, 

191,  222 

179,  306,  355 

Haslet  T.  Street, 

359,  444,  452 

414,  485 

Haslett  «.  Wothcrspoon 

6 

1202 

Hasley  v.  Whitney, 

22& 

AMERICAN    AUTHORITIES    CITED. 


Ixxxi 


Page 

Page 

Hastings  v.  Hopkinson, 

108, 

309 

Hennegin  v.  Wilcoxon, 

942 

943 

Hatch  V.  Foster, 

565 

Henry,  re, 

1079 

■V.  Wood, 

472 

V.  Henry, 

1023 

Hatchett  v.  Blanton, 

394 

Henry  County  v.  Gates, 

203 

Hatheway's  appeal, 

169 

Henshaw  i\  Root, 

107 

Hatton  V.  Stewart, 

219 

Herbert  v.  Kanrick, 

205 

Hatzenbuhler  v.  Lewis, 

460 

V.  Odlin. 

218 

HaufFv.  Howard, 

561 

563 

Hermanns  V.  Duvigneaud, 

72 

181 

Haughey  v.  Strickler, 

117 

Heroy  v.  Van  Pelt, 

341 

Haughton  v.  Eustis, 

1200 

Herrick  v.  Ames, 

827 

Hauser  v.  Smith, 

453 

V.  Conant, 

858 

446 

Havana,    &c.  R.   R.   Co.   i 

K  Walsh, 

Heshion  v.  Julian, 

29 

285 

Hester  v.  Baldwin, 

1185 

Haven  v.  "Wakefield, 

946 

V.  Lumkin, 

265 

V.  White, 

437 

Hewitt  V.  Kuhl, 

889 

Havens  v.  Hussey, 

184 

V.  Northrup, 

1091 

Hawes  v.  Dunton, 

179 

v.  Patrick, 

447 

Hawley  v.  Hurd, 

471 

V.  Rankin, 

561 

,  564 

Hawkins  v.  Appleby, 

234 

243 

Heydon  v.  Heydon, 

612 

V.  Hastings  Bank, 

214 

Heye  v.  Bolles, 

186 

«.  Waller, 

243 

Hibbler  v.  DeForrest, 

188 

Hawks  V.  Hinchcliff, 

420 

Hickerson  v.  McFaddin, 

754 

Hayes  v.  Baxter, 

220 

Hickman  v.  Kunkle, 

265 

V.  Heyer, 

822 

V.  Reineking, 

175 

,  265 

Haynes  v.  Carter, 

369 

Hicks  V.  Bronton, 

468 

V.  Seachrest, 

205 

V.  Crain, 

60 

Hayward  v.  French, 

191 

•V.  Maness, 

468 

Haywood  v.  Harmon, 

218 

V.  Wyatt, 

383 

Hazard  v.  Caswell, 

125 

,363 

Hier  v.  Odell, 

368 

V.  Hazard, 

12,  18, 

820 

High,  ex  parte, 

1156 

Hazelhurst  v.  Pope, 

392, 

933 

Higinbotham  v.  Holme, 

733 

Head  v.  Sleeper, 

180 

470 

Hill,  ex  parte, 

73:5 

Heaston  v.  Cincinnati,  &c. 

R.  R. 

V.  Beach,                  566, 

610, 

1016 

Co., 

151 

434 

V.  Clarke, 

936 

Heartt  v.  Corning, 

170 

883 

V.  King, 

665 

V.  Walsh, 

196 

363 

v.  Marcy, 

405 

Heath  v.  Gregory, 

284 

V.  Marsh, 

436 

«.  Waters,                   644,  646, 

999 

V.  Matta, 

645 

,  881 

Heavilon  n.  Heavilon, 

943 

V.  M'Neil, 

490 

Eeckert  v.  Fegely, 

42 

V.  Packard, 

459 

Hedge's  appeal. 

12 

V.  Palmer, 

917 

Heenaa  ■;;.  Nash, 

296 

Hilliker  v.  Loop, 

459 

Heflferman  v.  Brenhan, 

448, 

449 

Hillisberg  v.  Burthe, 

669 

Heflfron  v.  Hanaford, 

171, 

259 

Hills  T.  Bailey, 

285 

Hegeman  v.  Hegeman, 

126 

V.  Ross, 

452 

Heinsheimer  v.  Shea, 

1058 

Hine  v.  Bowe, 

463 

Heirn  v.  McCaughan, 

232 

Hinman  v.  Little, 

60 

Hemtz  V.  Cahn, 

454 

Hinton,  ex  parte, 

733 

Hellmen  v.  Mendel, 

647 

V.  bdenheimer. 

632 

Henderson  v.  Barbee, 

206 

Hirsch  v.  Adler, 

781 

V.  Haddon, 

617 

Hiscock  1).  Phelps, 

561 

,  564 

Hendrie  v.  Berkowitz. 

259 

Hitchcock  V.  St.  John, 

185 

Henecy,  ex  parte. 

733 

Hite  V.  Hite, 

648 

669 

Henessy  v.  Western  Bank, 

177 

Hoard  v.  Clum, 

994 

Henn  v.  Walsh, 

815, 

962 

Hobart  v.  Ballard, 

906 

F 


Ixxxii 


AMERICAN    AUTIIOKITIES    CITED. 


Page 

Hobart  v.  Howard,  926 

v.  Lemon,  97 

Hobbs  r.  Wilson,  758 

Hodges  V.  Daws,  19 

V.  Harris,  162,  207,  216 

V.  Holeman.  597.  005 

V.  Parker,  665,  666,  918 

Hodgmaii  v.  Smith,  19 

Hodgson,  ex  parte,  733 

V.  Baldwin,  640 

Kodson  V.  Porter,  206 

Hogau  V.  Reynolds,  197 

i>.  Calvert,  923 

Hogendobler  v.  Lyon,  492 

Hogg  V.  Orgill,  179 

Hogle  V.  Lowe,  564 

Holande  ^^  Butterworth,  346 

Holbrook  «.  St.  Paul  F.  &  M.  Ins. 

Co.,  145 

V.  Wight,  222 

Holbrooke  v.  Oberne,  19 

Holden  v.  Bloxum,  301 

V.  French,  20 

V.  M'Makin,  550,  746 

V.  Peace,  522,  668 

Holderness  v.  Schackle,  581 

Holifield  V.  White,  15,  .610 

Holladay  v.  Elliot,  820,  964 


Holland  v.  Butler, 

432,  433 

V.  Fuller, 

586,  999 

«.  Long, 

366 

Hollenback  «.  Moore, 

247,  248 

HoUis,  ex  parte. 

1058 

HoUister  v.  Barkley, 

659 

Holloway  v.  Briukley, 

15 

V.  Turner, 

1017 

Holman  v.  Carhart, 

467 

V.  Nance, 

930 

Holmes  v.  Burton, 

300 

t\  Caldwell. 

373 

V.  De  Camp, 

437,  584 

V.  Huwe, 

665,  815 

«.  Hubbard, 

760 

«.  Kortlander, 

219 

V.  McCray, 

955 

v.  McDowell, 

909 

V.  Old  Colony  R.  R. 

Co.,            98 

V.  Self, 

561 

f.  Shards, 

355 

V.  United  States  Ins.  Co.,  72 

Holt  V.  Kernodle,  436 

V.  Simmons,  188,  347 

Holtgreve  v.  Wilkner,  368 

Holton  V.  Holton,  1016 

Holyoke  v.  Mayo,  929 


Page 

776 

199 

512,  594,  665, 

58,  674,  691,  908 

755 

181 

363,  1000,  1036 

399,  411 

211 

1072 

394 

72 

121 

806 

361.  532 


Homer  v.  Abbe, 

v.  Wood, 

Honore  v.  Colmesnil, 

6 

Hood  V.  Spencer, 

Hook  V.  Stone, 

Hooley  v.  Gieve, 

Hoopers  i\  McCan, 

Hope  V.  Cust, 

Hopkins,  re, 

V.  Carr, 

V.  Forsythe, 

V.  Smith, 

V.  Watt, 

Horbach  v.  Huey, 

Horn  V.  Newton  City  Bank,  188 

Horsey  v.  Heath,  182,  1012 

Horton  v.  Child,  207,  418 

Horton's  appeal,  979 

Hosack  V.  Rogers,  419 

Hosmer  v.  Burke,  468 

Hotchin  ^■.  Kent,  167 

Hotchkiss  «.  Ladd,  300 

V.  Lyon,  175 

Ilouseal's  appeal,  1016 

Houser  v.  Irvine,  427 

How  V.  Kane,  421,  473 

Howard  v.  Jones,  609 

V.  Patrick,  113 

Howe  V.  Howe,  17 

V.  Learing,  747 

V.  Thayer,  342 

Howell  v.  Adams,  341 

11.  Brodie,  327 

V.  Harvey,        658,  776,  951,  961, 

964,  974 

V.  Reynolds,  486,  520 

v.  Wilcox  &  Gibbs  S.   M.  Co., 

265 

Hoxie  v.  Carr,  533,  561,  506 

Hoyt,  ex  j^ai'te,  1061 

V.  McLaughlin,  851 

V.  ]\Iurphy,  497 

V.  Sprague,  511 

Hubbard  v.  Curtis,  1024 

V.  Guild,  354 

V.  Matthews,  703 

Hubbell  V.  Skiles,  490 

V.  Wood,  31 

V.  Woolf,  33 

Hubble  V.  Perrin,  1016 

Huckabee  r.  Nelson,  33 

Hudgins  v.  Lane,  480 

Hudson  v.  McKenzie,  169 

Hudson  V.  Simon.  105 


AMERICAN   AUTHORITIES    CITED. 


Ixxxiii 


Page 

Page 

Huff  «.  Lutz 

1001 

Ingraham  v.  Foster 

804 

Hughes,  re, 

1204 

Irby  V.  Brigham, 

107 

V.  Boring 

463 

V.  Graham, 

1024 

V.  Ellison, 

181 

V.  Vining, 

350 

V.  Waldo, 

331 

Irvin  V.  Forbes, 

535 

V.  Walker, 

151,  432 

V.  Nashville,  &c.  Ry 

.  Co.,           13 

Hughuley  v.  Morris, 

13 

Irwin  V.  Bidwell, 

33 

Hulett  V.  Fairbanks, 

15 

t\  Williar, 

168 

Human  v.  Cuniffe. 

282 

Isaacs,  re, 

1172 

Humes  v.  O'Bryan, 

118,  108 

Isler  V.  Baker, 

341,  356,  970 

Humphries  v.  Chastien, 

357 

Ives  V.  Miller, 

942 

-Hunt  V.  Chapin, 

188 

V.  Gookin, 

818 

Jackson  v.  Alexander, 

471,  472 

V.  Hall, 

341,  346 

V.  Clymer, 

1023 

V.  Pooke, 

1067 

V.  Geese, 

914,  962 

V.  Rogers, 

938 

V.  Hollowaj^ 

269 

V.  Semonin, 

437 

V.  Johnson, 

666 

V.  Thibbets, 

.     740 

V.  King, 

1012 

Hunter  v.  Little, 

645 

V.  Robinson, 

72 

V.  Wayrick, 

166 

V.  Standford, 

208 

V.  Whitehead, 

102,  800 

Jackey  v.  Butler, 

612 

Huntington  v.  Lymun, 

265 

Jacobs  V.  M'Bee, 

207 

v.  Potter, 

344 

Jacquin  v.  Buisson, 

903,  994 

Hupp  V.  Hupp, 

498 

Jacques  v.  Greenwood, 

1025 

Hurd  V.  Haggerty 

191 

V.  Marquand, 

245 

Hurlbut  V.  Post, 

472 

James  v.  Bostwick, 

206,  693 

Hurst  V.  Hill, 

355 

V.  Stratton, 

607 

Hust  V.  Clark, 

276 

January  v.  Pontz, 

1029 

Husted  V.  Ingraham, 

283 

Jarman  v.  Ellis, 

201 

Hutchins  v.  Bank  of  Tenn., 

369 

Jarvis-y.  Brooks, 

565,  1016 

V.  Childress, 

172,  174 

V.  Hyer, 

615 

V.  Gilman, 

198 

Jefferys  «.  Smith, 

532 

V.  Hudson, 

191,  366 

Jeffreys  v.  Coleman, 

205 

t\  Turner, 

191 

Jenkins  v.  Peckinpaugh, 

659 

Hutchinson  v.  Onderdonk, 

654 

Jenness  v.  Carleton, 

994,  999 

V.  Smith,       .   245,  321, 

360,  1000 

V.  Smith, 

485 

Hutton  «.  Laws, 

1004 

Jennings  v.  Chandler, 

903,  994 

Hyams  v.  Rogers, 

169 

V.  Estes, 

172 

Hyde  v.  Easter, 

820 

i\  Rickard, 

827 

Hyer  v.  Burdett, 

824 

Jessup  V.  Cook, 

881,  920 

V.  Norton, 

333 

Jewett,  ex  parte, 

1176,  1185 

Hynes  v.  Stewart, 

804 

re, 

60,  437,  1073 

Hyrschfelder  v.  Keyser, 

228 

V.  Brooks, 

928 

Johns  V.  Rattin, 

205,  206 

Iddings  v.  Pierson, 

342,  860 

Johnson's  appeal. 

525 

Ihmseu  v.  Lathrop, 

958 

Johnson,  ex  parte, 

1057 

V.  Negley, 

260 

V.  Berlizheimer, 

999 

Iliff  V.  Brazil, 

72 

V.  Bernheim, 

224,  255 

HHnois,  &c.  R.  R.  Co.  v.  Owens,  37,       i 

V.  Byrd, 

468 

285 

V.  Clark, 

565 

Inbusch   V.    Farwell,       505 

1016, 

V.  Crichton, 

276 

1019 

V.  Hartshorne, 

666,  670,  994 

Indiana,  &c.  Co.  v.  Bates, 

564 

V.  Robinson, 

177 

Ingalls,  ex  parte. 

1173 

v.  Rogers, 

609 

Inglebright  v.  Hammond, 

106 

V.  Smith, 

150,  433 

Ixxxiv 


AMERICAN    AUTHORITIES    CITED. 


Pa<;e 

Johnson  v.  Totten, 

3(56 

Johnston's  appeal, 

r.2 

Johnston,  re, 

1202 

V.  Brown, 

147 

V.  Dntton, 

189,  264,  535 

r.  Freer, 

777 

V.  Warden, 

113 

Jones'  appeal. 

562 

Jones'  Case, 

196,  199 

Jones  V.  Bailey. 

175 

V.  Blair, 

497 

V.  Booth, 

268 

V.  Call, 

13 

V.  Caperton, 

318 

V.  Clark, 

693 

V.  Dexter, 

991 

0.  Fegely, 

27 

V.  Hardesty, 

488,  1000 

V.  Hurst, 

444 

V.  Jones,  594,  650, 

665,  674,  841, 

8G1 

t\  Lusk, 

269,  1017 

V.  Neale, 

208 

V.  Noy, 

966 

i\  Sleeper, 

1059 

«.  Thompson, 

507,  609 

Jordan,  hi  re. 

245 

V.  Miller, 

900 

V.  Wilkin s, 

24,  461 

Joseph  V.  Fisher, 

106 

Joslyn  V.  Taylor, 

490 

Judd  r.  Hubbell, 

470 

Judge  V.  Braswell, 

188 

Judson  V.  Adams, 

20 

Junck  i\  Hezeau, 

857 

Justices  V.  McLaren, 

999,  1006 

Kahn  v.  Smelting  Company,  622 
Kaskaskia  Bridge  Co.  v.  Shannon,  174 

Kasson  v.  Brocker,  206 

Kauffman  v.  Fisher,  426,  446 

Kayser  v.  Maughan,  15,  65 

Kean  v.  Johnson,  796 

Kearney  v.  Fenner,  448 

V.  Snodgrass,  327 

Keeley  v.  Greenleaf,  516 

Keith  V.  Fink,  395 

V.  Pratt,  490 

Kelleher  v.  Tisdale,  105 

Keller  v.  Ilicks,  470 

V.  West,  207 

Kelley  v.  Foot,  235 

V.  Greenleaf,  275 

V.  Ilurlbert,  346 

Kellogg  V.  Fancher,  275 


Kellogg  V.  Totten, 
Kelly  V.  Baker, 

V.  Devlin, 

V.  Eckford, 

V.  Greenleaf, 

V.  Kauffman, 

V.  Murphy, 
Kelsey  v.  Hobby, 
Kelton  V.  Leonard, 
Kemeys  v.  Richards, 
Kemp  V.  Carnley, 

V.  Coffin, 
Kenan  v.  Starke, 
Kendall  v.  Rider, 
Kendrick  v.  Campbell, 

V.  Tarbell, 


Kennebeck  Co. 

Co. 
Kennedy  v.  Bohannon, 

V.  Kennedy, 

V.  Lee, 

V.  McFadon, 

V.  Richey, 

V.  Shiltou, 
Kennej'  v.  Atwater, 
Kenniston  i).  Avery, 
Kent  V.  Majoiner, 

V.  Wells, 
Kerr  v.  Potter, 

V.  Sharp, 
Kerrick  v.  Stevens, 
Kershaw  v.  Matthews, 
Ketcham  v.  Clarke, 
Ketchum,  /?i  re, 

V.  Durkee, 
Kidd  V.  Brown, 
Kidder  v.  McHlhenny, 

V.  Page, 
Kill  V.  HoUister, 
Killam  v.  Preston, 
Kimball  v.  Gearhart, 

V.    Hamilton,    &c.  Ins 


Pago 

550,  73{> 

183 

104,  123 

835,  885 

691 

632 

343 

753 

259 

272 

177 

356 

455 

561,  1023 

355 

299,  674,  853 


Augusta  Ins.  &c. 

213 
341 
961 
550 
942 
491 
847 
73,  366 


V.  Lincoln, 
V.  Thompson, 
Kimble  v.  Seal, 
Kimbro  v.  Bullitt, 
Kimmins  v.  Wilson, 
King  V.  Barbour, 
V.  Faber, 
V.  Haines, 
V.  Hamilton, 
V.  Leighton, 
V.  Wartelle, 
V.  Weeks, 


428 
126 
468 
19 
245 
702 
700 
341,  346,  623 
233 

603,  817 
447 
934 
1017 
763 
929 
604 
Co., 

182,  228 

532,  644,  647,  999 

572 

839 

163,  188 
81,  801 
116 
266 
467 

644,  645 
339 
686 
505 


553, 


AMEKICAN    AUTHORITIES    CITED. 


Ixxxv 


Page 

Kin^  V.  Whiton, . 

516, 

862 

Kingman  i\  Spurr,            621, 

625, 

627 

Kinlock  v.  Hamlin, 

920 

Kinney  v.  Robinson, 

821 

Kinsler  v.  McCauts 

585 

Kinsman  v.  Dallham, 

298 

».  Parkhurst, 

521 

Kirk  V.  Hiatt, 

173, 

359 

■».  Hodgson, 

535 

Kirkby  v.  lugersoll. 

899 

Kirkman  v.  Snodgrass, 

366 

Kirkpatrick  v.  Turnbull, 

179 

Kiiby  V.  Carpenter, 

1016 

V.  Common, 

469 

«.  Hewitt, 

352 

v.  Ingersoll, 

183 

Kituer  v.  Whitlock, 

146, 

220 

Klock  V.  Beckman, 

174 

Knapp  V.  Edwards, 

885 

V.  McBride,        179,  337, 

858, 

994 

Knight,  re, 

1177 

V.  Ogden, 

611 

Knott  V.  Knott, 

561 

Knowlton  v.  Reed, 

1033 

Knox  V.  Schepler,             486, 

506, 

586 

Kockler  v.  Brown, 

931 

Koenig  v.  Adams, 

705 

Koningsburg  v.  Launitz, 

577 

Kountz  V.  Holthouse, 

332 

Kramer  v.  Arthurs, 

7 

610 

Kratzer  v.  Lyon, 

163 

438 

Kull  V.  Thompson, 

198 

Kyle  V.  Roberts, 

304 

Lact«.  Hall, 

565 

V.  Le  Bruce, 

946 

Ladd  v.  Billings, 

606 

V.  Griswold, 

604 

Ladue  v.  Hart, 

497 

Laflfan  v.  Naglee, 

522 

Lafferty  v.  Wheeler, 

126 

Lafon  V.  Chinn, 

42 

Lafond  v.  Deems, 

67 

Lahey  «.  Kingon, 

445 

Laird  v.  Ivens, 

342 

Lale  V.  Dishman, 

815 

Laler  v.  Jordan, 

179 

,  280 

Lamalere  v.  Caze,      847,  929 

941 

,  942 

Lamar  v.  Russel, 

168 

Lamb  v.  Durant, 

162 

,  227 

i\  Grover, 

18 

V.  Salters, 

359 

V.  Singleton, 

341 

Lambden  v.  Sharp, 

202 

,  206 

Xamkin  v.  Phillips, 

196 

,  564 

Page 
La  Mont  v.  Fullara,  29 

Landolfo  v.  Appleton,  405 

Lancaster  Bank  v.   Myerley,     565, 

566 


Lane,  re, 

V.  Arnold, 

«.  Carpenter, 

■».  Roche, 

V.  Tyler, 
Lang  V.  Fiske, 

«.  Oppenheira, 

V.  Waring, 
Langan  i\  Hewett, 
Lange  v.  Kennedy, 
Langford  v.  Patton 
Lanier  v.  McCabe, 

V.  The  Mayor, 
Lannon  v.  Clavin, 
Lansing  v.  Gaine,  259,  266,  355,  356, 

369 
Lararus  v.  Long, 
Larkins  v.  Rhodes, 
Lash  V.  Arnold, 
Lastrapes  v.  Blanc, 
Lathrop  v.  Atwood, 
Lauffer  v.  Cavett, 
Laughlin  v.  Lorenz, 
Laverty  v.  Burr, 
Law  V.  Ford, 
Lawrence  v.  Clark, 

V.  Dale, 

V.  Kinsting, 

V.  Taylor, 

V.  Trustees, 
Layton  v.  Hastings, 
Lea  V.  Guice, 
Leabo  v.  Goode, 
Leach  v.  Leach, 

V.  Milburn  Wagon  Co., 
Leaf's  appeal, 
Leather  Bank  v.  Herz, 
Leavitt  v.  Peck, 
Ledden  v.  Colby, 
Lee  V.  Bullard, 

V.  Craig, 

V.  Dolan, 

V.  Lashbrooke, 

V.  Onstott, 
Lefavour  i\  Yandes, 
LeFavre  v.  Cassagnio, 
Lefevre's  appeal, 
Lefever  r.  Underwood, 
Leffier  T.  Rice, 
Leftwich  v.  Clinton, 
Leftwitch  v.  Leftwitch, 


1185 

125,  1040 

515,  516 

917 

561,  929 

175 

943 

181,  259,  566,  568 

211,  264 

356 

432 

266 

143 

841,  857 


174 

102 

151,  433 

1059 

758 

560 

1033 

181,  258 

905 

939 

169 

280 

219,  229 

1011 

206,  208 

28,  172,  697 

405 

687 

1017 

569 

367 

263 

490 

615 

'  663 

1005 

644,  665,  667 

206 

173 

19 

562 

660,  922 

191 

124 

1004 


44, 


Ixxxvi 

AMERICAN 

AUl 

Page 

Leggett  v.  Hyde, 

25 

Leland,  re, 

1177 

Lemitte  v.  Starr, 

258 

Lemon  v.  Fox, 

297 

Leonard  v.  Leonard, 

918 

V.  Wildes, 

361 

V.  Winslow, 

269 

Le  Page  v.  McCrae, 

939 

Le  Roy  v.  Johnson, 

145    163, 

350 

V.  Muthewson, 

82 

Lessiter  v.  Jackman, 

045 

Lester  v.  Pollock, 

572 

Lesure  v.  Norris, 

498 

Letzer  v.  Beale, 

63 

Leva  11  y  «.  Ellis, 

433 

Levi  V.  Karrick, 

644 

714 

V.  Lutham, 

188 

Levine  v.  Michel, 

Y95 

893 

Levy  V.  Bush,- 

102 

0.  Cowan, 

610 

T.  Ley, 

905 

V.  McDowell, 

104 

Lewis,  ex  farte. 

1054 

T.  Allen, 

174 

V.  Conrad, 

1016 

V.  Langdon, 

586 

V.  jMoffet, 

644 

V.  Post, 

110 

111 

Liadert  v.  Adams, 

977 

Liagre  v.  Peacock, 

336,  855 

962 

Lilly  V.  Kroesen, 

991 

Lime   Rock    Bank   v.    Phetteplace, 

565 

Limelock,  &c.  Ins.  Co.  v.  Treat,      265 

Lindell  v.  Lee,  934 

Lindley  v.  Davis,  563 

Lindmeir  v.  Monahan,  870 

Lindsey  v.  Edmiston,  28 

Linford  v.  Linford,  1019 

Lintner  v.  Millikin,  25 

Linton  v.  Hurlev,  231,  476 

Littell  V.  Fitch,  ~  179 

Little  V.  Clark,  366 

r.  Hamilton,  285 

r.  Hazard,  206 

V.  Snedcor,  565 

V.  Stanton,  849,  683 

Liverpool,    &c.   Nav.   Co.  v.  Agar, 

467 
Livingston  v.  Cox,  155,  163 

V.  Harvey,  432,  433 

t.  Hastie,  259,  266 

V.  Lynch,  163,  535 

V.  Pittsburgh,   &c.  R.  R.   Co., 

169 


AUTHORITIES    CITED. 


Page 

Livingston  v.  Roosevelt,  169,  259,  266, 

268,270,  274 

Lloyd,  re,  1172,  1177 

Lloyd  V.  Carrier,  666,  667 

Locke  V.  Lewis,  275,  574 

«.  Stearns,  234 

Lockhart  v.  Hanell,  774 

Lockridge  v.  Wilson,  106 

Lockwood  V.  Beckwith,  515,  516 

V.  Comstock,  356 

■V.  Mitchell,  586,  824 

Lockj-er  v.  Savage,  733 

Lodge  V.  Dicas,  403 

Lodiker  v.  Applegate,  20 

Loeb  v.  Pierpoint,  177 

Loeschigk  v.  Hatfield,  1000 

Logan  V.  Bond,  245 

Logie  V.  Black,  20 

London,  etc.,  Society  v.  Hagerstown, 

&c.  Bank,  162 

Long  V.  Carter,  169 

V.  Majestre,  821 

V.  Story,  356 

Loomis  V.  Barker,  233 

1-.  iMarshall,  19 

T.  Pierson,  356,  359,  444 

Lord  i:  Baldwin,  472,  1019 

V.  Parker,  97 

V.  Proctor,  26 

Lothrop  V.  Adams,  234 

Love.«.  VanEvery,  532 

Lovejoy  v.  Bowers,  228 

V.  Spafford,  342,  370 

Lovne}'  v.  Giilenwaters,  660 

Lowe  T.  Penn}^,  366 

Lowenstein,  Matter  of,  185,  447 

Lower  v.  Denton,  942 

Lowery  v.  Drew,  205,  206 

Lowry  v.  Brooks,  18 

T.  Cobb,  515,  521 

Lucas  V.  Atwood,  1016 

t\  Bank  of  Darien,  171,  369 

V.  Cole,  33 

V.  Coulter,  831 

V.  Sanders,  206 

Luce  V.  Hartshorn,  686 

Ludington  r.  Bell,  391 

V.  Taft,  819 

Ludlow  V.  Cooper,     30,  566,  567,  785, 

1007 

Lumbermen's  Bank  v.  Pratt,  357 

Lunt  V.  Lunt,  125 

t\  Stevens,  196,  391 

Lusk  r.  Smith,  350 
L3^man  v.  Lyman,        65,  644,  648,  910 


AMERICAN    AUTUOBITIES    CITED. 


Ixxxvii 


Lynch  v.  Bitting, 
V.  Thompson, 
Lyndon  v.  Gorham, 
Lyon  V.  Johnson, 

Mabbett  v.  White, 
Machinists'  Bank  v.  Krum, 
Mackay  v.  Bloodgood, 
Mackey  v.  Auer, 
Mackintosh  v.  Tatinan, 
Machn  v.  Crotcher, 
Macon  Bank  v.  Ells, 
Macy  V.  Combs, 
V.  DeWolf, 


840 

16 

506,  609 

368,  388 

216 
468 
206 
929 
757 
300 
363 
12 
72 


McAdam  v.  Hayes,  981,  983 

McAllister  v.  Montgomery,  568 

McArthur  v.  Ladd,  15 

McBain  v.  Austin,  227 

M'Bride  v.  Hagan,  203 

McCabe  v.  Franks,  884 

McCall  V.  Moschovwitz,  747 

V.  Moss,  308 

V.  Oliver,  929 

McCament  r.  Gray,  818 

McCandless  v.  Hadden,  487 

McCart  v.  Lewis,  206 

McCarthy  v.  Fitts,  482 

V.  Nash,  55 

M'Carty  v.  Emlen,  506 

McCaskey  v.  Pollock,  58 

McChesney  v.  Kipp,  *    933 

M'Clelland  i\  Lindsay,  112 

McClelland  v.  Remsen,  162 

McCollough  V.  Judd,  468 

V.  Sommerville,  216 

McCoon  V.  Galbraith,  373 
McCormick's  appeal,  568,  860,  1018 
McCormick  v.  McCormick,       600,  670 

McCorrin  v.  Cubbinson,  348 

McCotter  v.  McCotter,  462 

M'Coy  V.  Lightuer,  450 

McCrae  v.  Robeson.  659 
McCrary  v.  Slaughter,        16,  188,  281 

McCulioch  V.  Judd,  467 

McCullough  V.  Sommerville,  282 

McDonald  c.  Beach,  1019 

V.  Eggleston,  208,  207 

V.  Matney,  13 

V.  Parker.  287 
McDonnell  v.  Battle  House  Co.,         23 

McDougal  V.  Banks,  564 

McDuffie  V.  Bartlett,  103,  1025 

McElroy  v.  Ludlam,  174 

V.  Melear,  '     348 

McElvey  v.  Lewis,  157 


McEncroe  v.  Decker, 
McFadgen  v.  Harrington, 
M'Farland  v.  Lewis, 
McGaun  v.  Hanlin, 
McGehee  v.  Dougherty, 
McGill  V.  Dowdle, 


Page 
887 
172 
117 
138 
929 
14 


V.  McGill,  337,  1014 

McGlensey -i'.  Cox,  621,721 

McGowan    Bros.    Pump  and    Ma- 
chine Co.  V.  McGowan,      746 

V.  Sprague,  604,  806 

McGrath  v.  Sinclair,  568 

McGregor  v.  Bainbridge,  103 

V.  Cleveland,  145,  189,  436 

V.  Ellis.  604 

McGrew  v.  Walker,  103 

McGuire  v.  Blanton,  211 

:p.  O'Hallaran,  106 

V.  Ramsey,  565,  778,  7!i0 

Mcllvaine  v.  Armfield,  69 

McKee  v.  Griffin,  562 

McKenzie  v.  Dickinson,  515 

McKeown  v.  Guild,  842,  845 

McKinney  v.  Brights,  269 

V.  Peck,  467 

«.  Smith,  220 

McKowen  v.  McGuire,  586,  999 

McKnight  v.  McCutchen,  942 

M'Lain  v.  Carson,  485 

McLanahan  v.  Ellery,  753 

McLaughlin  v.  Simpson,  818 

McLean  v.  Eastman,  1105 

V.  Ihmsen,  1059,  1084 

V.  Johnson,  1059 

V.  Meline,  1059 

McLellan  v.  Penuell,  172 

McMahon  v.  McCleman,  516 

V.  Shorenton,  780 
McMichael  v.  Raoul,       855,  884,  1005 

McMullen  «.  McKenzie,  110 

McNair  v.  Piatt,  196.  199 

V.  Rayland,  659,  843 

v.  Rewey,  522 

McNally  ';.  Kerswell,  485,  584 

McNamara  v.  Draft,  107,  120 

McNeill  V.  Reynolds,  120,  219 

McNeish  v.  Hulless  Oat  Co.,            995 

McNutt^j.King,  968 

V.  Strayhorn,  507 

McPherson  v.  Pemberton,  135 

V.  Rathbone,  117 

McQueWans  v.  Hamlin,  211 

McRae  v.  McKenzie,  659,  856,  945 

McSherry  v.  Brooks,  930 

McWhorter  v.  Mahan,  229 


Ixxxviii 


AMEKICAN   AUTHORITIES    CITED. 


^McWilliams    Manuf.  Co.  v.  Blun- 

dell,  551 

Maddock  v.  Astbury,  729 

Magill  V.  Merrie,  159,  179,  345 

Maginnis  v.  Crosby,  652 

!Magorem  v.  Robertson,  83 

Maier  y.  Canavan,  397 

Major  V.  Hawkes,  196 

Maltby  v.  Northwestern,  &c.  R.  R. 

Co.  280 

Manhattan  Co.  v.  Led  yard,  181 

Manhattan  Manf.  Co.  v.  Sears  109 

Mann  v.  Etna  Ins.  Co.,  206 

V.  Flannigau,  644 

v.  Higgins,  500 

V.  Locke,  355 

Manning,  re,  1072 

V.  Gasharie,  6,  308 

V.  Hayes,  181 

Manufacturer's,  &c.  Bank  v.  Gire, 

161,  234,  248 

«.  Winship,  293 

Manville  v.  Parks,  189 

Maples  V.  Geller,  488 

Marble  v.  Lypes,  56 

Mardis  v.  Shackleford,  156 

Maret  v.  Wood,  467 

Marine  Co.  v.  Carver,  219 

Markham  v.  Hazen,  331 

Markraan  v.  Buckingham,  433 

Marks  v.  Hill,  673 

V.  Sigler,  112 

V.  Stein,  14 

Marlett  ».  Scaatland,  999 

v.  Jackman,  994,  995 

Marquand  v.  New  York  Manufac- 

toring  Co.,  622,  979 

Marsh's  appeal,  647 

Marsh  v.  Bennett,  756 

«.  Gold,  211 

V.  Northwestern  Ins.  Co.,  66 

■y.  Russell,  124,  717 

V.  Thompson,  259 

V.  Thompson  National  Bank,  179, 

219 

Marshall  v.  Colman,  703,  977 

V.  Hull,  150,  432 

V.  Johnson,  530,  890 

Marston  v.  Dewbarry,  607,  610 

Martin  v.  Blanchin,  899 

v.  Davis,  420 

V.  Ehrenfels,  107 

V.  Fewell,  6 

V.  Johnson,  145 

V.  Kaffroth,  226 


Page 

Martin  «.  Kelly,  151,  434 

V.  Kirk,  358 

V.  Searles,  345 

V.  Smith,  790 

V.  Solomons,  929 

V.  Thrasher,  175 

«.  Van  Schaack,  746,  905 

1).  Walter,  369 

V.  Walton,  255,  369 

Marvin  v.  Buchanan,  288 

1).  Dutcher,  110 

Marwick,  ex  parte,  1179 

Marwick,  Matter  of,  491 

Marye  ®.  Jones,  951 

Mason  r.  Conneli,  472,  621 

V.  Denuison,  469 

v.  Eld  red,  420,  449 

V.  Hackett,  19 

«.  Tipton,  922 

V.  Wickersham,  405 

Mass  V.  IMessick,  227 

Massey  v.  Pike,  206 

Master  «.  Kirton,  978 

Mathers  v.  Patterson,  542 

Matherson  v.  Wilkinson,  487 

Mathewson  D.  Allen,  513 

V.  Clarke,  777 

Matlack  «.  James,  565,1016 

Matlock  V.  Matlock,  566 

Matot,  re,  1057,  1067 

Matteson  v.  Nathanson,  994 

Matthews  v.  Colbaru,  934 

Mauck  V.  Mauck,  566 

Maude  v.  Rodes,  776,  800 

Maudlin   v.    Branch  Bank,    182,    210, 

265,  342,  368,  369 

Mauney  v.  Coit,  358 

Maupin  v.  Daniel,  884 

Maxey  ».  Averill,  1011 

V.  Strong,  348 

Maxwell  v.  Evans,  1203 

May,  re,  1156 

Mayberry  v.  Barniton,  210 

Mayer  v.  Clark,  505,  574 

Maynard  t.  Fellows,  299 

Mayor  v.  Hawkes,  353 

Mayraut  v.  Marston,  24 

Meachem  v.  Batchelder,  180 

Mead  v.  Bank  of  Fayetteville,         1195 

V.  Shepherd,  222 

Meader  v.  Hughes,  318,  332 

V.  Malcolm,  266 

Meaghan,  Matter  of,  733 

Meatier  v.  Cox,  736 

Mechanics'  Bank,  &c.  v.  Foster,       268 


AMEEICAN   AUTHORITIES    CITED. 


Ixxxix 


Page 

Mechanics'  Bank  v.  Livingston,   188, 

367 
Mechanics'    &    Farmers'   Bank   v. 

Dakin,  148,   195 

Mechanics'  &  Traders'  Ins.  Co.  v. 

Richardson,  266 

Mecutchen  «.  Kennady,  272 

Meehan  v.  Valentine,  18,  2(5 

Meggett  V.  Finney,  355 

Melick,  ex  parte,  1071 

Melliuger  v.  Parsons,  351 

Melvin,  re,  1203 

Menagt   v.    Whitwell,  609,    1024, 

1026 

Mercantile  Bank  v.  Cox,  293 

Mercer  v.  Sayre,  355 

Merchant  v.  Belding,  169 

Mergansteen  v.  Thrift,  606 

IMeridan    Nat.  Bank  v.  Brant,  602 

Merrick  v.  Brainard,  621 

Merrill  v.  Bartlett,  72 

V.  Green,  757,  934 

V.  Rinker,  506,  609 

Merrit  «,  Pollys,  341,  346 
Memwether  v.    Hardeman,  686,   851, 

940,  942 

Mervin  v.  Playford,  20 

Meserve  ?;.  Andrews,  17,  19,  675 

Messer  v.  Messer,  568 

Metcalf  V.  Fonts,  753,  883 

v.  Officer,  27,  106,  1079 

V.  Redman,  33 

Metting  v.  Colt,         '  19 

Meyberg  v.  Steagall,  607 

Meyer  v.  Atkins,  348 

V.  Kohn  22 

Meyers  v.  Bennett,  886 

Mick  V.  Howard,  110,  260 

Mickle  V.  Peet,  942 

Miech  V.  Allen,  1018 

Mifflin  V.  Smith,  158,  285 

Miles  V.  VonDeyn,  468 

■p.  Wann,  58 

Millar  v.  Craig,  .    665 

Millard  v.  Ramsdell,  'l004 

Millaudon  v.  Sylvestre,  6(35 

M.Wlav,  ex  parte,  13,1172 

V.  Andres,  932 

V.  Bartlett,  20 

v.  Brigham,  625,  981 

i),  Cappel,  485. 

V.  Chandler,  19 

V.  Dow,  201 

V.  Estill,  004 

«.  His  Creditors,  1018 


Page 

Miller  v.  Hines, 

179 

V.  Hughes, 

179 

V.  Jones, 

820,  999 

v.  Keys, 

1055,  1061 

D.  Lord, 

669,  714 

V.  Manice, 

265 

1).  Miller, 

1026 

V.  Northern  Bank, 

309,  474 

V.  Price,                22, 

194,  461,  574 

«.  Sims, 

730 

V.  Sullivan, 

216 

Millerd  v.  Thorn, 

399 

Milliken  v.  Loring, 

358 

Mills  V.  Barber, 

162,  184 

r.  Fellows, 

644,  839 

Milne  r.  Douglass, 

489 

Miner  v.  Downer, 

291 

T.  Pierce, 

014 

Miner's  Iron  Works  v.  Davidson,    449 

Minor  t.  Gaw,  269 

M\tchc\\,  ex  2)arte,  1054 

V    Dale,  47] 

V.  Darmond,  318 

■?>.  Dobson,  396 

t\  O'Neale,  82 

V.  Read,  739 

V.  Rich,  358,  446 

V.  Wells,  933 

V.  Winslow,  1083 

Mitchum  ».  Bank  of  Ky.,  343 

Mittnight  «.  Smith,  1020 

Moale  V.  Hollins,  420 

Moderwell  v.  Mullison,  566,  567 

Modisett  v.  Lindley,  207 

IMoffat  V.  Thomson,  1001 

Moister's  appeal,  229 

Moline,  &c.  Manuf.  Co.  v.  Webster, 

1016 
Moline  Wagon  Co.  v.  Rummell,      269 

352 

Monroe  v.  Ezzell,  459 

®.  Hamilton,  981 

Montague  v.  Reakert,  348 

Moutanye  v.    Hatch,  885,  886 

Montgomery  v.  Boon,  206,  207 

Moutjoys  v.  Holden,  922 

Moody  V.  Payne,  894 

Moon  V.  Story,  542,  669 

Moore's  appeal,  104,  489 

Moore  t\  Bare,  594 

i\  Brink,  6 

V.  Burns,  433 

V.  Gano,  946 

V.  Huntington,  775 

V.  Lack  man,  348 


xc 


AMEKIOAN   AUTHORITIES   CITED. 


Page 

Moore  r.  Smith, 

29 

r.  Thieber, 

675 

1).  Walton, 

45 

Moorehead  v.  Gilmore, 

181 

Moran  v.  LeBlauc, 

927,  931 

t).  Prather, 

211 

Mords  V.  Gleason, 

625 

Morean  v.  Edwards, 

227 

Morean  r.  Saffarans, 

518 

Morehcad  r.  Wiiston, 

333 

Mores   v.    See.  for   Dest 

itute  Chil- 

dren, 

480 

Morgan  i\  OInoy, 

566 

V.  Richarsou, 

358,  446 

V.  Roberts, 

372 

V.  Skidmore, 

1020 

V.  Stearns, 

20 

V.  Watmough, 

615 

Moriarty  v.  Baily, 

272 

Morin  v.  Matin, 

939 

Moritz  ?'.  Peebles, 

924 

V.  Phelps, 

516 

Morrill  v.  Spurr, 

31 

Morris  v.  Allen, 

666,  667 

V.  Hillery, 

437 

V.  Jones, 

202,  207 

V.  Morris, 

652,  1019 

V.  Neel, 

632 

Morrison  v.  Cole, 

23 

V.  Krutz, 

1016 

V.  Perry, 

356 

V.  Smith, 

658 

V.  Stockwell, 

938 

Morrow  v.  Riley, 

931 

Morse,  re, 

1178 

V.  Bellows, 

206,  207,  209 

11.  Haijenah, 

191 

t\  Hafl, 

124,  586 

Morton  v.  Ostrom, 

560 

Mosely  y.  Garrett, 

625 

Mosgrove  i\  Golden, 

461 

Moss  V.  McCall, 

665 

V.  Riddle, 

163 

Mosseau  r.  Thebens, 

325 

Mourain  r.  Delarare, 

667 

Mowatt  i\  Rowland, 

348,  368,  370 

Mowbray  v.  Lawrence, 

894 

Moyes  v.  Brumeaux, 

113 

Mudd  V.  Bast, 

994 

Muir  p.  Leitch, 

1016 

Mullamy  v.  Keenan, 

927 

Mullendore  v.  Scott, 

759 

Mum  ford  v.  Murray, 

393,  654 

Munroe  t\  Cooper, 

266,  268 

Murdock,  ex  jxirte, 

1202 

Page 

Murdock  v.  Martin,  930 

V.  Mehlhop,  626,  720 

Murphy,  Matter  of  733 

Murphy  v.  Camden,  194 

V.  Crafts,  661 

Murray  v.  Bogert,  621,  942 

V.  Fox,  392,  413 

i\  Johnson,  32,  712 

V.  Mumford,  999 

MurrcU  v.  Murrell,  210,  530 

MurriU  B.Neil,  1016 

Musier  ?).  Trumpbour,  30 

Mutual  Bank  v.  Richardson,  266 

Myatts  V.  Bell,  357 

Myer  v.  Krohn,  371 

Myers  v.  Huggins,  361 

V.  Moulton,  228 

Mygatt  V.  McClure,  360' 

Mynderse  v.  Snook,  463 

Myrick  v.  Dame,  925 

Naglee  v.  Minturn,  951 

Nail  V.  Mclntyre,  269 

Napier  v.  Catrou,  202,  203,  207 

V.  M'Leod,  359 

National  Bank  v.  Norton,  356,  369 

i\  Sackett,  177 

V.  Thomas,  287 

Nat.  Bank  of  Commonweath  v.  Law, 

264 
National  Bank  of   Jacksonville  v. 

Mapes,  .  1 94 

Nat.  Exchange  Bank  v.  White,       188, 

288-- 
National  Union  Bank  v.  London,        6, 

179,  280- 

Nave  V.  Sturges,  707 

Neal  V.  Hassan,  354,  426 

Neil  r.  Greenleaf,  924 

Nelson,  ex  parte,  469' 

Nelson  v.  Connor,  *       616 

r.  PLiyner,  519 

V.  Hill,  488,  1011 

i\  Lloyd,  116,  470- 

Newbiggin  v.  Pillans,  97 

Newbran  r.  Snieder,  25 

Newcouiet  i\  Brontzman,  341 

Newell  V.  Humphrey,  546,  918 

V.  Smith,  179 

Newland  v.  Tate,  645 

Newman,  expurte,  1202 

V.  Bagley,  177 

V.  Bean,  18 

Newmarket  Bank  v.  Locke,  1012 

New  Orleans  v.  Gauthreauz,  2 


AMERICAN    AUTHORITIES   CITED. 


xer 


Pai,'e 
New  York  Fire  Ins.  Co.  v.  Bennett, 

259,  269 
Niagara  County  Bank  v.  Lord,         552 


Nichol  V.  Stewart, 
Nicholaus  r.  Thielges, 
Nichols  V.  Cheairs, 

V.  Hughes, 

V.  Ogden, 

V.  Prince, 

V.  Sober, 

V.   White, 
Nicholson  v.  Janeway, 

■i\  Moog, 
Nickels  v.  Mooring, 
NicoU  V.  Mumford, 
Niday  v.  Harvey, 
Niehoff  11.  Dudley, 
Niles  V.  Williams, 
Nimis,  re, 

V.  Bigelow, 
Nims  «.  Niras, 
Nixdorf  v.  Smith, 
Nixon  V.  Downey, 

V.  Nash, 
Noble  V.  M'Clinton, 
Noel  V.  Bowman, 
Noonan,  re, 

V.  McNab, 

V.  Or  ton, 
Norcross,  Matter  of, 

V.  Clark, 
Norman  v.  Huddleston, 
Normeut  v.  Johnson, 
Norris  v.  Ploward, 

®.  Vernon, 
North  V.  BIoss, 

v.  Mudge, 
North  Pa.  Coal  Co.  's  appeal. 
North  River  Bank  v.  Stewart, 
Northrup  v.  Phillips, 
Norton  ■».  Thatcher, 
Norway  v.  Rowe, 
Norwent  v.  Hull, 
Noyes  v.  New  Haven 

Co., 
Nugent  V.  Locke, 
Nusstaumer  i\  Packer, 
Nutt  V.  Hunt, 

Oakley  v.  Aspiuwall, 
Oakey  v.  Rabla, 
Oates  V.  Brown, 
O'Bannon  ■;;.  Miller, 

V.  Simrall, 
Ober  V.  Indianapolis  R.  R.  Co  ,       354 


603 

20 
280 
167 
566 
759 
275 
118 
851 
364 
353 

1016 

419 

12 

814 

1172,  1176,  1177 

292 

855 

394,  479 

172 

607 

220 

601 

1070 
721 
721 
967 
479 
847 
196,  199 
740 
573 
473 
445 
283 

1016 

784 

285 

977 

20 

R. 
199 
814 
345 
182 

170 

1016 

449 

571 

209 


&c.,  R. 


Page- 

O'Bryan  'o.  Gibbons,  904 

Ochmingcr,  re,  1067 

Odiorne  v.  Maxcy,  172,  510 

V.  Woodman,  944 

Odgeen  v.  Arnot,  339 

Odgen  V.  Gillingham,  1104 

Oflfut  r.  Scott,  998 

Ogden  V.  Astor,  999,  1002 

Oicott  V.  Wing,  656,  914 

Oliphant  v.  Mathews,  146,  293 

Oliver  v.  Gray,  80 

Olleman  i\  Regan,  631,  933 

Olmsted  v.  Hotailing,  226,  443 
Onondaga   Bank  v.    De   Puy,    190, 

191 

Ontario  Bank  v.  Hennessey,  145 

Oppenheimer  v.  Clemons,  656 

Oreilly  v.  Brady,  861,  1005 

Ormsbee  v.  Davis,  216 

Osborn  v.  McBride,  567 

Osborne  v.  Barge,  215- 

V.  Stone,  211 

Osgood  V.  Glover,  213 

Ostrom  V.  Jacobs,  173 

Otis  V.  Sill,  525 

O'Toole  V.  Gaivin,  126. 
Ottoman  Cahvcy  Company  ■».  Dane, 

149 

Overton  v.  Tozer,  446 

Owens  V.  Collins,  565 

Owings  V.  Low,  173- 

V.  Trotter,  300 

Oxley,  ex.  farte,  733 

w  WiUis,  358- 

Ozeas  V.  Tolman,  942 


Pagan  v.  Sparks, 

483 

Page  V.  Brant, 

366,  369,  471 

V.  Morse, 

94 

v.  Vaukirk, 

767,  963 

Pahlman  r.  Graves, 

1018 

V.  Taylor, 

212,  255 

Pahlmian  v.  Cranes, 

IOI9 

Paige  V.  Paige, 

554 

Paine  v.  Moore, 

928 

V.  Thatcher, 

924 

Palmer  v.  Dodge, 

354 

V   Elliott, 

300 

v.  Myers, 

177,  182 

V.  Pinkham, 

119 

V.  Scott, 

241 

v.  Stephens, 

146,  296 

V.  Tyler, 

816 

Parchen  v.  Anderson, 

40 

Pardee  «.  Markle, 

380,  937 

IJCll 


AMERICAN    AUTHORITIES   CITED. 


Page 

Parish  v.  Lewis, 

477, 

604, 

10J2 

Park  i\  Wooten, 

345 

Parker,  In  re, 

405 

V.  Bowles, 

568 

V.  Canfield, 

19,! 

J8,  44 

,405 

V.  Cousins, 

357 

V.  Gregg, 

455 

V.  Jahnson, 

475 

T.  Jonte, 

689 

883 

v.  IMuggridge, 

1173 

Parkhurst  v.  Kinsman, 

72 

,  979 

V.  Muier, 

861 

Parkin  v.  Carruthers, 

365 

Parmalee  f.  Wiggenhorn, 

382 

Parmenter  v.  Kingsley, 

760 

Parsley  v.  Ramsey, 

145 

Partiu  V.  Leitenloh, 

179 

Partridge  v.  Kingman, 

20 

Patch  V.  Wheatland, 

214 

Pate  V.  Bacon,  150,  151,  432,  434 

V.  First  Nat.  Bank,  255 

Paterson  v.  Camden,  405 

V.  Silliman,  560 

Paton  V.  Baker,  229 

V.  AVright,  183 

Patten  v.  Cunningham,  449 

V.  Gunney,  465 

V.  Karaugh,  207 

V.  Whitehead,  454 

Patterson  r.  Martin,  840 

V.  Silliman,  605 

V.  Ware,  676 

Pattison  v.  Blanchard,  18 

v.  Norris,  349 

Patton  V.  Calhoun,  649 

Payne  v.  Able,  1201 

T.  Matthews,  1018 

t.  Slate,  357 

Peacey  t.  Peacey,  756 

Peacock  v.  Cummings,  535 

V.  Peacock,  953 

Pearce  v.  Bruce,  485 

V.  Chamberlain,  984 

v.  Pearce,  666,  859 

Pearpoint  ?>.  Graham,      184,  336,  951, 

958 

Pearson  t.  Keedy,  597,  1012 

v.  Post,  101 

Tease,  re,  1176 

V.  Cole,  188 

V.  Rush,  672,  991 

Peck  V.  Fisher,  1022 

r.  Jenness,  1200 

V.  Schullze,  609 

Pecker  v.  Hall,  356 


Page 

Pecot  V.  Armelin,  562 

Pemberton  v.  Oakes,  382 

Pendleton  r.  Wambersie,  777,  822 

Penn,  Matter  of,  1070 

V.  Kearney,  213 

D.  Stone,  942 

t\  Whitehead,  94 

Penninian  v.  Jones,  781 

Pennrock  v.  Swayne,  946 

Penny  v.  Martin,  420,  472 

Peoples'  Bank  v.  Shock,  607 

People  V.  Croton  Acqueduct  Board, 

145 

V.  Judges  of  Dutchess,  209 

V.  Till.  597 

Pepper  v.  Thomas,  554 

Perkins  v.  Perkins,  841 

Perley  v.  Brown,  936 

Perman  v.  Tunno,  1026 

Perrin  v.  Keene,  354 

Perrine  i\  Hankinson,  23 

Perry  v.  Butt,  4,  111 

V.  Holloway,  580 

V.  Randolph,  114,  280 

V.  Spencer,  756 

Person  v.  Carter,  206,  207 

V.  Nelson,  575 

Peters  v.  Davis,  479 

V.  Horbach,  245 

r.  IMcWilliams,  334,  661 

Peterson  v.  Poignard,  816 

V.  Roach,  304 

Petit  V.  Chevelier  906 

Pettee  v.  Appleton,  40,  41 

V.  Orser,  181,  182 

Pettes  V.  Bloomer,  207 

Petteugill  V.  Jcnes,  927 

Pettis  V.  Atkins,  6 

Peyton  v.  Lewis,  332 

"  V.  Stratton,  201 

Pfeiffer  v.  Maltby,  138 

Pfirrman  1\  Koch,  574 

Phelan  v.  Hutchinson,  686 

Phelps,  re,  1081 

V.  Brewer,  444 

Philips  V.  Bridge,        1016,  1024,  1037 

Phillips  V.  Cork,  615 

v.  Goldtrce,  126,  434 

V.  Lockhart,  940 

V.  Nash,  32,  340 

V.  Parington,       72,  110,  172,  174 

V.  Reeder,  360,  512,  828,  860 

V.  Turner,  044 

Piatt  V.  Oliver,       203,  338,  566,   604, 

631 


AMEKIOAN    AUTHORITIES   CITED. 


XClll 


Page 

Pickels  V.  McPherson,  197 

Pickerell  v.  Fisk,  2,  69 

Pickney  v.  Kerney,  224 

Pierce  v.  Cameron,  419 

T.  Covert,  914 

V.  Cul)l)erly,  839,  881 

V.  Daniels,  662 

V.  Ham,  827 

V.  Hickenburg,  196,  199 

V.  Jackson,        182,  243,  461,  506, 

611,  612,  1016,  1024 

V.  McClellan,  512 

V.  Pass,  196,  199,  269 

V.  Tiernan,  651 

V.  Nelson,  602 

Pierson  v.  Hooker,  203,  207,  209 

V.  Steiumyer,  111,  123 

pike  r.  Bacon,  205 

V.  Douglas,  219 

Pillsbury  v.  Pillsbury,  69 

Pirn  V.  Harris,  666 

Pine  V.  Ormsbee,  157,  512 

Pinkney  v.  Hall,  270 

Pio  Pico  V.  Cuyas,  935 

Piper  V.  Smith,  568,  666 

Pitcher  v.  Barrows,  342 

Pitkin  V.  Pitkin,  1013 

Pitt,  re,  1072 

Pitts  V.  Hall,  72 

V.  Waugh,  165,  515,    547 

Place  V.  Sweetzer,  607,  609 

Piatt  V.  Halen,  462,  501 

V.  Piatt,  836 

Pleasants  v.  Fant,  13 

Ploss  v.  Thomas,  610 

Plumb,  re,  1080 

Plumer  v.  Lord,  97 

Plummer  v.  Trout,  22 

Plunkett  v.  Dillon,  15 

Poillon  V.  Secor,  60 

Polk  V.  Buchanan,  45 

V.  Oliver,  866,  369 

Pollard  V.  Stanton,  24 

Pollock  v.  Williams,  281 

Pomeroy  v.  Benton,  691 

V.  Sigerson,  29,  42 

Pond  V.  Clark,  650,  665,  667,  674 

V.  Cummins,  19 

v.  Starkweather,  304 

Ponton  V.  Dunn,  700 

Pool  V.  McDonald,  1205 

Poole  V.  Delancy,  933 

V.  Gist,  236 

V.  Hintrager,  397 

V.  Lewis,  285 


Page 

Pope  V.  Hays 

757 

V.  Randolph, 

929 

■0.  Risley, 

355, 

364, 

366 

V.  Salsman, 

818 

Popper  V.  Schieder, 

907 

Porter  t.  Cresson, 

150, 

432 

v.  Gunnison, 

265 

V.  Wheeler, 

754 

V.  Wilson, 

118 

Portland  Bank  v.  Hyde,  437 

Portsmouth  v.  Donaldson,  817 

Posey  v.  Bullitt,  207 

Pose  V.  Kimberly,  229 

Postlewaitv.  Howes,  439,  1011 

Pote  V.  Phillips,  941 

Potter  V.  Dillon,  179 

V.  Greene,  58 

r.  McCoy,  208 

V.  Moset,  994 

V.  Price,  191 

Potts  V.  Blackwell,  573,  574 

Powell  «.  Graves,  851,  931,  934 

V.  Hopson,  337,  994 

V.  Maguire,  917 

V.  Messer,  266 

V.  North,  337,  994 

Powers  V.  Powers,  1024 

Powrie  v.  Fletcher,  497 

Pratt  V.  McHatton,  123,  651,  669,  856, 

858,  899,  991 

V.  Willard,  453,  463 

Pray  v.  Morse,  512 

Prentiss  v.  Foster,  180 

V.  Kelly,  112 

V.  Sinclair,  366,  369 

Presser  v.  Henshaw,  331 

Preston  n.  Foelinger,  370 

Price  V.  Alexander,  19,  207 

V.  Gavins,  93& 

V.  Hicks,  562,  565 

V.  Hunt,  616 

V.  Towset,  342,  346 

V.  Williams,  762 

Priest  V.  Chouteau,  13 

Prince  v.  Crawford,  187 

Princeton,  &c.  Turnpike  v.  Gulick,  341. 

346 

Pringle  v.  Leverich,  58,  350 

Priutup  V.  Turner,  214 

Providence  v.  Bullock,  562 

Prudhomme  v.  Henry,  354 

Pruyn  i\  Black,  470 

Pugh  V.  Carrie,  561,  566 

Purdy  V.  Lacock,  447,  1018 

V.  Powers,  269 


XCIV 


AMEKICAN    AUTHORITIES    CITED. 


Page 
Pursley  v.  Ramsey,  107,  317,  367 

Purviance  v.  Sutherland,  282 

Pur  vines  v.  Champion,  929 

'Puvvls,  e.v  pai'te,  1081 

Putnam  v.  Dobbins,  567 

V.  Parker,  586 


QuiNCEY  V.  White, 
Quine  v.  Quine, 
Quiiicr  V.  Marblehctid, 
Quinliran  v.  English, 


107 
594 
102 

889 


Raborg  v.  Bank  of  Columbia,         491 

Radcliffe  p.  Yarner,  281 

Raiuey  v.  Nance,  1016 

Ramey  v.  McBride,  229 
Rammelsberg  v.  Mitchell,       565,  566, 

586,  748 

Ramson  r.  Pomeroy,  485 

Ramsy  v.  Deas,  247 

Randall  v.  Morrell,  890,  905 

Randell  ».  Yates,  108 

Randolph  v.  Peck,  348 

Randolph  Bank  v.  Armstrong,         162 

Rank  v.  Grote,  567 

Rankin  v,  Jones,  574 

Ransom  v.  Loyless,  368 

Ransom  v.  Yan  Deventer,  572 

Ratzer  v.  Ratzer,  594 

Ray  V.  Bogart,  785,  842 

Raymond  v.  Caine,  856 

1).  Putnam,  686,  859 

Read  v.  Nevitt,  722 

Reber  v.  Columbus,  &c.  Co.,           473 

Reboul  V.  Chalker,  33 

Redfield  v.  Middleton,  804 

Redlon  v.  Churchill,  261 

Reece  v.  Hoyt,  354,  512 

Reed,  ex  parte,  1200 

«.  Girty,  420 

V.  Johnson,  436,  826 

V.  Murphy,  19 

V.  She])ardson,  612,  1024 

r.  Wessel,  513 

Rees  V.  Simons,  453 

Reese  v.  Bradford,  505,  532,  574 

Reeves  v.  Ayres,  569 

V.  Denicke,  148 

Regester  v.  Dody,  400 

Rcid  V.  Frazer,    '  344 

r.  Vidal,  795 

Rcilly  V.  Smith,  366 

Reimsdyk  v.  Kane,  296 

Reis  V.  Hellman,  662 

Reiter  v.  Morton,  921 


Page 

Remick  v.  Ewing,  994 

Remington  v.  Cummings,  445 

Renfrow  v.  Pearce,  915 

Reno  V.  Crane,  551 
Renton  v.  Chaplain,    507,   616,   618, 

902 

Reppert  v.  Colvin,  426 

Reubiu  v.  Cohen,  220 

Reybold  v.  Dodd,  107,  644 

Reynold  v.  Austin,  970 

Reynolds  v.  Cleveland,  221,  285 

V.  Mardis,  664,  665 

V.  Pool,  24 

V.  Toppan,  20 

V.  Waller,  234,  243 

Rhea  v.  Vannoy,  535 

Rhiner  v.  S«'eet,  856 

Rhodes  v.  Williams,  776,  911 

Riarl  v.  Willhelm,  944 

Rice  V.  Austin,  18,  20,  1016,  1024 

V.  Barnard,  1020 

V.  Barrett,  55,  58 

V.  Doniphan,  448 

■V.  Richards,  486,  1006 

V.  Shumau,  510 

Rich  V.  Davis,  179 

Richards  r.  Baurman,  900,  963 

V.  Butler,  352,  366 

V.  Grinnell,  15 

«.  Hunt,  352 

V.  Todd,  804 

Richardson  v.  Bank  of  England,      683 

V.  Farmer,  165 

T.  French,  241 

«.  Fuller,  446 

V.  Hewitt,  20 

T.  Lester,  214 

V.  Moies,  356 

V.  Wyatt,  690 

Richmond  v.  Judy,  67 

Richter  v.  Poppenhausen,  1009 

V.  Sehn,  113 

Rick  V.  Neitzy,  884 

Rickey  v.  Bowns,  918 

Riddle  v.  Etting.  354 

Rider  v.  Gilbert,  594,  1016,  1025 

Ridge  V.  Alter,  449 

Ridgeley  v.  Carey,  1022 

V.  Dodson,  67 

Ridgway's  appeal,  562 

Ridgeway  v.  Grant,  713,  926 

Ridley  v.  Taylor,  266,  271,  273 

Riggs  V.  Stewart,  941 

Rimel  v.  Hayes,  273 

Ring  V.  Ham,  108 


AMERICAN   AUTHORITIES    CITED. 


XCV 


I?ingo  V.  Wing, 
Kipley  v.  Colby, 
Hippey  V.  Evans, 
Hishton  V.  Grissell, 
Risley  v.  Pope, 
Rizer  v.  James, 
Roach  V.  Periy, 
Roache  r.  Pondergast, 
Robb  V.  Mudge, 

V.  Stevens, 
Robbins  v.  Fuller, 

V.  Laswell, 
Robert  v.  McCarty, 
Roberts  v.  At  wood, 

t\  Johnson, 

V.  Kelsey, 

V.  Law, 

V.  McKee, 

V.  Oldham, 

V.  Ripley, 

V.  Strang, 

V.  Totten, 
Robertshaw  v.  Hanway, 
Robertson  v.  Baker, 

V.  Miller, 

t\  Read, 
Robinson  v.  Aldridge, 

V.  Crowder, 

i\  Davidson, 

V.  GilfiUan, 

V.  Green,', 

V.  Gregory, 

V.  Magarity, 

V.  Thompson, 
Hobius  «.  Warde, 
Rochester  v.  Trotter, 
Rockwell  v.  Wilder, 
Roddin,  re, 
Rodes  V.  Rodes, 
Roe  V.  Galliers, 
Roger  V.  Nichols, 
Rogers,  e.v  parte, 

r.  Batclielor, 

V.  Kichline, 

V.  Merander, 

V.  Nichols, 

V.  Ressiuer, 

r.  Rogers, 
Rohr  «.  Pearson, 
Rolfe  V.  Dudley, 
Rollins  i\  Stevens, 
Rolston  V.  Click, 
Roney  v.  Buckland, 
Roop  V.  Rogers, 
Roosvelt  T.  McDowell, 


Page 
327,  331 

Root  T.  Stevenson, 

Page 
943 

105 

Rootes  r.  Wellford, 

360 

105 

Rose  V.  Baker, 

192 

666 

T.  Roberts, 

759 

366 

Rosenberg  v.  Block, 

105 

106 

Rosenfield  v.  Haight, 

45 

594,  644,  645 

Ross  V.  Cornell, 

729 

956 

V.  Everitt, 

450 

348,  574 

V.  Henderson, 

560 

1023 

v.  Howell, 

447 

353 

®.  West, 

926 

158 

V.  Wigg, 

126 

563 

Roth  V.  Colvin, 

179 

454 

V.  Moore, 

221,  285 

233 

Rothell  V.  Grimes, 

1025 

817,  994 

Rothwell  i\  Dewees, 

488,  774 

1000 

Rouillicr  v.  Wernicki, 

97 

512,  870 

Rowand  r.  Eraser, 

565 

1029 

Rowland  v.  Boozer, 

935 

945 

V.  Miller, 

860 

393 

Rowley  v.  Stoddard, 

391 

255,  661 

Royster  r.  Johnson, 

648 

488,  586 

Ruckle,  ex  jxirte. 

1157 

560,  605 

Ruckmau  v.  Decker, 

546 

706 

Ruddick  v.  Otis, 

22 

683 

RuflBu,  ex  2)arte, 

597 

265 

Ruffner  v.  Hewitt, 

353 

184 

V.  McConnell, 

209 

799 
708,  947 

Rugely  V.  Gill, 
Ruhe  V.  Burnell, 

455 
111 

104,  923,  942 
177 

Rush  V.  Thompson, 
Russel  V.  Leland, 

226 
216 

146 

Russell,  ex  imrte, 

1155 

486,  1009 

V.  Annable, 

209 

112 

V.  Byron, 

818 

163 

v.  Green, 

199,  670 

933 

V.  Grimes, 

936 

1143 

V.  Leland, 

387,  981 

650 

V.  Miller, 

562 

733 
979 

V.  Minnesota  Outfit, 
V.  Swan, 

944 
443 

1059 

Rust  V.  Chisolm, 

561 

269,  272 

'V.  Hauslet, 

266 

459 

Rut  ledge  v.  Squires, 

170,  266 

1018 

Ryersou  v.  Heudrie, 

468 

70,  894 

Ryhiner  v.  Feickert, 

147 

326 

437,  946 

Sage  v.  Chollar, 

754 

860,  862 
195 

Sager  v.  Tupper,        111, 

117,    309, 

497 

210 

Salemon  v.  Shinner, 

645 

211 

Salmon  v.  Davis, 

195 

192,  232 

Saloy  V.  Albrecht, 

605,  981 

1025 

Salter  v.  Ham, 

12,  841 

485 

Saltmarsh  v.  Bower, 

168,  190 

XCVl 


AMERICAN    AUTHORITIES   CITED. 


Page 

Sampson  v.  Shaw,  123,  485 

Sanborn  v.  Stark,  182 

Sanders  v.  Ruddle,  222 

V.  Ward,  197 
Sanderson  v.  Milton  Stage  Co.,  336,  953 

Saiidilands  v.  Marsh,  212 

Sanger  v.  Overmier,  480 

Sangford  v.  Mickles,  357 

Sangston  v.  Hack,  19 
Sankey  v.  Columbus  Iron  Works,     19 

San  Jos6  Indiano,  The,  146,  529 
Sanquoit  Silk  Manuf.  Co.'s  appeal,   62 

Sauthoir,  re,  988 

Sargent  v.  Collins,  106,  290 

SaulTey  v.  Howard,  280 

Saul  V.  Kruger,  443 

Saunders  v.  Bartlett,  607 

V.  Duval,  882,  883 

V.  Wilder,  488 

Sauntry  v.  Dunlap,  269,  626 

Savage  t.  Carter,  650 

V.  Putman,  398,  631 

Savery  v.  Thurston,  657 

Saxton  V.  Lamb,  710 

Sayer  v.  Bennet,  965,  970,  984 

Saylor  v.  Mockbee,  897 

Sayre  v.  Peck,  849 

Schackel  ford  V.  Clark,  1012 

Schackleford  v.  Schackleford,  571 

SchaefEer  v.  Fithian,  1019 

V.  Fowler,  69 

Schallenberger  r.  Seldowridge,  66 

Schalter  v.  AVinpenny,  343 

Schatzell  v.  Bolton,  611 

Scheuke  v.  Dana,  648 
Schermerhorn  v.  Schermerhorn,       211 

Schieffelin  v.  Stevens,  366 

Schields  v.  Fuller,  585 

^chink,  ex  parte,  105b 

Schlater  v.  Winpenny,  148 

Schmidlapp  v.  Currie,  574 

Schneider  v.  Sausom,  228 

Schu(i\)f,  ex  parte,  1200 

Schofield,  ex  parte,  1202 
Scholefield  v.  Eichelberger,      337,  994 

Schonenian  v.  Fegley,  360 

Schuchardt,  //i.  re,  251 

Schurren  r.  Davis,  342 

Schwabacker  v.  Riddle,  232,  251,  277 

Schwindler  v.  Euell,  394 

Scott  t\  Bandy.  167 

«.  Blood,  106 

V.  Bogart,  448 

V.  Bryan,  652 

V.  BuflForn,  1000 


Scott  V.  Campbell, 
V.  Colmesnil, 

-    Page- 

14,  932 

845,  420 

V.  Lalor, 

826 

V.  McKinney, 
V.  Pinkerton, 

54r 
856 

V.  Scott, 

774 

T.  Searles, 

823 

V.  Shepard, 

224 

V.  Shipherd, 
V.  Trent, 

356 
195 

V.  Tupper, 
Scovill  V.  Kinsley, 

1000- 
627 

Scroggs  V.  Cunningham, 
Scruggs  i\  Blair, 

668 
566,  567 

V.  Russell, 

102,  515 

Scudder  v.  Delashmut, 

1026 

Scull's  appeal. 
Seaman  v.  Johnson, 

62 
928 

V.  Waddington, 

982 

Seawell  v.  Payne, 

214,  813 

Secor  V.  Keller, 

459 

Sedan  v.  Williams, 

419,  604,  756 

Seekell  v.  Fletcher, 

105. 

Seeley  r.  Scheuck, 

150,  432 

Seegel  v.  Chidsey, 

304 

Seighortner  v.  Weissenborn,     942,  964 

Sailer  v.  Brenner,  568^ 

Seitz  V.  buffum,  434 
Selden   v.    Bank   of   Commerce,    169, 

210 
Seldner    v.    Mount    Jackson    Nat. 

Bank,  182 

Sellers  v.  Streator,  497 

Sells  v.  Hubbell,  631 

Sewell  V.  Humphrey,  817^ 

Sexton  V.  Sexton,  520 

Seymour,  ex  parte,  1200 

Shaaber  v.  Bushong,  211 

Shackleford  v.  Shackleford,  883 

V.  Smith,  55 

Shad  «.  Fuller,  896 

Shafer  v.  Randolph,  65.' 

Shaffer  v.  Snyder,  342 

Schalck  V.  Harmon,  580 

Shalter  r.  Caldwell,  948 

Shamburg  v.  Ruggles,  366 

Shanahau.  re,  1108 

Shannon  v.  Wright,  887 

Shapard  v.  Lightfoot,  448- 

Sharp  V.  Hibbirs,  255 

Sharpe  v.  Johnson,  158' 

Shattuck  r.  Lawson,  939 

Shaw  V.  Knowles  1012. 

V.  McDonald,  270' 

V.  Pratt,  39  L 


AMERICAN    AUTHORITIES   CITED. 


XCVU 


Shearer  v.  Shearer, 

Page 
914,  999 

Shearman  v.  Hart, 

739 

Shedd  V.  Bank, 

445 

V.  Wilson, 

1018 

Sheiffer,  ex  parte, 

1081 

Sheldon  v.  Smith, 

177 

Shelly  v.  Hiatt, 

648 

Shelton  v.  Cocke, 

355 

Shenk's  appeal, 
Shepard,  ex  parte, 
Shepard,  Matter  of. 

396 

1084,  1091 

1071 

V.  Pratt, 

19 

V.  Ward, 

196,  455 

Shepherd,  Matter  of, 

v.  Boggs, 

V.  Frys, 
SherriflFv.  Wilks, 

981 

747,  817 

453 

211 

Sherman  v.  Kelton, 

117 

Sherwood  v.  Marwick, 

243 

V.  Snow, 

299 

V.  St.  Paul,  &c.  R.  R.  Co.,        561 

Shiddell  v.  Messick,  676 

Shields  V.  Fuller,  1001 

Shipley  v.  Kenton,             *  229 

Shipwith  V.  Lea,  586 

Shirley  v.  Fearne,  206 

ShirreffB.  Wilks,  270,  273 
Shoemaker  Piano  Co.  v.  Bernard,  333, 

883 

Shorter  v.  Highlower,  332 

Shotwell  V.  Miller,  390 

Shouse,  ex  parte,  1064 

Shropshire  v.  Russell,  522,  580 

V.  Shepperd,  19 

Shufeldt  V.  Seymour.  467 

Shulte  V.  Hoffman,  905 

Shurlds  «.  Tilson,  369 

Shutts  «.  Chaffee,  436 

Skannel  v.  Taylor,  306,  405 

Skinner  v.  Bedell,  583 

V.  Dayton,  7,  716 

V.  Tinker,  157 

Skipp  V.  Harwood,  612,  614 

Skipwith  V.  Lea,  999 

Sibley  v.  Young,  284 

Siegel  V.  Chisdey,  339, 966 

Siegfried  v.  Ludwig,  358 

Sigler  V.  Knox  Co.  Bank,  574 

Sigourney  v.  Munn,  565,  912 

Sigsby  V.  Willis,  1070 

Sikes  V.  Work,  68,  931 

Silvers  v.  Foster,  469 

Silverthorn  v.  Brands,  654 

Simmons  v.  Curtis,  339,  981 

Simonds  v.  Strong,  345 

G 


Simonton  v.  Poucher, 
Simonton  v.  McLain, 
Simpson  v.  Seltz, 

V.  Geddes, 

v.  Leech, 

V.  Schulte, 
Simrall  v.  O'Bannons, 
Sims  V.  Brutton, 

V.  Smith, 
Simson  v.  Ingham, 
Sinclair  v.  Wood, 
Sindh  V.  Crowle}', 
Sinklen  v.  Lambert, 
Sitler  D.  Walker, 
Slade  V.  Paschal, 
Slatter  v.  Caroll, 
Slee  V.  Bloom, 


Page 
855 

822 
665 
452 

581 
474 
650 
243 
199,  264,  360 
383 
106 
191 
222 
607,  617 
25,  118 
1011 
163 
Sleech's  Case,in  Devaynes  v.  Noble, 404 
Slenimer's  appeal,  567 

Sloan  V.  Moore,  183,  886 

Slocum  V.  Hooker,  469 

Sloo  V.  State  Bank,  446 

Smith  v.  Andrews,  27 

V.  Babcock,  1200 

«.  Baker,  1016,  1024 

V.  Black,  420,  447 

V.  Blatchford,  434 

V.  Bodine,  20 

v.  Bryson,  775 

V.  Canfield,  150,  432 

V.  Collins,  188,  190 

V.  Cooper,  744 

V.  Crooker,  464 

V.  Danvers,  676 

■B.  Davis,  453 

v.  Edwards,  .  604 

v.  Gregg,  434 

V.  Griffith,  106 

V.  Hall,  218 

V.  Hill,  168,  509 

V.  Hoffman,  287 

V.  Hollister,  104 

V.  Hunt,  453 

V.  Jackman,  369 

V.  Jackson,  369,  554,  566 

v.  Kerr,  205,  206 

V.  Loring,  659 

V.  Lowe,  899,  903 

V.  Ludlow,  426 

V.  Lusher,  260 

v.  Mallory,  1016 

v.  Mulock,  157,  953 

V.  Perry,  19 

V.  Peters,  409 

V.  Ramsey,  516 


XCVlll 


AMERICAN    AUTHORITIES    CITED. 


Page 

Smith  V.  Reddell, 

925 

V.  Riddle, 

713 

v.  Sheldon, 

348 

V.  Sloan, 

187 

V.  Smith, 

809, 

926,  942 

V.  Stone, 

209 

v.  Summerlin, 

15 

V.  Tarlcton,         102, 

108, 

565,  693 

V.  Vanderburg, 

342,  724 

V.  Wilson, 

78 

V.  Wright, 

14 

Smyth  ^1.  Harvie, 

156, 

236,  372 

V.  Strader, 

269 

Snead  v.  Barringer, 

287 

Sneed  v.  Kelly, 

171 

Snell  V.  Atlantic,  &c.  Co 

285 

V.  Crowe, 

614 

V.  DeLand, 

15,  66 

Sniffer  v.  Lass, 

1016 

Snodgrass's  appeal. 

1026 

V.  Broadwell, 

106,  436 

Snow  V.  Howard, 

474 

Snyder  v.  Burnham, 

15 

«.  May, 

202,  207 

Solom  V.  Kirk  wood, 

369 

Soloman,  ex  parte, 

1202 

Solomon  V.  Fitzgerald, 

ICOl 

«.  Solomon,             4, 

123, 

276,  515 

Soule  V.  Hayward, 

14 

Southard  v.  Lewis,  - 

488 

V.  Steele, 

175 

Southern  «.  Grim, 

342 

Southern   White  Lead 

Co. 

V.  Haas, 

33 

South  Fork  Canal  v.  Gerdon,  225 

Southmayd's  appeal,  514 

Southwick  V.  Allen,  957 

V.  McGovern,  342 
Spann  v.  Fox,                          842,  1003 

V.  Nance,  748,  895 

Spearman  v.  Keim,  94 

Speake  v.  Barrett,  343 

V.  Prewitt,  459 

V.  White,  355 

Spear  «.  Crawford,  110 

V.  Newell,  817 

Spears  v.  Toland,  37,  342 

Speer  v.  Bishop,  352 

Sprague  v.  Ainsworth,  180 

Springer  v.  Cabell,  942 

V.  Shirley,  405 

Sproat  V.  Porter,  67 

Sprout  V.  Crowley,  924 

Spurck  ».  Leonard,  212 

Staats  v.  Bristow,  581 


Page 

Staats  V.  Hewlett, 

748 

Stafford  v.  Fargo, 

542,  934 

V.  Gold, 

584,  946 

Stage  «.  Gorich, 

886 

Stainer  v.  Tysen, 

265 

Stalhert  v.  Knox, 

941 

Stall  v.  Catskill  Bank, 

182 

Stanhope  v.  Seeplee, 

1001 

Stannard  v.  Smith, 

287 

Stanton  v.  Lewis, 

990 

Stauwood  V.  Owen, 

1033 

Stapleton  v.  King, 

15 

Stark  V.  Corey, 

192 

■y.  Noble, 

740 

Starke  v.  Kenan, 

479 

Starr  v.  Case, 

709,  999 

Star  Wagon  Co.  v.  Sweeze, 

363 

State  ».  Baldwin, 

847,  881 

V.  Brown. 

394 

V.  Donnelly, 

20 

V.  Quick, 

979 

V.  Thomas, 

574 

V.  Wiggiu, 

111 

State,  &c.  Bank  v.  Thompson,         181 

Stead  V.  Salt,  176 

Stearns  v.  Burnham,  349 

Stebbins  v.  Harmon,  835 

Steel  V.  Jennings,  190,  191 

Stegall  V.  Coney,  167,  228,  258 

Stein  V.  La  Dow,  177 

V.  Robertson,  94,  594  838 

Steinhart  v.  Fyhrie,  269 

Stenburh  v.  Callanan,  332,  480 

Stephens  «.  Orman,  512,  850 

Stephenson  v.  Cornell,  55 

Sterne  v.  Goep,  363 

Stettheimer  v.  Stettheimer,  470 

Stevens,  re,  1057 

V.  Baker,  943 

V.  Bank  of  Central  New  York, 

446,  1024 

V.  Faucet,  12,  233 

V.  Lunt,  455 

v.  Rollins,  490 

t>.  Yeatman,  686,  858,  986 

Stevenson  v.  Jackson,  1193 

V.  Mathers,  820 

Stewart  v.  Burkholter,  817 

V.  Caldwell,  304 

V.  Rogers,  395 

V.  Ruggles,  366 

V.  Slater,  573 

v.  Sonneborn,  366,  368 

Stidger  0.  Reynolds,  659,  716 

Stiernermann  v.  Cowing,  360 


AMERICAN   AUTHOEITIES    CITED. 


XCIX 


Stiles  V.  Meyer, 
Stillwell  V.  Gray, 
Stimpson  v.  Green, 
Stimson  v.  Lewis, 
Stitt  V.  Cass, 
St.  John  V.  Holmes, 


Page 
321 
28-i 
21 
720,  956 
392,  756 
446 
St.  Louis  Type  Foundry  Co.  v.  Wis- 

doD,  384 

St.  Nicholas  Nat.  Bank  v.  Savery,  257 
Stoallings  v.  Baker.  29 

Stockdale  v.  UUery,  890 

Stockton  V.  Frey,  231 

Stockwell  V.  Dillingham,  251 

V.  United  States,  232 

Stoddard  «.  Wood,  934 

Stoddart  v.  Key,  126 

Stokes  V.  Stevens,  229,  506 

Stone  V.  Chamberlain,  399 

V.  Fouse,  924,  942 

Stever©.  Hinkley,  161,  179,  413,  815, 

1012 

Story  V.  Moon,  905 

«.  Barrel!,  174 

Stoughton  V.  Lynch,    615,    522,   565, 

632,  669,  670,  715 

Stout  V.  Fortner,  776,  887 

V.  Seabrook,  842 

V.  Zulick,  7 

Stoutenburgh  v.  Vandenburugh,      447 

Stowers,  re,  1070 

Strange  v.  Graham,  586 

Strangford  r.  Green,  176 

Strauss  v.  Waldo,  467 

Strecher  i\  Iron,  347 

Street  v.  Rigby.  761 

Straffin  v.  Newell,  209 

Stroman  v.  Yarn,  214 

Strong  V.  Laker,  883 

V.  Clawson,  814 

V.  Fish,  201 

V.  nines,  450 

V.  Niles,  308 

v.  Place,  33 

Studwell  V.  Shapter,  94 

Stumpt  V.  Boaur,  545 

Sturges  V.  Swift,  933 

Succession  of  Arick,  223 

Succession  of  Beer,  1017 

Succession  of  Harris,  657 

Succession  of  Powell,  944 

Sullivan  v.  Smith,  177 

Summay  v .  Patton,  568 

Surtell  V.  Brailsford,  97 

Sutton  V.  Dillaye,  355 

V.  Irwine,  210 


Sutton  V.  Mandeville, 
Swaiis  V.  Coverdill, 
Swallow,  The, 
Swan  v.  Stedman, 
Swann  v.  Sanborn, 
Sweeney  v.  Neeley, 

V.  Stanford, 
Sweet  V.  Bradley, 

V.  Morrison, 

V.  Taylor, 
Sweetser  v.  French, 
Swift  V.  Dean, 
Switzer  v.  Smith, 
Swords  V.  Owen, 
Sylverstein  v.  Atkinson, 
Sylvester  v.  Smith, 


Page 

883 

461,  532 

7,  15 

205,  206 

45,  60 

861 

432 

226 

509 

943 

210 

520 

1017 

125 

149,  280 

222,  443,  459 


Tabb  v.  Gist,  110,  254,  342,  621 

Taft  V.  Buffum,  979 

V.  Schwamb,  559 

Taggart  v.  Phelps,  345 

Tait  V.  Murphy,  608 

Tallmadge  t.  Penoyer,  ,          245 

Tarns  V.  Hitner,  55 

Tanner  v.  Hall,  259 

Tapley  v.  Butterfield,       214,  216,  282 

Tappan  v.  Blaisdell,       506,  609,  1025 

Tapping  v.  Paddock,  665 

Tarleton  v.  Herbert,  432 

Tassey  i\  Church,  173,  438 

Tay  V.  Ladd,  276 

Tayloe  v.  Bush,  23 

Taylor  v.  Bass,  497 

V.  Bennis,  910 

V.  Bothin,  990 

V.  Castle,  994 

V.  Cawthorne,  662,  975 

V.  Coffing,  708 

V.  Coryell,  176 

V.  Fields,  612,  613 

V.  Hancock,  318 

V.  Henderson,  470 

V.  Herring,  883 

V.  Hill,  348 

V.  Hillyer,  265,  355 

V.  Hutchinson,  866 

V.  Jones,  232 

V.  Penny.  31,  621 

V.  Smith,  912,  944 

V.  Sotolingo,  19 

V.  Taylor,  222,  344,  585,  708 

V.  Young,  343,  666,  668 

Tebbetts,  e.v  parte,  1200 

«.  Dearborn,  522 

Teller  v.  Muir,  468 


AMERICAN   AUTHORITIES   CITED. 


Teller  v.  Patten, 

V.  Wetherell, 
Temple,  re, 

V.  Seaver, 
Tenney  v.  Foote, 

V.  Johson, 

V.  Simpson, 
Terry  v.  Butler, 

V.  Carter, 
Terrell  v.  Goddard, 
Terrill  r.  Richards, 
Thayer  v.  Augustine, 

V.  Barney, 

V.  Lane, 

V.  Smith, 
Theall  v.  Lacey, 
Third  Bank  v.  Snyder, 
Thomas,  In  re, 

V.  Lusk, 

v.  Miles, 

V.  Moore, 

V.  Pennich, 

V.  Stetson, 

V.  Wolcott, 
Thompson's  Estate, 
Thompson  v.  Egbert. 

V.  First  Nat.  Bank, 

V.  Faist, 

V.  Hale, 

V.  Howard, 

V.  Lewis, 

V.  Lowe, 

V.  Mylne, 

V.  Percival, 

V.  Steamboat  Morton, 

V.  Walker, 
Thomson  v.  Thomson, 
Thorn  r.  Smith, 
Thorndike  t.  De  Wolf, 
Thorne  v.  Fox, 
Thornton  r.  Kerr, 

t\  Bussey, 
Thrall  v.  Seward, 
Thurston  v.  Fairman, 

D.  Lloyd, 

V.  Perkins, 
Tibbatts  v.  Tibbatts, 
Tick  r.  Mulholland, 
Tiernan  v.  Doran, 
Tiffany  v.  Crawford, 
Tilford  V.  Ramsey, 
Tillier  v.  Whitehead, 
Tilliughast  v.  Chaniplin, 
Tilotson  V.  Tilotson, 
Tindall  v.  Bright, 


Page 

Page- 

117 

Tindall  v.  Mclntyre, 

881 

487,  584 

Tipton  V.  Nance, 

934 

1070,  1079 

Todd  V.  Lorah, 

199 

357 

v.  Rafferty, 

515,  843 

234 

Tolan  V.  Can-, 

516 

573 

Tom  V.  Goodrich, 

282,  584,  937 

517,  821 

Tombeckbee  Bank  «.  Dumell,          356 

1016 

Tomlin  v.  Goldsmith, 

120 

920 

Tomlinson  v.  Burke, 

150 

904 

V.  Hammond, 

626 

103 

V.  Ward, 

511,  855 

23 

Tompkins  v.  Lee, 

102 

518 

v.  Tompkins, 

413,  1036 

567 

V.  Woryard, 

266 

300 

Tonkin,  ex  f'tTte, 

1156 

689 

Toof  V.  Duncan, 

163 

188 

Toombs  V.  Hill, 

1016 

299 

Topliff  «.  Jackson, 

759 

616 

Torrey  v.  Baxter, 

356 

740 

Touue,  re, 

1204 

119,  120 

Tower,  ex  parte, 

1061 

199 

Towle  V.  Meserve, 

936 

269 

V.  Pierce, 

818 

117 

Town  V.  Hendee, 

169 

169 

Towne  v.  Leach, 

612 

561 

Townsend  v.  Bogart, 

234 

56 

Townsends  i;.  Stevenson 

405- 

617 

Tracy  v.  McManus, 

111 

269 

Traphagen  v.  Burt, 

102 

168,  474 

Traverse.  Crane, 

147 

610 

Travis  v.  Tobias, 

486 

817 

Treadwell  v.  Brown, 

610,  1016 

694 

V.  Wells, 

369 

404 

V.  Williams, 

208,  568 

945 

Trimble  v.  Coons, 

202,  207 

847 

Troat,  ex  parte, 

1150 

775 

Trott  V.  Irish, 

462 

172 

Trowbridge  v.  Sanger, 

468 

72 

V.  Scudder, 

78 

470 

Troy,  «fcc.  Factory  v.  Corning,    715, 

108 

926 

1016 

Troy    Iron    and    Nail 

Factory  n. 

283 

Winslow, 

585,  1012 

124 

Truesdell  o.  Baker, 

724,  955 

179 

Trump  I'.  Baltzell, 

646 

842,  346 

Tucker?;.  Oxley,           310,  1163.  1176 

24 

V.  Peaslee, 

221,  285,  934 

173 

Tudarman  v.  Newball, 

390 

455 

Tudor  v.  White 

866 

1029 

Turbeville  v.  Ryan, 

206,  207,  209 

182,  301 

Turk  V.  Nicholson, 

373 

171,  280 

Turnbow  v.  Broach, 

403 

571,  573 

Turner  v.  Bisscll, 

19 

999 

-0.  Burkinshaw, 

666 

437 

v.  Mcllhaney, 

106 

AMERICAN    AUTHOEITIES    CITED. 


CI 


Turner  v.  Ross, 
V.  Turner, 
Turnipseed  v.  Goodwin, 

Tutt  V.  Adams 

V.  Land, 
Tuttle  v.  Cooper, 

V.  Eskridge, 
Tweed  v.  Lowe, 
Tynberg  v.  Cohen, 
Tyner  v.  Stoops, 
Tyng  V.  Thayer, 
Tyrell  v.  Washburn, 


Page 

428 

664 

594,  673, 

925,  9T4 

181,  259 

667,  675 

469 

213 

109 

472 

405,  512 

856,  866 

110 


Uhl  v.  Biugaman,  364 

V.  Harvey,  120,  364 

Uhler  V.  Browning,  272 

v.  Sample,  511,  565,  603 

TJlerg  V.  Ginrich,  188 

Umburger  v.  Plume,  395 

Union,  &c.  Bank  of  Memphis  v.  Day, 

304 

Union  Bank  v.  Eaton,  266 

V.  Hall,  857 

Union  Nat.  Bank  v.  Bank  of  Com- 
merce, 1016 

Union    Nat.    Bank   of   Hahway   v. 
Underbill,  258 

United  States  v.  Astley,  207,  225 

V.  Duncan,  1022 

V.  Hack,  581 

V.  King,  1200 

V.  Lewis,  1157 

V.  McGinnis,  233 

f}.  Thomason,  233 

V.  Thompson,  390 

V.  Williams  506,  609,  616 

United  States  Bank  v.  Binney,  27, 

162,  293,  698,  883 

United  States  Express  Co.  v.  Bed- 


bury, 
UpdegrafE  t.  Rowland, 

433 
572 

Updike  V.  Doyle, 
Upham  V.  Hewitt, 
Upson  v.  Arnold, 
Urquhart  v.  Powell, 
Utley  V.  Smith, 

331 

,  824 

42 

570 

264 

648 

Vaccaro  y.  Toof, 

348 

Vallandingham  r.  Duval, 

469 

Valentine  v.  Hickle, 

546 

Taiice  t.  Blair, 

917 

T.  Campbell, 
V.  Cowing, 

489, 

258 
1012 

i).  Funk, 

118 

Page 
188 
490 
195 
18 

1070 

247 

355 

16 

1026 
352 
616 
746,  862 
470 
426 


611 


Van  Brunt  v.  Mather, 
Vandenheuvil  v.  Storrs, 
Vauderburg  v.  Bassett, 

V.  Hull, 
Vanderhoef,  re, 
Vanderwick  v.  Summerl, 
Vandes  v.  Lefavor, 
Vandewater  v.  Mills, 
Vandike's  appeal. 
Van  Doren  v.  Ilorton, 
Vanduzer  v.  McMillan, 
Van  Dyke  v.  Jackson, 
Van  Eps  v.  Dillaye, 
Van  Keuren  «.  Parmalee, 
Van  Kuren  v.  Trenton,  &c.  Co.,    889, 

906 

Van  Nees  v.  Fisher,  707,  967 

Van  Ness  v.  Forrest,  933 

V.  Van  Ness,  691 

Van  Reimsdyke  v.  Kane,  489 

Van  Rensselaer  v.  Emery,  902 

Van  Rossum  v.  Walker,  1017 

Van  Scoter  v.  Lefferts,  228 

Vansyckle  v.  Rorback,  95 

Van  Valen  v.  Russell,  507 

Van  Valkenburg  v.  Bradley,  356 

Van  Wagner  v.  Chapman,  101.6 

Varnell  «.  Anderson,  405 

Varnum  «.  Campbell,  467 

Vassar  v.  Camp,  17 

Venable  -».  Levick,  167,  222 

Vere,  exiiarte^  733 

Vernon  r.  Manhattan  Co,  366 

Veyer  v.  Thornburgh,  1012 

Vienne  «.  Harris,  169 

Viles  t.  Bangs,  276 

Villa  ®.  Joute,  108 

Vinal  ■».  Burrill,  355 

V.  West  Virginia  Oil  Co.,  460 

Voorhees  v.  Jones,  19 

Voorhis  v.  Child,  1011 

Vosper  «.  Kramer,  604 

Vuillamy  v.  Noble,  995 

Waddwell  t.  Haight,  366 

Wade  v.  Rusher,  781,  931 

Wadley  t.  Jones,  855 

Wadsworth  v.  Manning,  17,  924 

Waggoner  t.  Gray,  665,  780 

Wagner  ».  Fresche,  191 

«.  Simmons,  188 

t.  Wagner,  847 

Wagnor  v.  Clay,  179,  266 

Wait,  Matter  of,  613 

Wait  r.  Brewster,  351,  370 


Cll 


AMERICAN   AUTHORITIES    CITED. 


Waite  V.  Dodge, 

27, 

459 

V.  Foster, 

357 

Wakeman  v.  Hoyt, 

1061 

Walcott  V.  Carfield, 

168 

"Waldeck  v.  Brande, 

367 

Walden  v.  Sherburne, 

172 

Waldo  Bank  v.  Greeley, 

179 

V.  Lumbert, 

179 

Waldron  v.  Simmons, 

485 

Walgamood  v.  Kandolph, 

453 

Walkcnshaw  r.  Perzel, 

779 

Walker  v.  Clark, 

448 

V.  Galbrath, 

486 

V.  Goodrich, 

loo 

372 

V.  McCulloch, 

390 

V.  Wait, 

945, 

994 

V.  Whipple, 

159 

Wallace,  re, 

437 

V.  Berger, 

118 

V.  Fitzsimmons, 

486, 

1006 

V.  Hull, 

923 

V.  Rippon, 

97 

V.  Robinson, 

817 

V.  Yeager, 

258 

Waller  v.  Davis, 

398 

V.  Keyes, 

301 

Wall  is  V.  Wheelock, 

124 

Walmsley  v.  Mendelsohn, 

817 

Walpole  V  Renfroe, 

659 

Walsh  V.  Cane, 

426 

V.  Lennon, 

284 

Walstrom  «.  Hopkins, 

398 

Walton  V.  Fosten, 

206 

V.  Walton, 

1160 

Walworth  «.  Henderson, 

179 

.  187 

Wamsley  v.  Lindenberger, 

469 

Warbritton  v.  Cameron, 

923 

Ward,  re, 

45 

V.  Barber, 

354 

,444 

V.  Bodeman, 

72 

V.  Brigham, 

8 

V.  Gore, 

945 

V.  Howell, 

355 

426 

V.  Leviston, 

500 

V.  Thompson, 

16,  32 

v.  Woodburn, 

572 

Warder  v.  Newdigate, 

497 

Wardwell  v.  Haight, 

366 

Ware  v.  Owens, 

562 

Waring  v.  Waring, 

836 

,  909 

Warner,  re, 

66, 

1073 

Warren,  re. 

65, 

1016 

V.  Ball, 

345 

V.  Chambers, 

467 

V.  Farmer, 

626, 

1018 

Page 

Warreu  t>.  French,  275- 

T.  Schainwald,  522. 

WaiYen  v.  Wheelock,  918 

Warren  Davies,  ex  parte,  1173 
Washburn    v.    Bank    of    Bellows 

Falls,  1016 

v.  Goodman,  309,  995 

v.  Washburn,  518,  815 

Wass  V.  Atwater,  20 

Waterbury  v.  Express  Co.,  535 

Waterman  v.  Dutton,  219' 

V.  Hunt,  1168 


Waters  v.  Taylor, 


Watkindon  v.  Bank  of  Pa., 
Watney  v.  Wells, 
Watson  V.  Fletcher, 

V.  Miller, 
Watt  V.  Kirby, 
Waugh  v.  Mitchell, 
Wayde  v.  Rusher, 
AVeaver  r.  Ashcroft, 

V.  Tapscott, 

V.  Upton, 

V.  Weaver, 
Webb,  re, 
Webb  V.  Helion, 

V.  Leggett, 
Weber  v.  Defor, 
Webster  v.  Webster, 
Weddle  v.  Stone, 
AVeed  «.  Richardson, 
Weeks  t.  Mascoma  Rake  Co., 
Weiman  v.  Anderson, 
AVeld  «.  Peters, 
Weldon  v.  Beckel, 
AYelkei"  v.  Wallace, 
Welles  V.  March, 
Wellington  v.  Mcintosh, 
Wells  V.  Atwater, 

«.  Babcock, 

V.  Carpenter, 

V.  Evans, 

V.  Mitchell, 

V.  Strange, 

«.  AYilson, 
Welsh  r.  Speakman, 
Wentworth  v.  Raignel, 
AVescott  V.  Price, 
West  V.  Chosten, 

V.  Hickory  Mining  Assoc 

«.  Randall, 

V.  Skipp, 
Westcott  V.  Tyson, 
AVestern  Stage  Co. 
AA'eston  v.  Barton, 


•  612,  964,  977 


69 
665 

138,  643 

486 

222 

477,  569,  777 

602 

574,  607 

283 

646 

438,  1019 

1176,  ll7r 

776 


19 

760 
996^ 
999 
265 
214 
97 
22&' 
82,  710 
245 

167,  181 

763,  764 

66 

22 

923 

182,  209 
229 

780,  894 
981 
IIT 

245,  946 
934 
604 
666 
489 
613- 
518 
Walker,  355,  535. 
48a 


AMERICAN   AUTHORITIES    CITED. 


cm 


Page 

Page 

"Weston  V.  Ketcham, 

522 

Whittemore  v.  Elliott, 

469 

Westphall  v.  Ilcnney, 

774 

Whittle  V.  McFarlane, 

514 

West  Point  Foundry  Assoc. 

V. 

Whitworth  v.  Ballard, 

348 

Brown, 

7 

V. 

Harris, 

796 

Wetter  v.  Schliepisr, 

183 

WicklifFe  v.  Eve, 

777 

Whaley  v.  Moody, 

182 

Widdifield  tJ.Widdifield, 

108 

Wharton  v.  Clements, 

234 

Wiegand  v.  Copeland, 

553 

Wheatley  v.  Tutt, 

444 

Wiesenfeld  v.  Byrd, 

488 

Wheatly  v.  Calhoun, 

616,  560 

Wiggins  1).  Cummings, 

944 

Wheeler  v.  Arnold, 

631,  934 

Wilbey  v.  Phinney, 

929 

1.  Bullard, 

467 

Wilcox  V.  Dodge, 

17 

V.  Rice, 

268 

V. 

Jackson, 

185 

V.  Sage, 

517,  529 

V. 

Kelogg, 

574 

Whigham's  appeal. 

625 

V. 

Matthews, 

105 

Whipple  V.  Parker, 

6 

V. 

Wilcox, 

583 

599 

Whitaker  v.  Brown, 

120 

190,  191 

Wild  V.  Davenport, 

40, 

1039 

Whitcomb  v.  Converse, 

687.  688 

Wilder  v.  Keeler, 

1016 

White  V.  Dougherty, 

506,  609 

V. 

Morris, 

354 

V.  Gibson, 

226 

Wildes  V.  Fessenden, 

396 

V.  Ilackett, 

1018 

Wiles 

V.  Maddox, 

507 

616 

«.  Harlow, 

939 

Wilkins  v.  Davis, 

967, 

1084 

■p.  Jones,             195, 

487, 

607,  739 

V. 

Pearce, 

212 

V.  Kearney, 

163,  355 

Wilkinson  v.  Griswold, 

373 

V.  Kirney, 

990 

V. 

Henderson, 

404 

489 

V.  Murphy, 

366 

». 

Jett, 

30 

V.  Parish, 

574,  894 

V. 

Yale, 

569 

V.  Savery, 

436 

Willet 

V.  Chambers, 

270 

V.  Smith, 

315,  476 

Willett  V.  Stringer, 

214 

245 

V.  Tudor, 

468 

Wille> 

V.  Carter, 

229 

559 

V.  Union  Ins.  Co., 

355,  1016 

William  v.  Roberts, 

228 

V.  Warde, 

942 

V. 

Waugh, 

426 

V.  White, 

822,  841 

Williams,  ex  parte, 

1176 

V.  Woodward, 

507 

Williams,  re,                  145, 

1020, 

1065 

White  Mountain  Bank  v 

.  West,      564 

V. 

Barnett, 

228 

Whitehall  v.  Shickle, 

19 

V. 

Birch, 

366 

Whitehead  v.  Bank  of 

Pittsburgh, 

V. 

Bowers, 

366 

355 

V. 

Boyd, 

397 

V.  Darling, 

862 

V. 

Brimhall, 

276 

Whitesides  v.  Collier, 

943 

V. 

Gage, 

609, 

1024 

■V.  Lafferty, 

522,  909 

V. 

Gdchrist, 

266 

Whitewright  v.  Stimpson, 

492 

V. 

Gillies, 

146 

Whiting  V.  Furranet, 

372 

V. 

Henshaw, 

930 

Whitlock  V.  McKechnie, 

146 

V. 

Hitchings, 

390 

Whitman  v.   Boston,    &c.   Railroad, 

v. 

Hodgson, 

208 

487 

v. 

Love, 

602 

606 

«.  Leonard, 

342 

,  349,  976 

V. 

Mathews, 

350 

V.  Porter, 

640 

V. 

More, 

280 

V.  Robinson, 

900 

V. 

Nicholson, 

774 

Whitmore  v.  Adams, 

182 

V. 

Rogers, 

420 

468 

V.  Parks, 

512,  757 

V. 

Soutter, 

109 

«.  Shiverick, 

586 

V. 

Walbridge, 

265 

,  266 

Whitney  v.  Cotton, 

565,  566 

V. 

Wilson, 

746 

V.  Ludington, 

42 

Williamson  i\  Fontain, 

568 

V.  Sterling, 

119 

V. 

Fox, 

370 

Whittaker  v.  Brown, 

179 

V, 

Haycock, 

818 

CIV 


AMERICAN   AUTHORITIES   CITED. 


Page 

Williamson  v.  McGinnis, 

390 

V.  Munroe, 

906 

T.  Wilsou, 

837,  994 

Willings  T.  Consequa, 

390 

Willis  V.  Freeman, 

1016 

r.  Hill, 

284 

Willson  T.  Fitcher, 

902 

Wilson,  re, 

1070,  1199 

V.  Bowden, 

573 

V.  Coleman, 

106 

t\  Connie, 

1016,  1024 

V.  Dargan, 

200 

V.  Greenwood, 

732 

V.  Hunter, 

205,  206 

V.  Lovelace, 

108 

1).  McConnell, 

1016 

V.  Richards, 

182 

V.  Soper,       491,   584, 

586,    683, 

1017 

e.  Stewart, 

147 

V.  Stillwell, 

757 

V.  Strobach, 

607 

V.  Torbet, 

355 

V.  Wallace, 

459,  461 

V.  Williams, 

266 

V.  Wilson, 

127 

Wilt  t).  Bird, 

943 

Wiltram  v.  Van  Wormer, 

189 

Wimpee  v.  Mitchell, 

1013 

Windham  County  Bank  v.  Kendall, 

182 
Winliens,  ex  parte,  1199 

Winship  v.  Bank  of  United  States, 

161,  164,  261 
Winslow  V.  Cheffelle,  105 

Winsor  «.  Kendall,  1083 

V.  McLellan,  1083,  1091 

V.  Savage,  665 

Winston  r.  Taylor,  336 

Winter  r.  lunes,  403 

Wintersmith  v.  Pointer,        1016,  1024 


Wise  V.  Copley, 
v.  Williams, 
Wisenficld  r.  Byrd, 
Wisham  v.  Lippincott, 
Witcher  v.  Brewer, 
"Withers  t.  Withers, 
Witler  V.  Richards, 
AVitter  r.  M'Xeil, 
Woddsop  V.  Ward, 
Wolbett  V.  Harris, 
Wolf  T.  Mills, 
Wolfe  r.  Gilmer, 
Wolff  r.  Shelton, 
WoUe  V.  Brown, 


394 


498 
453 
375 

1017 
233 
714 
609 
288 

1016 
906 
234 

.  594 

'  859 
172 


Pasre 

Wood  V.  Connell,  227 

Wood  V.  CuUen,  55,  472 

V.  Deutchman,  930 

v.  Erie  Ry.  Co.,  125 

V.  Fox,  848 

V.  Gault,  955 

V.  Goss,  225 

V.  Johnson,  626 

V.  Merrow,  918 

V.  Montgomery,  559 

V.  O'Kelly,  459 

V.  Peunell,  56 

v.  Scoles,  665 

V.  Shepard,  255 

V.  Shepherd,  175 

V.  Wood,  1005 

Woodbury  v.  Sackrider,  218 

Woodruffs.  King,  214,  342 

Woods  V.  Quarles,  118 

Woodward  v.  Clark,  55 

«.  Francis,  882 

V.  Horst,  200 

V.  Newhall,  469 

V.  Winship,  166 

Woodworth  v.  Downer,  356 

V.  Fuller,  455 

V.  Spaflford,  308 

Wray  v.  Hutchinson,  977 

Wright  r.  Ames,  163 

V.  Brosseau,  332 

V.  Cumpsty,  932 

V.  Eastman,  925 

V.  Harris,  450 

V.  Hooker,  145,  289,  933 

V.  Michie,  922 

V.  Storrs,  489 

V.  Ward,  609,  781 

V.  Williamson,  436 

Wycoff  T.  Purnell,  929 

Wyman  v.  Chicago  &  Alton  R.  Co.. 

42 


Yale  v.  Eames, 

V.  Yale, 
Yancey  v.  Mariott, 
Yandef  v.  Lefavour, 
Yates  v.  Watson, 
Yeager  r.  Wallace, 
Yeatman  v.  Woods, 
Yocum  V.  Benson, 
Yoke  T.  Barrett, 
York  T.  Clemens, 
York  Bank's  appeal, 
Young,  ex  ]jartc, 

V.  Brick, 


357 

275 

117 

195 

468 

263,  535 

568 

106 

688,  881,  937 

108,  955 

446,  708 

684,  733 

942 


AMERICAN    AUTH0K1TIE8    CITED. 


ev 


Young  V.  Clute, 
V.  Pearson, 
V.  Smith, 
V.  Tibbitts, 

^ALLAB  V.  Janvrin, 


Paffp 


687 

Zane  v.  Thomas, 

138 

832 

Zarega,  ex  2><irte, 

1200 

55,  174 

Zimmerman  v.  Erhard, 

97,  125 

368 

v.  Huber, 

644,  645 

Zook  V.  Clemens, 

661 

866 

Zuel  V.  Bowen, 

179 

ADDITIONS  AND  CORRECTIONS. 


Page  17,  note  (m)     See  below,  p.  38,  note  (d). 
"     34,  line  4  See  below,  p.  38,  note  (d). 

"     3?;  note  (S   I  See  below,  p.  38,  note  (.0. 

"  38,  note  (d)  Badeley  v.  Consolidated  Banh,  34  Ch.  D.  536,  was  reversed 
on  appeal  (9th  Feb.  1888)  W.  N.  1888,  p.  30,  so  far  as  the 
Court  below  decided  that  the  lender  Avas  liable  for  the 
debts  of  the  borrower.  The  advances  were  made  to  enable 
the  borrower,  a  railway  contractor,  to  perform  a  contract 
to  make  a  railway;  the  advances  were  to  beem]iloycd  for 
this  purpose;  the  benefit  of  the  contract  and  the  borrower's 
plant,  &c.,  were  assigned  to  the  lender  as  a  security  for  the 
loan ;  and  the  lender  was  empowered  to  take  possession  of 
the  plant,  &c.,  and  himself  to  complete  the  contract  if 
necessary.  The  borrower  agreed  to  repay  the  advances 
with  interest  at  the  end  of  six  months  after  they  were 
made,  and  there  was  a  proviso  for  redemption  on  such 
repayment.  The  borrower  also  agreed  to  pay  the  lender  a 
share  of  the  profits  rising  from  the  contract  with  the 
railway  company  when  that  contract  should  be  completed^ 
and  it  was  stipulated  that  in  ascertaining  those  profits 
the  borrower  should  be  allowed  certain  sums  for  himself. 
There  was  a  mass  of  correspondence  relied  upon  for  the 
purpose  of  showing  that  the  borrower  and  lender  were 
really  partners,  and  Mr.  Justice  Stirling  decided  that  the 
correspondence  showed  that  this  really  was  the  case.  The 
Court  of  Appeal  differed  from  him  on  this  point,  and  held 
that  the  correspondence  was  consistent  with  the  formal 
security,  and  that  the  contract  between  the  parties  was 
really  what  it  purported  to  be,  viz.  a  contract  of  loan  upon 
security.  The  Court  of  Appeal  decided  that,  although  the 
case  was  not  within  §  1  of  Bovill's  Act,  it  came  within 
the  principles  laid  down  in  Cox  v.  Hickman  and  Mollwo 
March  &  Co.  v.  Court  of  Wards.  The  statement  in  the 
text  on  p.  34,  lines  1  to  7,  may,  it  is  apprehended,  be 
now  safely  relied  upon.  The  Court  of  Appeal  confirmed 
the  decision  in  Badeley  v.  Consolidated  Banh  on  the  con- 
struction put  on  §  5  of  Bovill's  Act:  see  p.  36,  note  (t)^ 
and  p.  37,  note  {a). 

[cviij 


CVIU  ADDITIONS    AND    CCKKECTIONS. 

Compare  the  last  case  -with  Frowde  y.  Williams,  56 
L.  J.  Q.  B.  G2,  in  which  a  would-be  lender  was  held  to  be 
a  partner  with  the  borrower. 

Page  60,  line  5  After  (n)  add.  "  unless  he  and  his  co-tenants  are  under  some 
duty  or  obligation  to  others  to  repair" :  seethe  authorities 
in  notes  (in)  and  (n). 

"     78,  note  (//)     Add  Ex  parte  Coulson,  20  Q.  B.  D.  249. 

"     99,  note  (p)     For  55  Geo.  3,  c.  104,  read  c.  194. 

"     126,  note  {g)  )  See  also  Simpsori's  Claim,  36  Ch.  D.  532,  where  a  company 

"     138  \      was  held  not  liable  on  a  promissory  note  given  by  its 

general  agent  as  security  for  a  guarantee  given  b}'  the 

promissee  for  payment  of  goods  ordered  by  the  agent  for 

the  company. 

"     141,  note  (l)     Blaclcburn,   Low   &  Co.    v.    Vigors    was  reversed  by  the 
House  of  Lords:  see  12  App.  Ca.  531. 

*'     143,  note  {t)     Lacey  v.  Hill,  4  Ch.  D.  537,  was  affirmed  by  the  House  of 
Lords  under  the  name  of  Reed  v.  Bailey,  3  App.  Ca.  94. 

*'     163  See  also  Sawyer  v.  Goodwin,  36  L.  J.  Ch.  578,  where  a  firm 

was  held  liable  for  the  fraudulent  act  of  a  partner  who  had 
falsified  an  abstract  of  title  for  the  purpose  of  concealing 
prior  incumbrances. 

"     180,  185  In  Odell  v.    Cormaclc,  19  Q.   B.  D.    223,  a  bill  drawn  on 

CormacTc  Brothers  was  accepted  by  Carter  for  Margaret 
Cormaclc  <&,  Self.  Carter  was  not  a  partner  with  her, 
and  had  no  authority  to  accept  bills  for  either  in  her 
own  name  or  in  the  name  of  the  firm  in  which  she 
carried  on  business,  and  she  was  held  not  liable  on  the 
bill. 

*'     191,  note  {y)    See  also  BaronessWenloch  v.  River  Dee  Co.,  36  Ch.  D.  674, 
which  is  under  appeal. 

*'     191,  note  (2)     For  Book  HL  c.  3,  §  1,  reaJ  c.  6,  §  3,  p.  381  c«  se^. 

"     193,  note  (l)     Kendall  v.  HamiltoQi,  4  App.  Ca.  504,  decided  two  points, 
*'     255,  note  («)         viz.,  1,  that  ordinary  partnership  debts  are  not  joint  and 
"     256    notes  (a;)       several;  2,  that  a  judgment  by  a  joint  creditor  of  a  firm 
and  (c)  against  one  partner  in  an  action  brought  against  him  only, 

264  discharges  his  co-partners,  although  the  judgment  is  un- 

*'     281  satisfied  and  although  the  co-partners  were  unknown  to 

the  creditor  when  he  recovered  judgment.  This  last  rule, 
althouj^h  now  settled  to  be  law,  rests  on  technical  reason- 
ing, and  if  not  carefully  limited  in  its  application  will  lead 
to  unexpected  and  unjust  results.  In  Gamhefortw.  CJiap- 
man,  19  Q.  B.  D.  229,  the  rule  was,  however,  extended 
very  considerably.  In  that  case  the  facts  were  as  follows  . 
Wilson  &  Chap7na7i  curried  on  business  imder  the  name  of 
Wilso)i  t£  Co.,  and  became  indebted  to  the  plaintiff  for 
goods  sold  and  delivered.  The  plaintiff  only  knew  Wilson: 
Chapman  was  a  dormant  partner.  Wihon  &  Chajimun  . 
dissolved  partnership,  but  the  plaintiff  was  ignorant  of 
this.     After  the  dissolution  the  plaintiff'  drew  a  bill  on 


ADDITIONS    AND   C0EKECTI0N8.  CIX 

Wilson  &  Co.,  iix\([  Wilson  accepted  it  in  that  name.  The 
bill  was  given  for  the  partnership  debt,  and  was  dis- 
honored. The  plaintiff  sued  Wilson  S  Co.  on  the  bill 
and  obtained  judgment  against  Wilson  &  Co.,  but  could 
not  get  payment  from  Wilson.  The  plaintiff  afterwards 
sued  Chapman  for  tlie  goods ;  but  it  was  held  that  the  bill 
having  been  given  for  the  goods,  and  not  as  a  collateral 
security  only  (as  to  which,  see  p.  256,  note(c),  and  p.  704, 
notes  [d)  to  (/<),  the  action  on  the  bill  was  in  substance 
an  action  against  Wilson  for  the  goods,  and  that  the  judg- 
ment against  him,  although  unsatisfied,  afforded  Chap- 
man a  good  defence  to  the  action  against  him.  Observe 
that  the  bill  did  not  bind  him,  nor  did  the  judgment. 
But  qucEve  whether  Kendall  v.  Hamilton,  applies  to- 
such  a  case  ? 

Page 264,  notes  (J)  ^  If  one  only  of  several  joint  contractors   is  sued  he   can 
and  (c)         >      require  the  others  to  be  made  defendants :  Pilley  v.  Eob- 
"    280,  note  {d)  )      inson,  20  Q.  B.  D.  155. 

"  267,  notes  (*)  )  As  to  contracts  with  partnei's,  which  although  joint  in  form,, 
and  (y)        >      are  in  point  of  law  joint  and  several  owing  to  the  separate 

"  273,  note  {h)  )  interests  of  the  partners,  see  Palmer  v.  Mallet,  36  Oh. 
D.  411,  a  case  of  a  contract  by  an  assistant  not  to  carry 
on  business  without  the  consent  of  the  partners. 

"  347,  note  (a)  The  decision  of  the  Court  of  Appeal  in  A.  G.  v.  Marquis 
ofAileslury,  16  Q.  B.  D.  408,  was  reversed  by  the  House 
of  Lords,  12  App.  Ca.  672,  which  restored  the  judgment 
of  the  Divisional  Court  in  14  Q.  B.  D.  895.  Matson  v. 
Swift,  8  Beav.  368,  must  be  taken  as  now  overruled :  see 
Lord  Macnaghten's  judgment,  12  App.  Ca.  696. 

"     362  (7)  See  a  suggested  form  of  order  inSeton  on  Decrees  1214,  n, 

(ed.  4),  referred  to  in  Whetham  v.  Davey,  30  Ch.  D.  579. 

"  375,  note  (w)  See  Lloyd  v.  Dimmach,  7  Ch.  D.  398,  where  Ranelagh  v. 
Hayes  was  disapproved,  and  the  Court  declined  to  decree 
specific  performance  of  a  covenant  to  indemnify  w  th 
liberty  to  apply  in  the  event  of  future  breaches  which 
might  or  might  not  occur.  Lloyd  v.  Dimmack  is,  how- 
ever, not  opposed  to  the  statements  in  the  text  nor  to  the 
cases  cited  in  p.  375,  notes  (li),  {%)  and  (Z).  See  the  last 
direction  in  the  order,  7  Ch.  D.  402. 


THK 


Law  of  Partnership. 


INTRODUCTORY. 


1.  Meaning  of  the  word  ^^partnership ''  *1. 

2.  Distinction  between  partnerships,  corporations  and  companies,  *4. 


1.  Meaning  of  the  word  ^^partnership" 

To  frame  a  definition  of  any  legal  term  which  shall  be  both  posi- 
tively and  negatively  accurate  is  possible  only  to  those  who,  having 
legislative  authority,  can  adapt  the  law  to  their  own  definition.  Other 
persons  have  to  take  the  law  as  they  find  it ;  and  rarely  indeed  is  it  in 
their  power  to  frame  any  definition  to  which  exception  may  not  justly 
be  taken.  All  that  they  can  usefully  attempt  is  to  analyze  the  mean- 
ings of  the  words  they  use,  and  to  take  care  not  to  employ  the  same 
word  in  different  senses,  where  so  to  do  can  possibly  lead  to  confusion. 

Without  attempting,  then,  to  define  the  terms  "partners"  and  "part- 
nership," it  will  suffice  to  point  out  as  accurately  as  possible  the  leading 
ideas  involved  in  those  words.  The  terms  in  question  are  evidently 
derived  from  to  part,  in  the  sense  of  to  divide  amongst  or  share,  and 
this  at  once  limits  their  application,  although  not  very  precisely — for 
persons  may  share  almost  anything  imaginable,  and  may  do  so  either 
by  agreement  amongst  themselves  or  otherwise.  But,  in  order  that 
persons  may  be  partners  in  the  legal  acceptation  of  the  word,  it  is 
requisite  that  they  shall  share  something  by  virtue  of  an  agreement  to 
that  effect,  and  that  that  which  they  have  agreed  to  share  shall  be  the 

1 


2*  PARTNERSHIPS.  [INTRODUCTORY. 

profit  arising  from  some  predctermiued  business  engaged  in  for  their 

^  -.     common  benefit.     An  agreement  that  something  shall  be  at- 

^     tempted  with  a  view  to  gain,  and  *that    the  gain  shall   be 

shared  by  the  parties  to  the  agreement,  is  the  grand  characteristic  of 

every  partnership,  and  is  the  leading  feature  of  nearly  every  definition 

of  the  term,  (a) 

Partnershij),  though  often  called  a  contract,  is  in  truth  the  result  of 
a  contract ;  the  relation  which  subsists  between  persons  who  have 
agreed  to  slvare  the  profits  of  some  business  rather  than  the  agreement 
to  share  such  profits.  1 

By  some  writers  associations  which  have  not  gain  for  their  object 
are  occasionally  termed  partnerships,  and  even  in  the  Companies  act, 
1862,  partnerships  having  gain  for  their  object  are  referred  to,  and  the 
reader  is  thereby  led  to  suppose  that  there  may  be  partnerships  of  some 
other  kind,  (b)  But  to  use  the  word  ''partnership"  to  denote  a  society 
not  formed  for  gain  is  to  destroy  the  value  of  the  word,  and  can  lead 
only  to  confusion,  (c)  Nor  is  it  consistent  with  modern  usage.  Lord 
Hale  and  older  writers  use  copartnership  in  the  sense  of  co-owner- 
ship, but  this  is  no  longer  customary  ;  and,  as  will  be  shown  here- 
after, there  are  many  important  differences  between  the  two.  (d) 

Although,  for  the  reasons  already  stated,  the  writer  has  not  at- 
tempted to  give  a  definition  of  the  term  "partnership,"  he  appends  for 
the  consideration  of  the  reader  the  following  definitions  taken  from 
works  of  celebrity  : 

Civil  Code  of  Neiv  York. — Partnership  is  the  association  of  two  or  more  persons  for 
the  purpose  of  carrying  on  business  together,  and  dividing  its  profits  between  them,  (e) 

(a)  Mollow,  March  &  Co.  v.  Court  of  created  by  construction  of  law,  though  not 

Wards,  L.  R.,  4  P.  C.  436 ;  R.  v.  Robson,  intended,  and  not  actually  existing  as  be- 

16  Q.  B.  D.  187.  *  tween  the  parties.   New  Orleans  v.  Gauth- 

1.  Thus,  it  is  held  that  a  partnership,  reauz,  32  La.  Ann.  1126;  Baldy  t;.  Brack- 

with  all  its  incidents,  may  be  created  with-  enridge  (La.),  2  So.  Rep.  410 ;  but  not  so 

out  articles  in  writing.    Buffum  v.  BuflFum,  unless  the  third  persons  have  been  misled 

49  Me.  108.  by  concealment  of  facts,  or  by  deceptive 

In  Louisiana,  partnership  and  commu-  appearances.     Beecher  v.  Bush,  45  Mich, 

nity  are  not  to  be  confounded.     The  first  188;  S.  C,  40  Am.  Rep.  465. 
is  based  on  the  contract  of  the  parties,        (6)  See  section  4  of  the  act. 
which  thus  creates  the  community;   the        (c)  See  as  to  clubs,  infra,  ch.  1,  §  5. 
last  may  exist  independently  of  any  con-        (d)  See  infra,  ch.  1,^6. 
tract  whatsoever.   Pickerell  r.  Fisk,  11  La.        (e)  Civil   Code  of   the  State   of   New 

Ann.  277.     And  it  is  well  settled  that  as  York,  §  1283. 
to  third   persons   a   partnership  may   be 

2 


INTRODUCTORY.]  DEFINITIONS. 


9* 


Code  Civil.— La.  societe  est  un  contrat,  par  leqiiel  deux  ou  plusieiirs  personnes  con- 
viennent  de  mettre  quelque  chose  en  cominnn,  dans  la  vue  de  partager  le  b^n^fice 
qui  pourra  en  resiilter.  (/) 

Dixon. — A  partnership  is  a  voluntary  unincorporated  association  of  individuals 
standing  to  one  another  in  the  relation  of  principals  for  carrying  out  a  joint  opera- 
tion or  undertaking  for  the  purpose  of  joint  profit,  [g) 

Domat. — La  societe  est  une  convention  entre  deux  ou  plusieurspersonnes,  parlaquelle 
ils  mettent  en  coiniuun  entre  eux  ou  tons  leurs  biens  ou  une  partie,  ou  quelque  com- 
merce, quelque  ouvrage,  ou  quelque  autre  aflTaire,  pour  *partager  tons  ce  qu'ils 
pourront  avoir  de  gain  ou  soufirir  de  perte  de  ce  qu'ils  auront  mis  en  soci^td.  {h) 

Xent. — Partnership  is  a  contract  between  two  or  more  competent  persons  to  place 
their  money,  effects,  labor  and  skill,  or  some  or  all  of  them,  in  lawful  commerce  or 
business,  and  to  divide  the  profit  and  bear  the  loss  in  certain  proportions,  (i) 

Indian  Contract  .4c^.— Partnership  is  the  relation  which  subsists  between  persons  who 
have  agreed  to  combine  their  property,  labor  or  skill  in  some  business,  and  to  share 
the  profits  thereof  between  them,  {k) 

Parsons. — Partnership  is  the  combination  by  two  or  more  persons  of  capital,  or 
labor  or  skill,  for  the  purpose  of  business  for  their  common  benefit.  {I) 

Pollock. — Partnership  is  the  relation  which  subsists  between  persons  who  have 
agreed  to  share  the  profits  of  a  business  carried  on  by  all  or  any  of  them  on  behalf 
of  all  of  them,  (m) 

Pothier  (1).— Le  contrat  de  societe  est  un  contrat  par  lequel  deux  ou  plusieurs  per- 
sonnes  mettent,  ou  s'obligent  de  mettre,  en  commun  quelque  chose,  pour  faire  en  com- 
mun  un  profit  iionnete,  dont  ils  s'obligent  reciproquement  de  se  rendre  compte.  (?i) 

Pothier  (2). — Societas  est  contractus  de  conferendis  bona  fide  rebus  aut  operis,  animo 
lucri  quod  honestum  sit  ac  lictum  in  commune  faciendi.  (o) 

Prussian  Code. — Ein  Vertrag  durch  welchen  mehrere  Personen  ihr  Vermogen  oder 
Gewerbe  oder  auch  ihr  Arbeiten  und  Bemiihungen  ganz  oder  zum  Theil  zur  Erlang- 
ung  eines  gemeinschaftlichen  Endzwecks  vereinigen,  wird  ein  Gesellschaftsvertrag 
gennant.  (p) 

Pufendorf: — Le  contrat  de  society  se  fait  lorsque  deux  ou  plusieurs  personnes  met- 
tent en  commun  leur  argent,  leurs  biens,  ou  leur  travail,  a  la  charge  de  partager 
entr'eux  le  gain  et  de  supporter  les  pertes  qui  en  arriveront,  chacun  a  proportion  de 
ce  qu'il  contribue  du  sien.  (q) 

Rutherford.— When  two  or  more  persons  join  money,  or  goods,  or  labor,  or  all  of 
these  together,  and  agree  to  give  each  other  a  common  claim  upon  such  joint  stock, 
this  is  partnership,  (r) 

(/)  Code  Civil,  |  1832.  nership  (3d  ed.),  ?  4. 

(g)  Dixon's  Law  .of  Partnership  1.  (n)  Pothier,  Traits  du  Contrat  de  So- 

{h)  Domat,  les  Lois  Civiles,  liv.  i.,  tit.  8,  ciet^,  §  1.     There  is  a  useful  English  edi- 

^  1.  tion  of  this  work  by  O.  D.  Tudor,  Esq. 

(0  3  Kent's  Com.  23.  (o)  Pothier,  Pand.,  lib.  xvii.,  tit.  2,  art.  1, 

{k)  Indian  Contract  act,  §  239.  ?  1. 

[l)  Parsons  on  Part.,  ch.  2,  'i  1.  This  de-  (p)  Allgem.  Landsrecht  fiir  die  Preuss. 

finition  is  inaccurate.     The  word  denotes  Staat.,  th.  i.,  tit.  3,  ^  169. 

a  combination  of  persons,  not  a  combina-  (q)  Pufendorf,  Le  Droit  de  la  Nat.  et 

tion  of  capital.  des  Gens  (ed.  Barbeyrac),  liv.  v.,  ch.  8,  §  1. 

(?n)  Pollock's  Digest  of  the  law  of  Part-  (r  j  Inst,  of  JSTat.  Law,  book  i.,  c.  13,  §  9. 


3*  PARTNERSHIPS.  [INTRODUCTORY. 

Story. — Partnership,  often  called  copartnership,  is  usually  defined  to  be  a  volun- 
tary contract  between  two  or  more  competent  persons  to  place  their  money,  effects, 
labor  and  skill,  or  some  or  all  of  them,  in  lawful  commerce  or  business,  with  the 
understanding  that  there  shall  be  a  communion  of  the  profits  thereof  between 
them,  (.s) 

Thibaut. — Verbinden  sich  mehrere  zur  Erreichung  eines  ihnen  gemeinschaftlichen 
*Endzwecks  so  wird  diesz  ein  Gesellschaftsvertrag  {socieias,  Mascopei,  Mageu- 
J  schaft)  gennant.  Geschieht  diese  Verbindung  zu  eigenniitzigen  Zwecken  so 
nennt  man  sie  socieias  qucestuaria,  oder  negotiatoria,  sonst  aber  non  qucestuaria.  [t) 

Vinnius. — Societas  est  contractus,  quo  inter  aliquos  res  aut  operse  communicantur, 
lucri  in  commune  faciendi  gratia,  (u) 

Voet. — Societas  est  contractus  jurisgentium,  bonse  fidei,  consensu  constans,  semper 
re  honesta,  de  lucri  et  damni  communione.  (x) 

Watson. — Partnership  is  a  voluntary  contract  between  two  or  more  persons  for 
joining  together  their  money,  goods,  labor  and  skill,  or  either  or  all  of  them,  upon  an 
agreement  that  the  gain  or  loss  shall  be  divided  proportionably  between  them,  and 
having  for  its  object  the  advancement  and  protection  of  fair  and  open  trade,  (y) 

All  the  above  definitions,  however,  with  the  exception  of  Mr.  Dixon'.s, 
are,  with  reference  to  the  law  of  England,  too  wide ;  for  they  include 
not  only  partnership.s  in  the  proper  sense  of  the  word,  but  also  many 
corporations  and  companies  which  differ  from  partnerships  in  several 
important  respects,  and  which  it  is  better,  therefore,  not  to  denote  by 
the  same  word.  Mr.  Dixon's  definition  avoids  this  error,  but  the  re- 
lation of  principals  to  which  he  refers  is  not  altogether  free  from  ob- 
jection. (2)  2 

If  partnership  is  defined  so  widely  as  to  include  mcorporated  and 

(s)  Story  on  Part.,  §  2.  Busley,  2  Bing.  N.    C.    108.     See,  also, 

(t)  Thibaut,  System  des  Pandekten  definition  by  Patterson,  J.,  in  Bond  v. 
Kechts  (9th  ed.),  §  467.  This  division  of  PiUard,  3  M.  &  W.  357. 
partnerships  into  partnerships  having  gain  A  partnership  arises  when  two  or  more 
for  their  object,  and  other  partnerships,  is  persons  agree  to  combine  property  or 
noticed  by  most  German  writers  on  the  labor,  or  both,  in  a  common  undertaking, 
civil  law.  sharing  profit  and  loss.    Perry  i'.  Butt,  14 

(m)  Vinn.  Inst.  iii.  26.  Ga.  699;  Solomon  v.  Solomon,  2  Ga.  18; 

(x)  Voet  Comm.  ad  Pand.,  lib.  xvii.,  tit.  Gregory  v.  Dodge,  14  Wend.  (N.  Y.)  593. 
2,  Pro  Socio,  §  1.  See,  also.  Chapman  v.  Wilson,  1  Rob.  (Va.) 

(y)  Watson  on  Part.  1.  This  definition  267.  It  is  a  joint  interest  in  the  net 
is  copied  by  Gow  in  his  work  on  Partner-  profits  of  an  adventure  or  business,  or  in 
ship.  the  profits  as  affected  by  the  losses.    Chap- 

(z)  See  the  observations  of  the  Master  man  v.  Devereux,  32  Vt.  616.  It  is  the 
of  the  Rolls  on  the  above  definitions,  in  existing  community  of  interest  and  par- 
Pooley  V.  Driver,  5  Ch.  D.  471  et  seq.  ticipation  in  profit  and  loss  that  constitutes 

2.    Partnerships  have    been    variously    a  partnership.      Felichy  v.  Hamilton,  1 
defined.      "A    mutual    participation    in    Wash.  (U.  S.)  491. 
profit  and  loss."    Tindal,  C.  .J  ,  in  Green  v. 


INTRODUCTORY.]    CORPORATIONS    AND    COMPANIES.  4* 

other  companies,  partnerships  must  be  subdivided  into  (1)  ordinary  and 
(2)  extraordinary  partnerships,  as  in  the  Indian  Contract  act.  (a)  But 
it  is  more  in  accordance  with  ordinary  usage  to  confine  the  word  to 
unincorporated  societies  not  governed  by  any  special  statute  or  custom. 

2.  Distinction  between  partnerships,  corporations  and  companies. 

Corporations. — A  corporation  is  a  fictitious  person,  created  by 
special  authority  (by  the  law  of  England  by  the  crown  or  by  p^. 
par*liament),  and  endowed  by  that  authority  with  a  capacity  '- 
to  acquire  rights  and  incur  obligations,  as  a  means  to  the  end  for  the 
attainment  of  which  the  corporation  is  created.  A  corporation,  it  is 
true,  consists  of  a  number  of  individuals,  but  the  rights  and  obliga- 
tions of  these  individuals  are  not  the  rights  and  obligations  of  the  fic- 
titous  person  composed  of  those  individuals  ;  nor  are  the  rights  and 
obligations  of  the-  body  corporate  exercisable  by  or  enforceable  against 
the  individual  members  thereof,  either  jointly  or  separately,  but  only 
collectively,  as  one  fictitious  whole.  As  the  civilians  neatly  express  it 
— Si  quid  imi  versitati  debetur  singulis  non  debetur,  nee  quod  debet  uni- 
versitas  singuli  debent. 

With  partnerships  the  case  is  otherwise ;  the  members  of  these  do 
not  form  a  collective  whole,  distinct  from  the  individuals  composing 
it ;  nor  are  they  collectively  endowed  with  any  capacity  of  acquiring 
rights  or  incurring  obligations.  The  rights  and  liabilities  of  a  partner- 
ship are  the  rights  and  liabilities  of  the  partners,  and  are  enforceable  by 
and  against  them  individually  :  Si  quid  societati  debetur  singulis  debetur 
et  quod  debet  societas  singuli  debent.  (6) 

Companies.  1.  Unincoi^porated. — The  fundamental  distinction 
between  partnerships  and  unincorporated  companies  is  that  a  partner- 
ship consists  of  a  few  individuals  known  to  each  other,  bound  together 
by  ties  of  friendship  and  mutual  confidence,  and  who,  therefore,  are 
not  at  liberty,  without  the  consent  of  all,  to  retire  from  the  firm  and 
substitute  other  persons  in  their  places  ;  whilst  a  company  consists  of  a 
large  number  of  individuals  not  necessarily  nor,  indeed,  usually,  ac- 
quainted with  each  other  at  all,  so  that  it  is  a  matter  of  comparative 
indifference  whether  changes  amongst  them  are  effected    or  not.  (c) 

(a)  See  section  266.  •   Ryhope  Coal  Co.  v.  Foyer,  7  Q  B.  D.  498. 

[b]  See  Lloyd  v.  Loaring,  6  Ves.  773;  (c)  See  per  James,  L.  J.,  in  Smith  v. 
Beaumont  v.  Meredith,  3  Ves.  &  B.  180 ;    Anderson,  15  Ch.  D.  273. 

5 


5*                                                              COMPANIES.  [introductory. 

Nearly  all  the  differences  which  exist  between  ordinary  partnerships 
and  unincorporated  companies  will  be  found  traceable  to  the  above 
distinction.  Indeed,  it  may  be  said  that  the  law  of  unincorporated 
companies  is  composed  of  little  else  than  the  law  of  partnership  modi- 
lied  and  adapted  to  the  wants  of  a  large  and  fluctuating  number  of 
members. 3 

3.   Unincorporated    associations    or  persons  agree  to  form  a  corporation,  some 

companies,  when  partnerships — Asso-  putting   in    machinery    and   patents,  and 

ciales  in  business  ventures  not  purporting  others  money  and  labor ;  hut  no  corpora- 

on  their  face  to  be  partnership   transac-  tion  is  formed  by  reason  of  a  failure  to 

tions,  have  often  been  held  to  be  partners,  comply  with  the  statute,  if  the  parties  are 

at  least  as  to  third  persons.    Thus,  the  in-  entitled  to  share  in  the  profits  and  losses, 

dividual  members  of  a  voluntary  associa-  it   will    constitute    a    quasi   partnership, 

tion  organized  to  relieve  its  members  in  although  the  title  to  the  property  put  in, 

case  of  sickness  or  distress,  are  partners,  whether   real    or   personal,    may    not   be 

Gorman  t;.  Russell,  14  Cal.  531.  changed.     Flagg  i;.  Stowe,  85  111.  164. 

Although  it  appears  that  persons  sued  So,  also,  where  stockliolders  in  a  manu- 

as  purchasers  of  goods  were  organized  as  facturing  corporation,  whose  charter  has- 

a  joint  stock  company,  yet,  if  they  were  exi)ired,  agree  to  continue  the  business  in 

not  incorporated,  they  constitute  a  part-  the  corporate   name,   appointing  one  of 

nership,  and,  though  an  extensive  one,  aie,  their  numher  as  managing  agent  to  carry 

in  the  main,  subject  to  the  rules  and  lia-  on    the   business,    and    agree   to   furnish 

bilities  governing  that  relation.    Manning  money  when  called  for  by  him,  in  pro- 

t'.  Gasharie,  27  Ind.  399.  portion  to  the  number  of  shares  held  by 

While  joint  stock  associations  are  not  each,  they  are  liable  to  third  persons  as 
in  all  cases  copartnerships  (Cox  v.  Bodfish,  partners,  upon  commercial  paper  made  by 
35  Me.  302),  yet  where  the  organization  such  agent  for  the  benefit  of  the  firm,  and 
of  a  manufacturing  company  is  so  defective  signed  with  the  name  of  the  former  cor- 
as  to  fail  to  create  a  corporation,  the  asso-  poration  by  iiim  as  agent.  JSfational,  &c.^ 
ciates  become,  in  legal  effect,  partners,  with  Bank  i'.  Landon,  45  N.  Y.  410. 
the  rights  of  partners  to  the  property  In  New  York  it  is  held  that,  except  as 
acquired  by  the  company,  Whipple  v.  otherwise  provided  by  statute,  all  joint 
Parker,  29  Mich.  369.  So  persons  who  stock  associations  are  partnerships,  and  a 
enter  into  articles  of  association  for  bank-  creditor  must  proceed  agains*  the  surviv- 
ing purposes,  and  without  any  charter,  ing  shareholders  before  an  action  can  be 
assume  a  name,  open  a  stock  book,  sub-  maintained  against  the  representatives  of 
scribe  for  shares  of  stock  (a  portion  pay-  a  deceased  shareholder.  Moore  v.  Brink^ 
ing  small  sums  thereon),  hold  meetings,  6  Thomp.  e^'  C.  (N.  Y.)  22;  S.  C,  4  Hun 
elect  directors,  publish  the  names  of  such  402. 

directors  (none  of  whom  take  any  steps  to  So,  where  partners,  intending  to  form  a 

inform  the  public  that  tliey  do  not  belong  corporation,  subscribe  for  stock,  establish 

to  the  association),  enter  into  and  transact  the  business  and  appoint  a  superintend- 

business  as  a  bank,  are  all  liable  as  part-  ent,  they  continue  liable  as  partners  until 

ners.     Pettis  v.  Atkins,  60  111.  454.     See,  the   articles   of   association    are    signed, 

also,  Haslett  v.  Wotherspoon,  2  Rich.  (S.  Martin  r.  Fewell,  79  Mo.  401. 

C.)  Eq.  395.     And    wliere   two  or  more  And  in  Connecticut,  where  persons,  de- 

6 


INTRODUCTORY.] 


COMPANIES. 


6* 


2.  Incorporated   Companies. — Incorporated  companies  are  societies 
consisting  usually  of  *many  persons,  having  transferable  shares 


^6] 


in  a  common  fund,  but  incorporated  by  royal  charter  or  by 


siring  to  secure  provisions  for  themselves 
without  the  costs  of  middlemen,  associate 
themselves  together  without  incorpora- 
tion, open  a  store  under  a  distinguishing 
associate  name,  viz.:  "Bridgeport  Co- 
operative Association,"  and  conduct  the 
business  through  their  own  managers, 
who  are  authorized  to  go  into  the  market 
and  buy  provisions  in  the  associate  name, 
which  are  resold  at  cost  to  the  members 
and  the  public  generally,  the  members  of 
such  association  are  liable,  as  individuals, 
for  goods  so  bought  by  the  managers, 
although  they  never  held  themselves  out 
as  partners,  and  credit  was  not  given  to 
them  as  such,  or  as  individuals.  Davison 
V.  Holden,  10  At!.  Rep.  515. 

The  following  combinations  or  associations 
have  been  held  to  constitute  partnerships  and 
not  corporations  : 

A  joint  stock  company,  formed  for  the 
purpose  of  dealing  in  lands.  Clagett  v. 
Kilbourne,  1  Black  (U.  S.)  346 ;  Kramer 
V.  Arthurs,  7  Pa.  St.  165. 

An  association  of  separate  owners  of 
several  steamboats  into  a  joint  concern, 
to  run  their  vessels  upon  a  certain  river, 
and  to  collect  and  receive  the  earnings  of 
the  boats  in  a  common  fund,  out  of  which 
the  expenses  of  all  the  boats  are  to  be 
paid.  The  Swallow,  01c.  (U.  S.)  Adm. 
334. 

,  An  unincorporated  body  of  men,  asso- 
ciated for  the  purpose  of  banking.  Bois- 
gerard  v.  Wall,  1  Sm.  &  M.  (Miss.)  Ch. 
404. 

A  voluntary  unincorporated  association 
for  manufacturing  purposes,  the  articles 
of  agreement  providing  that  each  stock- 
holder should  pay  a  certain  sum  per  share, 
at  the  time  of  subscribing,  and  all  subse- 
quent assessments,  or  forfeit  his  stock. 
Skinner  v.  Dayton,  19  Johns.  (N.  Y.)  513. 

Members  of  an  unincorporated  associa- 


tion described  as  "  stockholders  "  in  their 
written  agreement,  agreeing  to  take  a  cer- 
tain number  of  "shares"  at  a  certain 
price  per  share  for  the  purpose  of  starting 
a  grocery  store,  supposing  that  their  losses 
were  limited  to  the  amount  of  their  shares. 
Farnum  v.  Patch,  60  N.  H.  294  ;  S.  C, 
49  Am.  Rep.  313. 

When  not  deemed  partners. — On  the 
other  hand,  it  was  held  in  the  New  York 
Court  of  Chancery,  that  where  persons 
held  meetings  and  subscribed  for  stock  in 
a  proposed  corporation  for  running  a  par- 
ticular steamboat,  but  failing  to  obtain  a 
charter  it  was  finally  agreed  to  form  a 
limited  partnership,  but  the  provisions 
of  the  act  in  relation  to  such  partnership 
had  not  been  complied  with,  that  such 
persons  were  not  liable,  as  general  part- 
ners, for  debts  contracted  in  the  mean- 
time by  the  owner  of  the  boat  for  repairs. 
West  Point  Foundry  Assoc,  v.  Brown,  3 
Edw.  (N.  Y.)  Ch.  284. 

In  New  Jersey,  in  the  absence  of  a 
statutory  provision  making  shareholders 
liable  in  case  of  failure  to  comply  with 
the  requirements  of  the  charter,  or  with 
the  requirements  of  the  act  under  which 
the  company  is  incorporated,  persons  who 
have  contracted  with  a  de  facto  corpora- 
tion cannot  deny  its  corporate  existence, 
in  order  to  charge  its  shareholders  indi- 
vidually as  partners.  Stout  v.  Zulick,  7 
Atl.  Rep.  362. 

And  in  Massachusetts,  stockliolders  in 
a  corporation,  doing  business  under  a  de- 
fective organization,  do  not  thereby  become 
partners,  general  or  special,  in  such  busi- 
ness. Fay  V.  Noble,  7  Cush.  (Mass.)  189. 
Nor  are  corporate  stockholders  liable  as 
i:)artners  on  commercial  paper  given  by  the 
treasurer,  merely  because  no  corporate 
business  is  transacted  after  organization, 
nor  because  the  paper  was  given  for  debts 


6*  COMPANIES.  [introductory. 

act  of  parliament.  They  are  not  pure  partnerships,  for  their  members 
are  recognized  as  an  aggregate  body ;  nor  are  they  pure  corporations, 
for  their  members  are  more  or  less  liable  to  contribute  to  the  debts  of 
the  collective  whole.  Incorporated  companies  are  intermediate  be- 
tween corporations  known  to  the  common  law  and  ordinary  partner- 
ships, and  partake  of  the  nature  of  both ;  and  the  law  relating  to  these 
companies  depends  as  well  on  the  principles  which  govern  ordinary 
partnerships  as  on  those  which  are  applicable  to  corporations  strictly 
so  called,  (d) 

The  present  volume  is  confined  to  partnerships  in  the  ordinary 
sense.  Incorporated  companies  and  companies  which,  although  unin- 
corporated, consist  of  numerous  members  and  are  governed  by  special 
statutes  or  by  special  customs,  e.  g.,  Cost  Book  Mining  Companies, 
will  be  dealt  with  in  another  volume. 

wtiich  the  company  was  not  authorized  to  493 ;  S.  C,  39  Am.  Eep.  818. 

contract.   Trowbridge  v.  Scudder,  11  Cush.  {d )  See  the  judgments  in  5  Ch.  431,  732. 

(Mass.)  83.     See,  also.  Ward  v.  Brigham,  As  to  when  corporations  are  persons  within 

127  Mass.  24;  and  Mass.  Dig.,  tit.  "Vol-  the  meaning  of  acts  of  parliament,  see  The 

untary  Association."      So,  also,  the  mem-  Pharmaceutical  Soc.  v.  The  London  and 

bers  of  a  masonic  lodge  are  presumptively  Provincial  Supply  Assoc,  5  Q.  B.  D.  310  ; 

not  partners.     Ash   v.  Guie,  97    Pa.   St.  affirmed,  5  A  pp.  Cas.  857. 


7*] 


BOOK  I. 

OF  CONTRACTS  OF  PARTNERSHIP. 


CHAPTER  I. 


THE  NATURE   OF   THE   CONTRACT   DETERMINED. 


Preliminary  Observations,  *7. 

Section  I. — Of  True  Partnerships,  *10. 

Section  II. — Of  Quasi  Partnerships,  *25. 

Section  III. — Op  Sub-Partnerships,  *48. 

Section  IV. — Of  General  and  Particular  Partnerships,  *49. 

Section  V.— Of  Clubs  and  Societies  Not  Having  Gain  for  Their 

Object,  *50. 
Section  VI. — Of  Co-Ownership,  *51. 


PEELIMINARY   0B3ERVATI0XS. 

Agreement  to  share  profits  the  essence  of  a  partnership. — The  basis 
of  all  partnerships  is  an  agreement  to  share  the  profits  arising  from 
some  business  or  undertaking.  Usually,  but  not  necessarily,  partners 
have  a  joint  capital  or  stock,  by  the  employment  of  which  the  profits 
to  be  shared  are  expected  to  arise ;  and  in  ordinary  partnerships,  but 
not  in  companies,  each  partner  usually  takes  an  active  part  in  the 
prosecution  of  the  partnership  business.  Nothing,  perhaps,  can  be  said 
to  be  absolutely  essential  to  the  existence  of  a  partnership  except  a 
community  of  interest  in  profits  resulting  from  an  agreement  to  share 
them.  But,  although  this  is  so,  the  usual  characteristics  of  an  ordinary 
partnership  are  a  community  of  interest  in  profits  and  losses,  a  com- 
munity of  interest  in  the  capital  to  be  employed,  and  a  community  of 
power  in  the  management  of  the  business  engaged  in. 

Profits  and  losses. — Profits  (or  net  profits)  are  the  excess  of  returns 
over  advances ;  the  excess  of  what  is  obtained  over  the  cost  of  obtain- 
ing it.  Losses,  on  the  other  hand,  are  the  excess  of  advances  over  re- 
turns ;  the  excess  of  the  cost  of  obtaining  over  what  is  obtained. 

9 


7*  SHARING    riiOFlTS.  [bOOK    I., 

Gross  profits.  Mt  profits. — Profits  and  net  profits  are,  for  all  legal 
purposes,  synonymous  expressions ;  but  the  returns  themselves  are 
often  called  gross  profits  ;  hence  it  becomes  necessary  to  call  profits  net 
profits  in  order  to  avoid  confusion.  In  the  *present  treatise, 
-I  however,  the  word  "profits"  will  be  used  in  the  sense  of  net 
profits,  and  the  expression  "gross  profits"  will  be  avoided  as  much  as 
possible. 

Persons  who  share  both  advances  and  returns,  and  also  persons  who 
share  the  difference  between  them,  whatever  that  difference  maybe, 
necessarily  share  both  profits  and  losses ;  profits,  if  the  returns  exceed 
the  advances ;  losses,  if  the  advances  exceed  the  returns.  But  persons 
who  share  profits,  i.  e.,  the  excess  of  returns  over  advances,  do  not 
necessarily  share  losses,  for  profits  may  be  shared  by  those  who  make 
no  advances;  and  persons  may  stipulate  for  a  division  of  gain,  if  any, 
and  yet  some  one  or  more  of  them  may  by  agreement  be  entitled  to  be 
indemnified  against  losses  by  the  others,  so  that  whilst  all  share  profits 
some  only  bear  losses. 

Sharing  gross  returns. — The  actual  or  gross  returns  obtained  by 
advances  obviously  include  profits,  if  profits  have  been  made.  But 
those  returns  do  not  include  losses,  if  losses  are  incurred ;  for  losses 
are  the  excess  of  the  advances  over  the  returns,  and  come  out  of  the 
advances  and  not  out  of  the  returns.  Hence  persons  who  share  gross 
returns  necessarily  share  profits,  but  they  do  not,  by  sharing  the  re- 
turns, share  losses,  for  these  fall  entirely  on  those  making  the  advances. 
Moreover,  although  a  division  of  gross  returns  is  a  division  of  profits, 
if  there  are  any,  it  is  so  only  incidentally,  and  because  such  profits  are 
included  in  what  is  divided;  it  is  not  a  division  of  profits  as  such,  and 
under  an  agreement  for  a  division  of  gross  returns,  whatever  is  re- 
turned must  be  divided,  whether  there  be  profit  or  not. 

On  the  other  hand,  if  the  persons  sharing  gross  returns  also  share 
the  advances  by  means  of  which  the  returns  are  made,  there  is  neces- 
sarily community  both  of  profit  and  of  loss  ;  community  of  profit  if 
the  returns  exceed  the  advances,  community  of  loss  if  the  advances 
exceed  the  returns. 

Distinction  between  sharing  profits  and  gross  returns. — The  above 
remarks  have  appeared  necessary  in  order  to  explain  the  reasons  for 
the  distinction  made  by  English  lawyers  between  agreements  to  share 
profits  {i.  e.,  net  profits  and  profits  as  such)  on  the  one  hand,  and 
agreements  to  share  gross  returns  (sometimes  called  gross  profits)  on 

10 


CHAP.    I.,  §  I.]  CONTRACTS    OF    PART.VER.SHIP.  8*-9* 

the  other;  and  in  order  to  account  for  the  rule  that  whilst  an  agree- 
ment to  share  profits  creates  a  partnership,  an  agreement  to  share  gross 
*returns  does  not.  The  reasonableness,  however,  of  the  above  ^ 
distinction  is  very  questionable,  at  least  where  there  is  any  *- 
community  of  capital  or  common  stock,  and  the  rule  itself  is  probably 
attributable  less  to  the  difference  which  exists  between  net  profits  and 
gross  returns  than  to  the  doctrine  which  so  long  confused  the  whole 
law  of  partnership  in  this  country,  and  according  to  which  all"  persons 
who  shared  profits  incurred  liability  as  if  they  were  really  partners. 
When  this  doctrine  w^as  rife,  the  distinction  between  sharing  net  profits 
and  gross  profits  (i.  e.,  returns)  had  considerable  practical  value,  but^ 
as  will  be  seen  hereafter,  the  doctrine  in  question  is  now  wholly  ex- 
ploded, and  the  distinction  alluded  to  is  of  little  importance. 

Quasi  partnerships. — The  doctrine  to  which  reference  has  been  made 
renders  it  necessary  to  caution  the  reader  against  an  ambigultvin  the 
word  "partnership"  as  used  by  English  lawyers.  Partnerships  are  by 
them  divided  into  partnerships  (properly  so  called)  and  partnerships 
as  regards  third  persons,  which  are  not  in  fact  partnerships  at  all  and 
should  never  be  so  styled.  What  is  called  a  partnership  as  regards 
third  persons  {quasi  partnership)  is  nothing  more  than  a  number  of 
persons  who,  in  consequence  of  certain  acts  done  by  them,  are  held 
liable  for  each  other's  conduct,  as  if  they  had  entered  into  a  contract 
of  partnership  amongst  themselves.  What  these  acts  are  will  be  con- 
sidered hereafter ;  but  the  reader  is  requested  to  bear  in  mind  that  for 
the  present  partnerships  properly  so  called,  and  not  quasi  partner- 
ships, are  intended  to  be  spoken  of. 

Having  made  these  preliminary  observations,  it  is  proposed  to  con- 
sider what  agreements  do  and  what  do  not  result  in  a  partnership  in 
the  proper  sense  of  the  word. 


^^^-,  ^SECTION    I. OF    TRUE    PARTNERSHIPS. 

1 . — Partnership  is  the  result  of  an  agreement  to  share  profits  and  losses. 

Agreements  to    share  profits  and   losses. — Whether  an   agreement 
creates  a  partnersnip  or  not  depends  on  the  ngal  intention  of  the  parties 

11 


10*  COXTEACTS    OF    PARTNERSHIP.  [bOOK    I., 

to  it.  (a)  1  If  the  agreement  is  not  in  writing,  the  intention  of  the 
parties  must  be  ascertained  from  their  words  and  conduct.  If  the 
agreement  is  in  writing,  its  true  construction  must  be  determined  ;  but, 
as  will  be  more  fully  shown  in  a  subsequent  chapter,  even  a  written 
contract  may  be  departed  from  and  modified  by  a  new  verbal  agree- 
ment between  all  the  partners  proved  by  conduct  inconsistent  with  the 
written  document.  (6) 

But  an  agreement  to  share  profits  and  losses  may  be  said  to  be  the 
type  of  a  partnership  contract.  Whatever  difference  of  opinion  there 
may  be  as  to  other  matters,  persons  engaged  in  any  trade,  business  or 
adventure,  upon  the  terms  of  sharing  the  profits  and  losses  arising 
therefrom,  are  necessarily  to  some  extent  partners  in  that  trade,  busi- 
ness or  adventure  ;  nor  is  the  writer  aware  of  any  case  in  which  per- 
sons who  have  agreed  to  share  profits  and  losses  have  been  held  not  to 
be  partners,  (c)  But  it  does  not  follow  that  each  of  several  persons 
who  share  profits  and  losses  has  all  the  rights  which  partners  usually 
have.  For  example,  a  person  may  share  profits  and  losses  and  yet 
have  no  right  actively  to  interfere  with  the  management  of  the  busi- 
ness ;  (d)  or  he  may  have  no  such  right  to  dissolve  as  an  ordinary 
partner  has ;  (e)  or  he  may  have  no  right  *to  share  the  good 
will  of  the  business  on  a  dissolution ;  and  other  instances  of  '- 
restricted  rights  may  be  suggested.  What,  in  any  given  case,  the 
rights  of  a  particular  partner  are  depends  on  the  agreement  into  which 
he  has  entered ;  but  unless  the  word  "partner"  is  to  be  deprived  of  all 

(a)  Mollwo,  March  &  Co.  v.  Court  of  (6)  Infra,  book  III.,  c.  9. 

Wards,  L.  E.,  4   P.    C.   419 ;   Pooley  v.  (c)  In  Mair  v.  Glennie,  4  M.  &  S.  240, 

Driver,  5  Ch.  D.  460;  Walker  v.  Hirsch,  the  expression  "profit  or  loss"  seems  to 

27  Ch.  D.  460 ;  Ross  v.  Parkyns,  20  Eq.  have  been  used  for  gross  returns.    And 

331,  and   other  cases   cited   infra,  p.  13,  in  Geddes  v.  Wallace,  2  Bligh  270,  the 

note  (r).  arrangement  as  to  profit  and  loss  did  not 

1.  Consent  or  intention  essential.—  apply  to  the  person  as  to  whom  the  ques- 

The  relation  cannot  exist  as  between  the  tion  of  partnership  or  no  partnership  was 

parties  without   their   voluntary  consent  raised. 

(Hedge's   Appeal,  63   Pa.  St.   273),  and  id)  As  in  Walker  v.  Hirsch,  27  Ch.  D. 

whether  it  so  exists  or  not  depends  upon  460. 

their  intentions,   as   legally   ascertained.  (e)  See,  as  to  this,  Moore  v.  Davis,  11 

Salter  v.  Ham,  31  N.  Y.  321 ;  Hazard  v.  Ch.  D.  261;  Pawsey  v.  Armstrong,  18  Ch. 

Hazard,  1  Story  (U.  S.)  371 ;  Stevens  v.  D.  698,  in  both  of  which  the  right  to  dis- 

Faucet,  24  111.  483;   Niehoff  t).  Dudley,  solve  was  held  to  exist.     But  ^u.  whether 

40  III.  406 ;  Macy  v.  Combs,  15  Ind.  469  ;  Pawsey  v.  Armstrong  did  not  go  too  far. 
Gray  v.  Gibson,  6  Mich.  300. 

12 


CHAP.  I.,  §  I.]      CONTRACTS  OP  PARTNERSHIP. 


11* 


definite  meaning  its  proper  application  to  persons  who  share  profits  and 
losses  can  hardly  be  questioned.  (/) 

Accordingly,  in  Green  v.  Beesley,  (g)  a  partnership  was  held  to 
result  from  an  agreement  that  the  plaintiff  should  horse  a  mail  cart 
and  be  paid  by  the  defendant  £9  per  mile  per  annum  for  so  doing, 
and  that  the  plaintiff"  and  the  defendant  should  share  the  expenses  of 
repairing  and  replacing  the  carts,  and  the  moneys  received  for  the  con- 
veyance of  parcels,  and  the  losses  occasioned  by  their  loss  or  damage. 

So,  in  Brett  v.  Beckwith,  (h)  a  partnership  was  held  to  exist  between 
underwriters,  one  of  whom  had  agreed  to  take  a  joint  share  of  the 
underwriting  risks  of  the  other,  paying  or  receiving  sums  according  to 
the  result  of  the  accounts. 

These  authorities  are  sufficient  to  show  that  an  agreement  to  share 
profit  and  loss  is  an  agreement  for  a  partnership,  although  the  words 
"partners"  or  "partnership"  do  not  occur  in  the  agreement,  (i)  2 


(/)  See,  however,  the  judgment  of  Cot- 
ton, L.  J.,  in  Walker  v.  Hirsch,  27  Ch.  D. 
460. 

ig)  2  Bing.  N.  C.  108. 

(A)  3  Jur.  (N.  S.)  31,  in  the  Rolls. 

(i)  See,  too,  Greenham  v.  Gray,  4  Ir, 
Com.  L.  Rep.  501. 

2.  Community  of  profit  and  loss. — 
To  constitute  a  partnership  inter  sese,  there 
must  be  an  existing  community  of  inter- 
est and  participation  in  profit  and  loss. 
Felichy  v.  Hamilton,  1  Wash.  (U.  S.)  491. 
And  the  proportion  of  the  profits  each 
partner  is  to  have  must  be  determined, 
Pleasants  v.  Fant,  22  Wall.  (U.  S.)  116. 

Community  of  profits  and  losses  is  the 
true  test  of  partnership.  Where  neither 
element  exists,  there  is  no  partnership. 
Chapman  v.  Lipscomb,  18  So.  Car.  222 ; 
Dils  V.  Bridge,  23  W.  Va.  20. 

A  mere  joint  proprietorship  or  contract 
will  not  constitute  a  partnership,  e.  g.,  a 
joint  and  several  undertaking  between 
two  persons,  such  as  a  guaranty  of  pay- 
ment of  a  bond ;  there  must  be  a  mutual 
interest  in  profit  and  loss.  Ex  parte 
Miller,  1  N.  Y.  Leg.  Obs.  38.  When, 
however,  an  agreement  provides  for  a 
division  of  profits  and  losses  in  a  busi- 

1; 


ness,  and  imposes  upon  the  parties  a 
mutual  duty  to  account,  it  creates  a  part- 
nership. Priest  V.  Chouteau,  12  Mo.  App. 
252.  But  a  mere  agreement  to  share  in 
profits  and  losses  does  not  necessarily 
make  the  parties  partners  inter  sese,  Mc- 
Donald I'.  Matney,  82  Mo.  358.  Although 
it  furnishes  the  usual  test  of  a  partner- 
ship.    Jones  V.  Call,  93  N.  C.  170. 

Where  the  elements  of  joint  expense, 
joint  property,  joint  fund,  joint  losses  and 
joint  profits  are  all  absent,  and  there  is 
no  arrangement  to  share  profit  and  loss, 
there  is  no  partnership,  A  communion 
of  profit  is  of  the  very  essence  of  a  part- 
nership, which  relation  cannot,  in  con- 
templation of  law,  exist  without  it.  Irvin 
V.  Nashville,  &c.,  Ry.  Co.,  92  111.  103.  In 
Georgia,  however,  before  the  passage  of 
section  1890  of  the  code,  there  might  be 
a  partnership  without  a  community  of 
property,  or  agreement  to  share  in  the 
profits  and  losses.  Hughuley  u.  Morris, 
65  Ga,  666. 

It  is  not  requisite  to  the  constitution  of 
a  strict  partnership  that  each  partner 
should,  as  between  themselves,  be  liable 
to  share  indefinitely  in  the  losses  of  the 
concern.     It  is  sufficient  if   they  are  to 


11*  SHARING    I'lM^FITS    AND    LOSSES.  BOOK    I., 

Partnership  not  intended. — Cases  which  present  most  difficulty  are 
those  in  which  persons  agree  to  share  profits  and  losses  and  at  the 
same  time  declare  that  they  are  not  to  be  partners.     The  question  then 

share  in  the  profits  and  in  the  leases,  so  33  Minn.  408) ;  and  also  where  A,  the 
far  as  they  affect  the  capital  advanced,  owner  of  goods  in  New  York,  sold  one- 
Nor  is  it  necessary  that  the  partners  half  of  his  interest  therein  to  B,  who  was 
should  be  proportionate  joint  owners  of  to  go  to  San  Francisco  and  there  dispose 
the  capital.  It  is  enough  that  they  are  of  the  goods  on  joint  account.  Soule  v. 
jointly  interested  in  the  profits  and  losses.  Hayward,  1  Cal.  345. 
Brigham  v.  Dana,  29  Vt.  1.  So,   also,   an   agreement  between    two 

A  contract,  however  obscurely  or  inar-  partners,  on  the  dissolution  of  their  firm, 
tificially  drawn,  by  which  the  parties  that  one  should  take  all  the  goods  on 
agree  to  contribute  merchandise  to  "  a  hand,  and  the  notes  and  accounts  due  the 
certain  concern,"  one  to  be  the  salesman,  firm,  and,  in  consideration  of  the  other's 
the  other  to  pass  as  proprietor,  and  both  interest,  should  pay  all  the  outstanding 
to  share  equally  in  the  expenses  and  debts  and  give  the  other,  "  from  that  time 
profits,  constitutes  a  partnership.  Marks  forward,  one-third  interest  in  the  profits 
V.  Stein,  11  La.  Ann.  509.  arising  from  the  sale  of  said  goods,"  the 

Where,  after  they  become  partners,  the  latter  "  agreeing  to  share  one-third  of  the 
parties  have  a  common  interest  in  the  un-  losses  that  might  accrue  fropi  said  sale  of 
settled  business  of  a  former  concern,  or  in  said  goods,  and  to  act  as  clerk  in  the  sale 
its  profits  and  losses,  they  remain,  inter  of  said  goods "  for  the  former — consti- 
sese,  partners  in  that  business.  McGill  v.  tutes  them  partners  inter  sese.  Scott  v. 
Duwdle,  33  Ark.  311.  Campbell,  30  Ala.  728. 

The  joint  purchase  of  a  threshing  ma-  Instances. — Where  certain  cattle  were 
chine  by  two  persons,  who  give  their  delivered  to  plaintiif  and  two  others,  to  be 
notes  for  the  price,  under  an  agreement  kept  for  a  time,  and  then  to  be  sold  by  de- 
to  work  it  together,  each  furnishing  one-  fendant,  and,  after  deducting  the  first  cost, 
half  the  labor,  and  to  divide  the  profits  defendant  was  to  retain  one-half  of  the  re- 
and  losses  equally,  makes  them  partners,  mainderof  the  proceeds,  the  other  half  to  be 
Aultman  v.  Fuller,  53  Iowa  60.  equally  divided  between  the  plaintiflf  and 

Wliere  two  firms  agree  to  make  con-  the  other  persons — Held,  no  partnership, 
tracts,  in  the  names  of  their  respective  because  there  was  no  community  of  profit 
firms,  for  the  purchase  and  sale  of  goods,  and  loss,  or  of  ownership  in  the  subject  of 
to  be  executed  with  their  separate  funds,  the  contract.  Beckwith  v.  Talbot,  2  Colo, 
and  to  share  profit  and  loss  on  sucli  con-    639. 

tracts,  they  do  not  become  copartners.  Two  firms  in  the  wool  trade  agreed  to 
either  as  between  themselves  or  with  furnish  each  a  stated  proportion  of  a 
respect  to  third  persons.  Smith  d.  Wright,  quantity  of  wool  to  be  sold  to  a  certain 
5  Sandf  (N.  Y.)  113.  vendee,  and  to  share  the  profit  and  loss 

Tlius,  a  partnership  was  held  to  exist  of  the  transaction.  The  contract  to  fur- 
where  a  contract  was  entered  into  between  nish  the  wool  was  made  by  one  of  the 
several  persons  to  buy  eggs  for  a  certain  firms,  and  the  other  was  not  originally  a 
period,  to  pay  for  them  with  funds  con-  party  to  it,  but  the  contracting  firm  after- 
tributed  by  all,  to  store  them  and  sell  wards  applied  to  the  other  firm  for  a  part 
them  on  joint  account,  sharing  equally  of  the  wool  necessary  to  enable  it  to  fill 
in   the   profit  or  loss  (Bohrer  v.  Drake,    the  contract  which  was  furnished  under 

14 


"CHAP.  I.,  §  I.]  SHARING    PROFITS    AXD    LOSSES. 


11* 


arises — AVliat  do  they  really  mean?  If  they  have  in  fact  stipulated 
for  all  the  rights  of  partners,  an  agreement  that  they  shall  not  be  part- 
ners is  a  useless  protest  against  the  consequences  of  their  real  agree- 


the  arrangement  stated  above.  Held,  that 
they  were  not  partners  inter  sese  in  the 
transaction,  and  could  not  jointly  sue  the 
vendee  for  non-fulfillment  of  his  contract. 
Snell  V.  De  Land,  43  111.  323. 

Agreements  relating  to  vessels. — An 
agreement  between  the  owner  of  a  vessel 
and  the  captain  that  each  should  pay  cer- 
tain expenses,  and  divide  the  freight,  with 
a  power  to  the  captain  to  invest  it  on  joint 
account,  constitutes  a  copartnership.  Cox 
■V.  Delano,  3  Dev.  (N.  C.)  L.  89. 

An  association  of  separate  owners  of 
several  steamboats  into  a  joint  concern, 
to  collect  and  receive  the  earnings  of  the 
boats  in  a  common  fund,  out  of  which 
the  expenses  of  all  the  boats  are  to  be 
paid,  is  no  more  than  a  private  copart- 
nership. Each  member  of  the  association 
is  responsible,  individually,  for  his  acts 
or  contracts,  in  the  business  of  the  com- 
mon concern.  The  Swallaw,  01c.  (U.  S.) 
334. 

Agreements  relating  to  land  or  to 
crops. — Joint  purchasers  of  land  intended 
to  be  sold  for  joint  profit,  are  partners. 
Hulett  V.  Fairbanks,  40  Ohio  St.  233; 
Richards  v.  Grinnell,  63  Iowa  44  ;  S.  C, 
-50  Am.  Eep.  727  ;  Canada  v.  Barksdale, 
76  Va.  890. 

So,  an  agreement  between  two  for  the 
joint  purchase  of  land  for  improvement 
and  sale,  where  the  money  was  advanced 
by  one  who  was  to  be  repaid  principal  and 
interest  with  two-thirds  of  the  profits,  the 
loss  to  be  borne  equally,  makes  them  part- 
ners.    Plunkett  V.  Dillon,  3  Del.  Ch.  496. 

A  contract  between  the  owner  of  land- 
warrants  and  a  locator,  to  locate  the  war- 
rants for  a  certain  portion  of  the  lands, 
each  party  to  contribute  a  share  of  the  ex- 
penses, does  not  create  a  partnership  be- 
tween them.  M'Arthur  v.  Ladd,  5  Ohio 
514. 


Where  two  persons  agree  that  one  shall 
furnish  land  and  stock  and  the  other  labor, 
both  to  share  the  expenses  and  the  crop 
equally,  they  are,  inter  sese,  partners.  Holi- 
field  V.  White,  52  Ga.  567.  (Holioway  v. 
Brinkley,  42  Ga.  226  ;  and  Smith  v.  Sum- 
merlin,  48  Ga.  425,  distinguished.) 

Mining  contracts  or  adventures. — 
Two  persons  jointly  interested  in  a  mining 
adventure  are  partners  ;  and  this,  whether 
they  so  agreed  or  not.  Snyder  v.  Burn- 
ham,  77  Mo.  52. 

A  written  agreement,  by  which  defend- 
ant was  to  and  did  receive  of  plaintiff 
$250,  with  which  to  go  to  California  to 
engage  in  gold-digging,  for  two  years, 
during  which  time  his  earnings  were  to  be 
divided  with  plaintiff — Held  to  make  the 
return  of  the  money  advanced  dependent 
upon  the  result  of  the  adventure,  and  thus 
to  constitute  the  parties  joint  adven- 
turers, if  not  strictly  partners.  Brigham 
V.  Dana,  29  Vt.  1. 

Where  two  agree  to  engage  together  in 
a  mining  adventure,  under  a  firm  name, 
and  to  share  the  profits  and  losses  equally, 
and  as  a  firm  they  purchase  a  mine,  pay- 
ing a  note  given  in  the  firm  name  for  a 
portion  of  the  price—Held,  that  the  con- 
tract is  one  of  partnership,  in  the  ordin- 
ary sense  as  distinguished  from  what  is 
known  as  a  "  mining  partnership,"  and 
that  either  partner  has  the  same  authority 
to  bind  the  firm  as  if  it  were  an  ordinary 
trading  partnership.  Decker  v.  Howell, 
42  Cal.  636.  Compare  Dtiryea  v.  Burt,  28 
Cal.  569  ;  Stapletou  v.  King,  33  Iowa  28. 

Agreements  for  capital  on  the  one 
side,  and  labor  on  the  other. — Where 
two  persons  join  together  in  an  adventure 
in  trade,  one  contributing  a  vessel  and  the 
other  his  skill,  labor,  experience,  &c.,  and 
there  is  to  be  a  communion  of  profits  on  a 
fixed  ratio,  the  relation  is  a  partnership. 


15 


11*  CX)NTRACTS    OF    PARTNERSHIP.  [bOOI^    I.^ 

ment.  (A;)  But  a  clause  negativing  a  partnership  may  throw  light  on 
other  clauses  and  rebut  inferences  which  might  be  drawn  from  theiu 
alone.  In  practical  life  such  questions  do  not  arise  in  any  abstract 
form.  Some  definite  dispute  has  to  be  determined,  e.  g.,  liability  to 
^  creditors  *or  the  right  of  one  party  to  the  agreement  to  some 

"^    particular  thing  or  to  some  particular  relief  as  to  which  the 
agreement  itself  is  the  true  guide.  3 

2. — Partnership  is  prima  facie  the  result  of  an  agreement  to  share  profits, 
although  nothing  may  he  said  about  losses,  and  although  there  may 
be  no  common  stock. 

Agreements  to  share  profits  only. — Except  in  cases  specially  provided 
for  by  statute,  an  agreement  to  share  profits,  nothing  being  said  about 
losses,  amounts  prima  facie  to  an  agreement  to  share  losses  also ;  (l) 
for  it  is  but  fair  that  the  chance  of  gain  and  of  loss  should  be  taken 
by  the  same  persons ;  and  it  is  natural  to  suppose  that  such  was  their 

Ward  V.  Thompson,  22  How.  (U.  S.)  330.  (k)  See   Ex  parte  Delhasse,  7  Ch.  D 

B.  P.,  Vandewater  v.  Mills,  19  Id.  82.  511 ;  Moore  v.  Davis,  11  Ch.  D.  261.     See, 

P.  and  L.  agreed  as  follows:    L.  to  fur-  also,  Pooley  v.  Driver,  5  Ch.  D.  460. 

nish  machinery  to  raise  a  sunken  vessel,  3.   Partnership   without   intention. — 

and  P.  the  labor — the  vessel,  when  raised,  An  agreement  pursuant  to  which  all  the 

to  be  sold  by  L.  for  their  joint  account,  L.  parties  interested  furnish  specified  propor- 

to  first  refund  to  P.  the  sums  paid  by  him  tions  of  the  capital,  jointly  own  the  prop- 

for  labor.     Held,  a  partnership,  both  inter  erty  purchased,  which   is  to   be  sold  for 

gese  and  as  to  outsiders.     Lynch  ?;.  Thomp-  their  joint  and   mutual  benefit;  each  to 

son,  61  Miss.  354.  contribute  his  skill  and    assistance,  and 

An  agreement  provided  that  the  party  share  in  specified  proportions  in  the  final 
of  the  first  part  should  obtain  in  his  own  profit  or  loss  of  the  business,  which  are  to 
name,  but  for  the  joint  account  of  himself  be  ascertained  at  the  close  thereof — will 
and  the  parties  of  the  second  part,  a  lease  create  a  partnership,  as  between  the  par- 
of  a  railroad,  and  manage  the  same  at  a  ties  themselves,  although  they  may  not 
designated  salary,  for  their  mutual  bene-  have  been  aware  that  such  was  its  legal 
fit ;  and  that  the  parties  of  the  second  efTect.  Duryea  v.  Whitcomb,  31  Vt.  395. 
part  should  furnish  the  money  necessary  A  joint  undertaking  and  community  of 
to  carry  out  the  enterprise,  to  be  reim-  profit  and  loss  in  the  results  of  the  busi- 
bursed,  with  interest,  out  of  its  annual  ness  will  constitute  a  partnership,  even 
profits ;  and  then  declared  that  after  the  where  each  partner  retains  the  exclusive- 
payment  of  the  capital  thus  invested,  and  ownership  of  the  separate  property  con- 
interest,  the  annual  profits  should  be  tributed  by  him  to  the  use  of  the  firm, 
equally  divided  between  all  the  parties,  McCrary  v.  Slaughter,  58  Ala  230. 
and  that  all  losses  should  be  equally  borne  {I)  Greenham  v.  Gray,  4  Ir.  Com.  L. 
between  them.  Held,  that  the  agreement  Rep.  501 ;  Dry  v.  Boswell,  1  Camp.  330 ; 
constituted  a  partnership.  Beauregard  v.  Hevhoe  v.  Burge,  9  C.  B.  440,  per  Parke,  B. 
Case,  91  U.  S.  134. 

16 


CHAP,  I.,  §   1.]        AGREEMENTS    TO    SHARE    PROFITS. 


12* 


intention  if  tiiey  have  said  nothing  to  the  contrary,  (m)  It  follows 
from  this  that  where  no  statute  interferes,  an  agreement  to  share  profits 
is  prima  facie  an  agreement  for  a  partnership,  and  accordingly  it  has 
been  held  that  unless  an  intention  to  the  contrary  can  be  shown  per- 
sons engaged  in  any  business  or  adventure  and  sharing  the  profits 
derived  from  it  are  partners  as  regards  that  business  or  adventure.  (?i)4 
Community  of  profit  as  a  test  of  partnership. — Indeed,  it  has  often 
been  said  that  community  of  profit  is  the  test  of  partnership,  (o)  This, 
however,  is  not  accurate.  Whether  persons  are  really  partners  or  not 
is  a  question  of  intention,  to  be  decided  by  a  consideration  of  the  whole 
agreement  into  which  they  have  entered,  and  ought  not  to  be  made  to 


(m)  This  prima  facie  inference  was  held 
to  be  excluded  by  the  rules  of  the  build- 
ing societies  which  were  considered  in 
Brownlie  v.  Eussell,  8  App.  Cas.  235,  and 
Tosh  V.  North  British  Build.  Soc,  11 
App.  Cas.  489. 

[n)  See  Puoley  v.  Driver,  5  Ch.  D.  458. 

4.  Agreements  to  share  profits — 
losses  not  mentioned. — Persons  engaged 
in  any  trade,  business  or  adventure,  upon 
the  terms  of  s-haring  the  profits  and  losses 
arising  therefrom,  are  partners  in  that 
trade,  business  or  adventure.  An  agree- 
ment to  share  the  net  profits  necessarily 
implies  a  sharing  of  the  losses.  Wilcox 
V.  Dodge,  12  III.  App.  517. 

An  agreement  to  share  profits  may,  but 
does  not  necessarily,  imply  a  joint  inter- 
est in  property  held  or  used  for  the  pur- 
poses of  the  business  from  which  the 
profits  are  to  arise.  Howe  v.  Howe,  99 
Mass.  71 ;  Meserve  v.  Andrews,  104  Mass. 
360. 

Where  all  the  parties  had,  by  a  contract 
entered  into,  a  right  to  share  in  the  profits 
of  a  business,  and  to  use  the  capital  in- 
vested, and  an  inchoate  title  to  it,  a  part- 
nership exists  between  them.  Vassar  v. 
Camp,  14  Barb.  (N.  Y.)  341. 

A  pool  arrangement  between  the  own- 
ers of  different  steamboats,  whereby  the 
excess  of  net  earnings  of  one  boat  over 
the  other  is  to  be  divided  at  the  end  of 
the  season,  does  not,  alone,  constitute  a 


partnership  so  as  to  create  a  joint  liability 
for  the  negligence  of  either.  Fay  v.  Da- 
vidson, 13  Minn.  523. 

A,  the  owner  of  a  zinc  mine,  agreed  in 
writing  with  B  to  furnish  him  a  certain 
quantity  of  ore  per  annum,  for  three 
years,  for  $10  per  ton.  B  agreed  to  pro- 
vide suitable  buildings  and  machinery  for 
converting  the  ore  into  paints,  &c.,  and  to 
divide  with  A  the  profits  in  the  propor- 
tion of  one-fourth  to  himself  and  the  re- 
mainder to  A  ;  the  cost  of  the  buildings 
and  machinery  to  be  paid  out  of  the  profits 
after  a  specified  ^time.  Held,  that  this 
constituted  a  partnership  between  A  and 
B.     Wadsworth  v.  Manning,  4  Md.  59. 

Where  two  persons  having  goods  con- 
signed to  each  one  separately  for  sale  on 
commission,  entered  into  a  copartnership 
for  the  purpose  of  receiving  and  selling 
goods  on  commission,  and  put  the  goods 
so  consigned  to  each  into  a  common  stock, 
agreeing  to  share  commissions  jointly, 
they  were  held  jointly  liable  as  co- 
partners for  the  proceeds  of  the  separate 
consignments  received  subsequently  to  the 
agreement  of  copartnership,  in  tlie  ab- 
sence of  satisfactory  evidence  that  each 
transacted  business  separately  in  relation 
to  his  separate  consignments.  Dix  v.  Otis, 
5  Pick.  (Mass.)  38. 

(o)  Heyhoev.  Burge,  9  C.  B.  446;  Fox 
V.  Clifton,  9  Bing.  115;  Ex  parte  Lang- 
dale,  18  Ves.  300. 


17 


12^ 


CONTRACTS   OF   PARTNERSHIP. 


[book  I., 


[*13 


turn  on  one  or  two  only  of  the  clauses  in  it,  (p)  A  good  instance  of 
this  is  aft'orded  by  the  Irish  case  of  Barklie  v.  Scott,  (q)  There  a 
father  paid  a  sum  of  money  as  his  infant  son's  share  of  the  capital 
of  a  partnership,  and  it  was  agreed  *that  during  the  sou's 
minority  the  profits  should  be  accounted  for  to  the  father ;  it 
was  held  that  the  father  was  not  himself  a  partner,  that  clearly  not 
being  the  intention  of  the  parties  to  the  agreement. 5 

Servants,  <l«c.,  sharing  profits. — Other  illustrations  of  the  same  prin- 
ciple are  afforded  b.y  those  cases  in  which  managers  and  clerks  are 
paid  salaries  proportionate  to  the  profits  of  the  business  in  which  they 
are  employed.  The  act  28  and  29  Vict.,  c.  86,  which  will  be  noticed 
hereafter,  expressly  provides  for  such  cases  as  these;  but,  independ- 
ently of  that  act,  no  partnership  subsists  between  persons  thus  paid 
and  those  who  paid  them,  where  it  appears  from  the  whole  agreement 
that  a  partnership  was  not  intended.  (/■)  The  observations  on  agree- 
ments to  share  profits  and  losses  (ante  p.  *10)  are  applicable  to  agree- 


(p)  See  ante  p.  *10,  and  the  cases  in  the 
next  note  but  one. 

(q)  1  Huds.  &  Br.  83.  Compare  Keid's 
Case,  24  Beav.  318,  where  the  father  who 
had  transferred  shares  into  his  infant 
son's  name  was  hehl  a  contributory. 

5.  Community  of  profits,  how  far  the 
test. — Although  a  partnership  as  to  third 
persons  may  arise  by  mere  operation  of 
law,  against  the  parties'  intention,  yet,  as 
between  the  parties  themselves,  it  only 
exists  when  such  is  tlieir  actual  intention, 
and,  of  course,  a  mere  participation  of 
profits  will  not  make  the  parties  partners 
infer  sese,  unless  such  is  their  intention. 
Hazard  v.  Hazard,  1  Story  (U.  S.)  371.. 

Sharing  profits  is  not  always  a  test  of 
partnership.  The  liability  of  one  partner 
for  the  contracts  of  another  is  founded  on 
the  relation  they  sustain  of  each  being 
principal  and  also  agent  as  towards  the 
other.     Harvey  v.  Childs,  28  Ohio  St.  319. 

Thus,  an  agreement  between  two  per- 
sons to  share  in  the  profits  of  an  adven- 
ture or  concern  does  not  necessarily  con- 
stitute them  copartners  in  respect  to  the 
concern  or  adventure  from  which  the 
profits   arise.     Eice  v.  Austin,  17  Mass. 


197  ;  Newman  v.  Bgan,  21  N.  H.  (1  Fost.) 
93 ;  Lamb  v.  Grover,  47  Barb.  (N.  Y.)  317. 

Two  or  more  engaged  in  business,  with 
no  mutual  interest  in  the  capital  invested, 
and  no  stipulation  for  mutual  loss,  are  not, 
in  all  cases,  copartners,  though  there  be 
an  agreement  to  share  profits.  Vander- 
burgh V.  Hull,  20  Wend.  (N.  Y.)  70 ;  Pat- 
tison  V.  Blanchard,  5  N.  Y.  186 ;  Fitch  v. 
Hall,  25  Barb.  (N.  Y.)  13 ;  Cummings  v. 
Mills,  1  Daly  (N.Y.)  520;  Loury  r.  Brooks, 
2  McCord  (S.  C.)  421. 

Wliere  the  agreement  for  the  partner- 
ship is  in  writing,  its  terms  must  be  con- 
sidered in  connection  with  the  participa- 
tion in  the  profits,  in  determining  whether 
the  partnership  relation  has  been  estab- 
lished or  not.  Meehan  v,  Valentine,  29 
Fed.  Eep.  276. 

('/•)  Ex  parte  Tennant,  6  Ch.  D.  303 
(where  a  father  claimed  to  be  a  partner 
with  his  son) ;  Ross  v.  Parkyns,  20  Eq.  331 ; 
Bawlinson  v.  Clarke,  15  M.  &  W.  292; 
Stocker  v.  Brocklebauk,  3  Macn.  &  G.  250  ; 
Shaw  V.  Gait,  16  Jr.  C.  L.  397;  Radcliffe 
V.  Rushworth,  33  Beav.  484  (where  there 
was  a  holding  out  and  a  deed  executed  by 
the  alleged  partners,  in  which  they  were 


18 


CHAP.  I.,  §  I.]        AGREEMENTS    TO   SHARE    PROFITS.  13* 

ments  to  share  profits  only,  but  with  this  difference,  viz.,  that  in  the 
latter  case  it  is  easier  than  in  the  former  to  come  to  the  conclusion 
that  a  partnership  was  not  intended  to  be  formed. 

If  the  servant  sharing  profits  has  also  an  interest  in  the  partnership 
capital  or  stock,  this  additional  circumstance  goes  far  to  show  that  a 
j^artnership  was,  in  fact,  intended.  (.s)6 


described  as  carrying  on  business  together). 
See  also,  Geddes  v.  Wallace,  2  Bligh  270. 
In  R.  V.  Macdonald,  7  Jur.  (N.  S.)  1127,  a 
servant  paid  by  a  share  of  profits  was  con- 
victed of  embezzlement,  which  he  could 
not  then  have  been  if  he  had  been  a  part- 
ner. In  Withington  v.  Herring,  3  Moo. 
&  P.  30,  an  agent  paid  by  a  salary  and  a 
share  in  the 'profits  was  thought  to  be  a 
partner,  but  the  question  was  not  decided. 

(s)  See  Reid  v.  Hollinshead,  4  B.  &  C. 
867  ;  Ex  parte  Chuck,  8  Bing.  469  ;  Gil- 
pin V.  Enderby,  5  B.  &  A.  954. 

6.  Clerks,  servants,  &c.,  sharing  pro- 
fits.—In  Parker  v.  Canfield,  37  Conn.  250, 
it  is  said  :  "  Participation  in  the  profits 
of  a  business  is  strong  presumptive  evi- 
dence of  a  partnership  in  it.  This  rule 
and  the  reason  apply  as  well  to  a  party 
who  receives  a  sum  equal  to  a  certain 
share  of  the  profits  of  a  business  as  to  a 
party  receiving  such  share  of  profits  by 
the  nasue  of  profits.  There  are  cases, 
however,  where  money  received  may  ap- 
propriately be  regarded  as  a  sum  measured 
by  profits  rather  than  as  profits  them- 
selves ;  but  whether  it  shall  be  so  regarded 
depends  upon  no  arbitrary  use  of  phrdses, 
but  upon  the  nature  of  the  contract  and 
the  real  consideration  upon  which  the 
money  is  received.  A  share  of  profits 
paid  to  agents  to  secure  exertion  is  not 
such  a  participation  in  profits  as  to  make 
the  agent  liable  as  partner,  and  in  such 
cases  the  money  so  paid  is  spoken  of  as  a 
sum  equal  to  or  measured  by  profits, 
rather  than  as  a  share  in  the  profits  them- 
selves." 

The  principle  there  laid  down  has  been 
reiterated  in  a  great  number  of  cases,  both 


earlier  and  later,  where  employees,  whose 
compensation  was  based  upon  the  profits 
of  the  business,  either  claimed  the  rights 
of  partners,  or  were  sought  to  be  held 
liable  as  such  by  creditors ;  among  others, 
see  Shropshire  v.  Shepperd,  3  Ala.  733 ; 
Hodges  V.  Daws,  6  Ala.  215  ;  Christian  v. 
Crocker,  25  Ark.  327  ;  Hanna  v.  Flint,  14 
Cal.  73;  Le  Favre  v.  Cassagnio,  5  Colo. 
564  ;  Loomis  v.  Marshall,  12  Conn.  69 ; 
Pond  V.  Cummins,  50  Conn.  372 ;  Sankey 
V.  Columbus  Iron  Works,  44  Ga.  228; 
Burton  v.  Goodspeed,  69  111.  237  ;  Price  v. 
Alexander,  2  Gr.  (Iowa)  427  ;  Reed  v. 
Murphy,  2  Gr.  (Iowa)  574;  Holbrooke 
V.  Oberne,  56  Iowa  324;  Shepard  *. 
Pratt,  16  Kan.  209;  Taylor  v.  Sotolingo, 
6  La.  Ann.  154;  Miller  v.  Chandler,  29 
La.  Ann.  88 ;  Chaflraix  v.  Price,  29  La. 
Ann.  176;  Kerr  v.  Potter,  6  Gill  (Md.) 
404  ;  Bull  V.  Schubert,  2  Md.  38  ;  Craw- 
ford V.  Austin,  34  Md.  49  ;  Sangston  v. 
Hack,  52  Md.  173 ;  Turner  v.  Bissell,  14 
Pick.  (Mass.)  192  ;  Blanchard  v.  Coolidge, 
22  Pick.  (Mass.)  151 ;  Bradley  v.  White, 
10  Mete.  (Mass.)  303;  Meserve  v.  An- 
drews, 104  Mass.  360;  Commonwealth  j;. 
Bennett,  118  Mass.  443  ;  Hall  v.  Edson, 
40  Mich.  651 ;  Whitehall  v.  Shickle,  43 
Mo.  538  ;  Campbell  v.  Dent,  54  Mo.  325  ; 
Webb  V.  Leggett,  6  Mo.  App.  345 ;  Mason 
V.  Hackett,  4  Nev.  420 ;  Atherton  v.  Til- 
ton,  44  N.  H;  452;  Smith  v.  Perry,  5 
Dutch.  (N.  J.)  74;  Voorhees  v.  Jones,  5 
Dutch.  (N.  J.)  270;  Metting  v.  Colt,  3 
Halst.  (N.  J.)  Eq.  539;  Hodgman  v. 
Smith,  13  Barb.  (N.  Y.)  302;  Brockway 
V.  Burnap,  16  Barb  (N.  Y.)  309;  Clark  v. 
Gilbert,  32  Barb.  (N.  Y.)  576  ;  Burckle  v. 
Eckhart,   1  Den.  (N.Y.)   337;   3  N.  Y. 


19 


13^ 


AGREEMENTS   TO   SHARE    PROFITS. 


[book  I. 


Partnerships  in  profits  only. — It  is  not,  however,  essential  to  the 
existence  of  a  partnership  that  there  shall  be  any  joint  capital  or  stock. 
If  several  persons  labor  together  for  the  sake  of  gain,  and  of  divid- 
ing that  gain,  tiiey  will  not  be  partners  the  less  on  account  of  their 

132  •    Smith    v.    Bodine,    74    N.    Y.    30 ;  as  should   arise  from   the  profits  of  the 

Eichardson  v.  Hewitt,  76  N.  Y.  55 ;  Mer-  business,  together  with  ten   per  cent,  on 

win   V.   Playford,  3  Eobt.   (N.  Y.)  702;  the  amount  of  sales  of  goods   manufac- 

Benedict  v.  Hettrick,  35  N.  Y.  Superior  tured.     Judson  v.  Adams,  8  Gush.  (Mass.) 

405;    Butler  v.  Finck,  10  N.  Y.  Week.  556.      An   agreement  by  which  A  is  to 

Die.  163;  Miller  v.  Bartlett,  15  Serg.  &  furnish  B  a  stock  of  goods,  and  pay  B  for 

R.  (Pa.)  137;    Dunham  v.  Eogers,  1   Pa.  selling  them  a  sum  equal  to  a  certain  part 

St.    255;    Norwent   v.    Hull,    1    Humph,  of  the  net  profits,  the  goods  to  remain  the 

(Tenn.)    320;    Bell   v.  Hare,    12   Heisk.  exclusive   property  of  A,  and  B  to  have 

(Tenn.)615;  Good  i'.  McCartney,  10  Tex.  no  interest  therein.     Partridge  v.  King- 

193  ;    Cothran    v.    Marraaduke,    60   Tex.  man,  130  Mass.  476.     A  contract  between 

370;  Ambler  D.  Bradley,  6  Vt.  119 ;  Mor-  the  former  owner  of  a  business  and  his 

gan  V.  Stearns,  41    Vt.  405 ;  Sodiker  v.  successor,  by  which  the  former  agrees  to 

Applegate,  24  W.  Va.  411 ;  S.  C,  49  Am.  work  for  the  latter  for  a  salary  equal  to 

Eep.  252  ;  Nicholaus  v.  Thielges,  50  Wis.  one-half  the  net  profits  of  the  business, 

491.  each  to  pay  one-half  of  the  outstanding 

Illustrations  of  the  rule. — In  apply-  indebtedness.     State  v.  Donnelly,  9  Mo. 

ing  this  principle  it  lias   been  held  that  App.  519.     An    agreement  by  which  an 

the   following   agreements   did    not   give  agent  for  the  sale  of  land,  employed  A  to 

rise   to   the    partnership   relation  :      An  assist  him  in  effecting  a  sale,  and  agreed 

agreement  by  a  laborer  with  a  land-owner  to  pay  him  one-half  his  commission,  if  he 

to  work  on  the  land  for  a  certain  propor-  procured  a  purchaser.     Wass  v.  Atwater, 

tion  of  the  crop,  the  land-owner  to  furnish  33  Minn.  83.     An  agreement  between  A 

team,    implements,   &c.      Gardenhire    v.  and  B,  whereby  A  was  to  receive  twenty 

Smith,  39  Ark.  280.     An  agreement  be-  per    cent,    net    of    all    claims    collected 

tween  a  master  and  the  owner  of  a  vessel,  against  the  United  States,  and  B  fifty  per 

that  the  latter  should  receive  two-fifths  of  cenU  for  collecting.     Logic  i.  Black,  24 

the  net  earnings  of  the  vessel  for  her  hire.  W.  Va.  1. 

Eeynolds  r.  Toppan,  15  Mass.  370.     An  So,  also,  seamen,  employed  in  the  whale 

agreement   between  A  and  B,  by  which  fishery,  are  usually  compensated  by  a  cer- 

A  was  to  supply  B  with  stock  to  be  man-  tain  proportion  of  the  profits  of  the  voy- 

ufactured  into  cloth,  at  his  mill,  on  A's  age,  but  they  are   not   partners  with  the 

account,  and  B  was  to  manufacture  the  ship-owners,  so  that  their  creditors  can 
stock  into  cloth,  and  to  deliver  the  same  attach  the  cargo  of  oil  for  their  private 
to  A,  for  a  certain  sum  per  yard  ;  A  also    debts.      Rice   v.   Austin,    17    Mass.    206 ; 


engaging  that  if  B  should  fulfill  his  en- 
gagement above  stated,  to  pay  him  one- 
third  of  tlie  net  profits  of  the  business. 
Denny  v.  Cabot,  6  Mete.  (Mass.)  82.  A 
contract    bv   which   A   agreed    with    B  to 


Baxter  v.  Eodman,  3  Pick.  (Mass.)  435 ; 
Holden  v.  French,  68  Me.  241.  See,  also, 
Coffin  V.  Jenkins,  3  Story  (U.  S.)  108. 
And  a  partnership  relation  between  the 
master  and  mate  of  a  vessel  is  not  estab- 


maiuifactiire  certain  articles  for  B  from  lished  by  proof  that  the  mate  shipped  for 
materials  to  be  furnished  by  the  latter,  a  share  of  the  profits,  unattended  by  other 
and  B  agreed  to  pav  therefor  such  amount    circumstances  and  without  proof  of  what 

20 


CHAP.  I.,  §  I.]  CONTRACTS    OF    PARTNERSHIP.  14* 

laboring  with  their  own  tools.  Thus,  in  Froiuont  v.  Coupland,  (t)  two 
•  persons  who  horsed  a  coach  and  divided  the  profits  *were  held 
-■  to  be  partners,  although  each  found  his  own  horses,  and  the 
other  had  no  property  in  them. 

So,  in  French  v.  Styring,  (u)  where  two  co-owners  of  a  race-horse 
agreed  to  share  its  winnings  and  the  expenses  of  its  keep,  although 
there  was  some  doubt  as  to  whether  they  were  partners  or  not,  the 
court  had  no  hesitation  in  admitting  that  they  might  have  been  part- 
ners in  tlie  profits,  although  not  in  the  horse  itself,  {x) 

The  ordinary  agreement  between  publishers  and  authors,  to  the 
effect  that  the  author  shall  contribute  the  manuscript,  and  the  pub- 
lisher shall,  in  the  first  instance,  defray  the  expenses  of  publication, 
and  repay  himself  out  of  the  proceeds  of  the  sale  of  the  work,  and 
that  then  the  profits  shall  be  divided,  furnishes  another  instance  of  a 
partnership  confined  to  profits  only.  (3/) 

Again,  it  frequently  happens  that  one  person  has  property  and 
another  skill,  and  that  they  agree  that  the  latter  shall  have  the  con- 
trol of  the  property  for  the  benefit  of  both,  and  that  the  profits  shall 
be  divided.  In  such  cases  it  may  be  difficult  to  say  whether  a  part- 
nership is  or  is  not  created.  In  Stocker  v.  Brocklebank,  (z)  it  is  clear 
that  no  partnership  was  intended  and  none  was  created ;  in  the  Irish 
case  of  Greenham  v.  Gray,  (a)  it  was  thought  that  the  whole  agree- 
ment could  only  receive  a  reasonable  construction  by  holding  a  part- 
nership to  exist,  and  a  partnership  was  held  to  exist  accordingly, 

that  share  was  to  be.     The  Crusader,  1  4  Id.  656 ;  Wilson  v.  Whitehead,  10  M.  & 

Ware  (U.  S.)  448.     But  a  partner  may  be  W.  503 ;    Gale  v.  Leckie,   2  Stark.  107  ; 

entitled  to  a  salary,  if  it   is  so   agreed.  Venables  v.  Wood,  3  Ross  L.  C.  on  Com. 

Stimpson  I).  Green,  13  Allen  (Mass.)  326,  L.  529.     This  last  case  is  an  authority  for 

332.  See  Brigham  v.  Clark,  100  Mass.  430.  the  proposition   that  authors  and  publish- 

(i)  2  Bing.  170.     See,  too,  Lovegrove  v.  ers  are  not  partners  at  all,  and  qu.  whether 

Nelson,  3  M.  &  K.  1.  this  is  not  the  correct  doctrine? 

(w)  2  C.  B.  (-N.  S.)  357  ;  noticed  again        (z)  3  Macn.  &  G.   250.     The  servant 

infra,  p.  18.  claimed  a  right  to  take  an  active  part  in 

(x)  See,  also.  Steel  v.  Lester,  3  C.  P.  D.  the  management  of  the  business.     So,  in 

126.     The   dictum  in   Syers   v.   Syers,    1  Walker  v.  Hirsch,  27  Ch.   D.  460.      In 

App.  Cas.  181,  to  the  effect  that  a  partner-  Pawsey  v.  Armstrong,  18  Ch.  D.  698,  the 

ship  in  profits   is  a  partnership   in    the  clerk  shared  losses  as  well  as  profits,  but 

assets  by  which  they  are  made  is  by  no  qu.  whether  he  was  entitled  to  all  he  got? 
means  universally  true.     See  infra,  note        (a)  4  Ir.  Com.  L.  Rep.  501.     The  real 

(6).  truth  here  seems  to  have   been   that  the 

iy)  See  Gardiner  v.  Childs,  8  C.  &  P.  plaintiff  intended  to  create  a  partnership, 

345 ;  Reade  v.  Bentley,  3  K.  &  J.  271,  and  whilst  the  defendant  did  not. 

21 


15*  AGREEMENTS  TO   SHAEE   PROFITS.  [bOOK   I.^ 

although  the  *mills,  aud  machinery,  and  buildings,  by  means 
of  which  the  business  was  carried  on,  clearly  belonged  to  one    '- 
partner  only. 

Other  instances  of  partnership  in  profits,  although  there  is  no 
community  of  interest  in  the  capital  or  stock  producing  them,  will 
be  noticed  when  the  subject  of  partnership  property  is  examined.  (6)7 


(6)  In  Meyer  v.  Sharpe,  5  Taunt.  74,  the 
distinction  between  an  interest  in  profits 
and  an  interest  in  the  goods  by  the  sale  of 
which  those  profits  were  to  be  produced 
was  held  to  be  clear  and  manifest.  See, 
too,  Smith  V.  Watson,  2  B.  &  C.  401. 

7.  Sharing  profits  in  return  for  prop- 
erty or  capital  supplied. — Where  two 
agree  that  each  shall  furnish  a  horse  to 
do  certain  work,  one  to  do  the  work  and 
the  other  to  pay  the  expenses,  and  divide 
the  earnings  equally,  this  will  constitute 
a  partnership.  Gillbank  v.  Stevenson,  31 
Wis.  592. 

So,  also,  the  following  contracts  have 
been. held  to  have  that  effect:  An  agree- 
ment pursuant  to  which  three  parties  in- 
trust the  investment  and  management  of 
a  certain  sum  from  a  common  fund  in  an 
enterprise  to  one  of  them,  with  a  stipula- 
tion that  they  shall  share  equally  in  the 
profits  after  deducting  the  amount  of  the 
investment.  Harris  v.  Hillegass,  5  Pac. 
C.  L.  J.  240.  An  agreement  under  which, 
in  consideration  that  A  furnished  timber, 
capital,  and  all  his  time  in  the  manufac- 
ture of  shingles,  he  was  to  have  interest, 
and  two-thirds  of  the  net  profits,  while  B 
was  to  have  one  third.  Wells  v.  Babcock, 
56  Mich.  276.  An  agreement  by  A  and 
his  wife  with  B,  to  work  on  the  latter's 
farm,  all  sharing  jointly  in  the  proceeds 
of  the  joint  labor.  Plummer  v.  Trost,  81 
Mo.  425.  An  arrangement  between  A  and 
B  for  buying  and  selling  on  their  joint 
account,  in  the  name  of  A  and  B,  a  certain 
quantity  of  pork,  by  which  A  was  to  fur- 
nish whatever  money  should  be  necessary 
in  the  business,  aside  from  such  advances 
as  might  be  procured  on  said  pork,  and  B 


was  to  attend  personally  to  the  purchase 
and  shipment,  and  out  of  the  proceeds  of 
the  sale,  after  deducting  the  costs,  ex- 
penses and  disbursements  of  every  kind, 
A  was  to  be  reimbursed  the  amount  ad- 
vanced by  him,  with  interest,  and  the 
residue,  being  the  net  profits,  was  to  be 
equally  divided  between  them.  Miller  v. 
Price,  20  Wis.  117. 

While  the  following  agreements  were 
held  not  to  give  rise  to  the  partnership 
relation  :  A  writing  :  "  Received  of  G. 
$2000,  to  invest  in  wool,  said  G.  to  receive 
two-thirds  of  the  net  profits  on  the  sale  of 
the  wool,  and  O.  one-third.  (Signed)  O."' 
Euddick  v.  Otis,  33  Iowa  402.  A  con- 
tract whereunder  a  manufacturer  is  sup- 
plied with  stock  and  materials  which  are 
to  continue  the  property  of  the  capitalist 
by  whom  they  are  furnished,  although  it 
is  stipulated  that  the  party  who  carries  on 
the  business  shall  ultimately  receive  any 
surplus  which  may  remain  after  reimburs- 
ing their  cost  to  the  party  furnishing 
them,  with  interest  or  a  percentage  of 
profit  by  way  of  compensation  for  his 
capital.  Emmons  v.  Westfield  Bank,  97 
Mass.  230.  An  agreement  by  which  de- 
fendant was  to  furnish  the  buildings,  ma- 
chinery, power  and  capital,  and  plaintiff 
was  to  perform  the  labor  necessary  for 
manufacturing  raw  material  of  a  certain 
kind,  which  could  be  purchased  at  a  cer- 
tain place  by  plaintiff,  at  a  price  not  ex- 
ceeding the  ruling  market  price  at  a  cer- 
tain other  place ;  that  such  contract 
should  terminate  at  a  specified  time ;  that 
defendant  should  make  all  sales  of  the 
manufactured  article,  and  collect  the  pay 
therefor ;  and  that  he  should  pay  to  plain- 


22 


CHAP.  I.,  §  I.]        AGREEMENTS   TO   SHARE    PROFITS. 


15* 


3. — Partnership  is  prima  facie  the  result  of  an  agreement  to  shan 
profits,  although  community  of  loss  is  stipulated  against. 


Sharing  profits,  but  not  losses. — Persons  who  agree  to  share  the 
profits  of  an  adventure  in  which  they  engage  are  prima  facie  part- 


tiff,  as  compensation  for  his  services,  a 
certain  proportion  of  the  net  profits  which 
should  be  realized.  Boyce  v.  Brady,  61 
Ind.  432.  An  arrangement  between  two 
persons,  whereby  one  delivers  to  the  other 
certain  hay,  which  the  latter  agrees  to 
transport  to  another  market,  and  there 
sell  the  same,  if  he  can,  at  not  less  than  a 
given  price  per  ton,  of  which  he  is  to  re- 
ceive a  specified  sum  per  ton  for  his 
freight  and  trouble,  and  to  pay  over  the 
balance  to  the  other  party  ;  and  if  he  sells 
at  a  higher  price  than  the  minimum 
price  named,  the  exce&s  is  to  be  divided 
equally  between  them ;  and  if  he  fails  to 
make  sale  he  is  to  store  the  hay  for  the 
other  party,  and  to  wait  for  his  freight  till 
the  hay  is  sold.  Morrison  v.  Cole,  30 
Mich.  102. 

So,  also,  where  one  party  was  to  furnish 
money  and  the  other  was  to  buy  cattle 
with  it  for  the  market,  and  tiie  party  fur- 
nishing the  money  was  to  have  his  capital 
returned,  with  five  per  cent,  interest  there- 
on, together  with  one-half  the  profits  on 
the  sale  of  the  cattle,  the  parties  were 
held  not  partners,  as  the  one  furnishing 
the  money  was  exposed  to  no  hazard  of 
loss.     Adams  v.  Funk,  53  111.  219. 

Taking  profits  in  lieu  of  rent. — In 
New  Jersey,  an  agreement  by  a  landlord 
with  his  tenant  to  take  a  share  of  the  pro- 
fits of  the  demised  premises,  by  way  of 
rent,  does  not  constitute  a  partnership  be- 
tween them,  so  as  to  prevent  an  action  at 
law  by  the  landlord  against  the  tenant  for 
the  rent.  Perrine  v.  Hankinson,  11  N.  J- 
L.  (6  Halst.)  181.  So,  also,  in  Tennessee, 
one  hiring  or  renting  property — a  still, 
tubs,  &c.,  in  this  case— may  contract  for 
speculative  compensation ;    and  this  will 


not  constitute  him  a  partner.  England  v. 
England,  57  Tenn.  108.  And  in  North 
Carolina,  it  is  expressly  provided  by  stat- 
ute that  landlord  and  tenant  shall  not 
be  regarded  as  partners  because  of  an 
agreement  under  which  the  landlord  is  to 
receive  a  share  of  the  crop.  Where, 
therefore,  the  landlord  furnishes  the  land 
and  teams,  and  tiie  tenant  the  laborers 
and  provisions  for  them,  the  gross  product 
to  be  divided  without  any  account  of  ex- 
penditures made  by  either — Held,  that  an 
agricultural  partnership  is  not  created. 
Day  V.  Stevens,  88  N.  C.  83 ;  S.  G.,  43  Am. 
Rep.  732. 

The  following  agreements  between  land- 
lord and  tenant  have  been  held  not  to 
render  the  parties  to  them  partners :  An 
agreement  to  manage  a  farm  furnished  by 
another,  and  to  share  the  crops.  Tayloe 
V.  Bush,  75  Ala.  432.  An  agreement  by 
which  the  owner  of  land  employs  a  crop- 
per to  cultivate  it  on  shares,  the  owner 
reserving  possession  of  the  crop  until  his 
advances  to  the  cropper  shall  be  repaid. 
Gurr  V.  Martin,  73  Ga.  528.  A  contract 
that  the  lessor  of  a  hotel  should  receive 
one-tenth  of  the  gross  receipts  for  rent. 
McDonnell  v.  Battle  House  Co.,  67  Ala. 
90;  S.  C,  42  Am.  Rep.  99.  An  arrange- 
ment under  which  one  "  hires  the  use"  of 
another's  building  from  day  to  day,  and 
keeps  it  as  a  hotel,  paying  the  owner  daily 
a  sum  "  equal  to  one-third  of  the  gross  re- 
ceipts and  gross  earnings."  Beecher  v. 
Bush,  45  Mich.  188 ;  S.  C,  40  Am.  Rep. 
465.  Renting  a  saloon  for  half  the  profits 
of  the  business.  Thayer  v.  Augustine,  55 
Mich.  187  ;  S.  C  ,  54  Am.  Rep.  361. 

On  the  other  hand,  the  parties  to  the  fol- 
lowing contracts  were  held  to  be  partners : 


23 


15*  AGREEMEXTS   TO   SHARE    PROFITS.  [bOOK    I., 

ners,  altliough  they  stipulate  that  they  will  not  be  liable  for  losses 
beyond  the  siinis  they  engage  to  subscribe,  (c) 

Stipulations  against  community  of  loss. — The  inference  that  where 
there  is  comnuinlty  of  profit  there  is  a  partnership  is  so  strong  that 
even  if  community  of  loss  be  expressly  stipulated  against,  partnership 
may  nevertheless  subsist.  In  Coope  v.  Eyre,  {d)  Lord  Loughborough 
is  rci)orted  to  have  said:  ''In  order  to  constitute  a  partnership,  com- 
munion of  profits  and  loss  is  essential."  But  there  is  nothing  to 
prevent  one  or  more  partners  from  agreeing  to  indemnify  the  others 
against  loss,  or  to  prevent  full  effect  from  being  given  to  a  contract 
of  partnership  containing  such  a  clause  of  indemnity,  (e)  8 

Contracts  of  loan  compared  with  contracts  of  partnership  without 
community  of  loss. — The  true  effect  of  such  a  complex  agreement 
would,  it  is  apprehended,  be  to  entitle  each  of  the  partners  to  a  share 

A  contract  by  which  T.  and  wife  deliver        (d)  1  H.  BI.  48. 

a  stock  farm  to  L.,  for  a  term  of  years,  to        (e)  See  Bond  v.  Pittard,  3  M.  &  W.  357  ; 

improve  ;  L.  to  have  one-third  of  the  pro-  Geddes  v.  WaUace,  2  Bligh  270. 
fits,  and  to  pay  no  rent;  to  carry  on  the        8.  Stipulations    against    community 

farm  as  he  pleases;  the  current  expenses  of  loss.— It  has  been  held  that  while  the 

to  be  paid  by  the  concern,  and  six  per  perception  of  profits  renders  one  liable  as  a 

cent,  interest  to  be  allowed  on  advances  partner  to  third  persons,  the  partners  may 

by  either  party.     Tibbatts  v.  Tibbatts,  6  stipulate,  as  between  themselves,  that  one 

McLean  (U.  S.)  80.     An  agreement  under  of  them  shall  not  be  liable  for  the  debts 

which  A  was  to  furnish  land  and  an  outfit,  of  the  firm.     Pollard  v.  Stanton,  7  Ala. 

while  B  was  to  hire  laborers  and  superin-  761.  S.iich  a  stipulation  is  valid  as  between 

tend  the  farm  during  the  year;  A  also  agree-  the  partners.     Consolidated  Bank  v.  State, 

ing  to  provide  money  to  carry  an  the  busi-  5   La.    Ann.  44.     Other   cases,  however, 

ness,  half  of  which  was  to  be  repaid  to  some  of  them  quite  recent,   hold  other- 

him,  and  the  profits  to  be  divided  between  wise ;  thus,  where  an  agreement  was  made 

them.     Reynolds  v.  Pool,  84  N.  C.  37  ;  S.  between  several  persons  that  each  would, 

C,  37  Am.  Eep.  607.     And  in  Georgia  it  upon  his  own  account  and  with  his  own 

is  held  that  an  agreement   between  two  funds,  conduct  a  store  ;  that  each  was  to 

parties  to  carry  on  a  particular  business,  bear  his  own  loss,  but  whatever  profit  was 

in  which  real  estate  belonging  to  one  of  made  by  either  should  be  equally  divided 

them  is  to  be  used,  will  be  deemed  to  con-  among  all,  it  was  held  not  to  be  a  partner- 

stitute  a  partnership,  if  the  owner  of  the  ship    either  inter  sese  or  as  to   outsiders 

real  estate  is  to  be  compensated  for  its  use  knowing  the  character  of  the  connection, 

by  a  percentage  of  the  profits  of  the  busi-  Jordan  v.  Wilkins,  3  Wash.  (U.  S.)  110.   S. 

ness.      And  it  is  immaterial  that  in  the  P.,  Mayrant  ?;.  Marston,  67  Ala.  453.    And 

written  contract  between  the  parties  such  see,  also,  Gill  v.  Ferris,  82  Mo.  156,  where 

compensation  is  described  as  rent.     Dal-  a  recipient  of  one-third  of  the  profits,  and 

ton  City  Co.  v.  Dalton  Manuf.  Co.,  33  Ga.  who  was  not  bound  by  any  of  the  losses, 

243.  was  held  not  to  be  a  partner, 
(c)  Brown  v.  Tapscott,  6  M.  &  W.  119. 

24 


CJHAP.  I.,  §  I.]  CONTRACTS    OF    PARTXERSHIP. 


15* 


of  the  excess  of  the  returns  over  the  advances,  Avhile  some  of  the 
partners  would  be  entitled  to  be  indemnified  by  the  others  for  all 
losses  beyond  the  advances.  If  this  were  not  the  result  of  the  agree- 
ment, and  if  the  persons  indemnified  were  indemnified  not  only 
against  losses  beyond  the  advances,  but  also  *against  the  loss 
^  of  the  advances  themselves,  the  contract  would  lose  its  charac- 
ter of  a  contract  of  partnership,  and  become  a  contract  of  loan.  (/)  9 


(/)  See  Pothier,  Contrat  de  Soci^t^,  §§ 
21,  22.  Compare  Pooley  v.  Driver,  5  Ch. 
D.  458,  noticed  infra,  ^  2. 

9.  Lender  to  the  firm,  when  deemed 
a  partner. — The  distinction  stated  by  the 
learned  author  may  be  illustrated  by  ref- 
erence to  the  following  decisions  : 

In  Newbrau  v.  Snieder,  1  W.  Va.  153, 
A  gave  money  to  B  to  enable  the  latter  to 
purchase  sheep,  with  the  understanding 
that  he  was  to  have  half  the  profits,  but  to 
have  no  interest  on  his  money  if  there 
were  losses,  A  declaring  to  a  witness  that 
he  and  B  were  partners.  It  was  held 
that  the  transaction  did  not  constitute  a 
loan,  but  that  the  parties  were  partners 
as  to  the  whole  subject  in  controversy. 

In  Leggett  v.  Hyde,  58  N.  Y.  272,  H 
loaned  to  the  firm  ©f  P  &  Co.  12000,  to 
be  used  in  the  business  for  one  year, 
under  an  agreement  that  he  was  to  receive 
one-third  of  the  profits,  which  were  to  be 
settled  half-yearly,  and  at  the  end  of  the 
year,  if  he  did  not  conclude  to  become  a 
partner,  he  was  to  be  repaid  his  $2000 
out  of  the  concern.  It  was  held  that  the 
money  so  invested  was  used  by  the  firm 
for  the  benefit  of  H  ;  that  he  had  an  in- 
terest in  the  profits  as  such,  not  as  a  meas- 
ure of  compensation,  but  as  a  result  of 
the  capital  and  industry ;  and  that  as  to 
the  creditors  of  the  firm,  he  was  a  partner, 
and  jointly  liable  with  the  others  for  the 
partnership  debts. 

On  the  other  hand,  in  Gollop  v.  New- 
man, 7  Pick.  (Mass.)  282,  where  one  ad- 
vanced money  to  the  owners  of  a  vessel 
and  cargo,  on  their  promise  to  pay  him  a 


share  of  the  proceeds  of  the  voyage  in  pro- 
portion to  the  sum  advanced,  he  was  held 
to  have  no  property  in  the  cargo  by  virtue 
of  the  contract,  either  as  a  partner  or  ten- 
ant in  common. 

The  following  agreements,  cflso,  were  held 
not  to  constitute  the  parties  to  them  partners: 

An  agreement  by  A  to  furnish  money 
to  B  to  conduct  business,  and  B  to  let  A 
have  goods  at  cost.  Slade  v.  Paschal,  67 
Ga.  541. 

An  agreement  between  manufactTirers 
and  a  banker,  whereby  the  latter  was  to 
furnish  the  former  money  wherewith  to 
manufacture  as  many  articles  as  they 
might  think  safe  and  profitable,  they  to 
return  to  him,  in  any  event,  his  advances, 
and  if  the  adventure  proved  profitable, 
one-third  of  the  profits  in  lieu  of  interest 
on  the  money  loaned ;  but  no  provision 
was  made  for  his  bearing  any  expense  or 
loss,  nor  any  time  fixed  for  the  termina- 
tion of  the  adventure.  Lintner  v.  Millikin, 
47  111.  178. 

An  agreement  under  seal,  that  A  will 
lend  B  a  certain  sum  of  money  for  a  year, 
and  endorse  B's  note  for  a  further  sum  if 
A  shall  think  that  the  business  requires 
the  use  of  such  further  sum,  A  to  receive, 
by  way  of  compensation,  ten  per  cent,  of 
the  profits  of  the  business,  and  in  addi- 
tion, two  per  cent,  for  each  additional 
$1000,  but  A  to  have  the  right  at  all 
times  to  inspect  the  accounts.  Boston  & 
Colorado  Smelting  Co.  v.  Smith,  13  R.  I. 
27  ;  S.  C,  43  Am.  Rep.  3.  See,  also,  Cul- 
ley  v.  Edwards,  44  Ark.  423 ;  S.  C,  51 
Am.  Rep.  614. 


25 


16*  CONTRACTS    OF    PARTNERSHIP.  [bOOK    I.^ 

Usurious  loans  confounded  with  jMrtnerships. — Whilst  the  laws- 
against  usury  were  in  force,  a  tendency  was  sometimes  manifested  to 
treat  what  was  in  truUi  a  loan  at  usurious  interest  and  therefore  illegal, 
as  a  contract  of  partnership  and  therefore  legal,  (^r)  This  view  of  the 
transaction  had  the  merit  of  apparently  holding  the  parties  to  their 
bargain ;  but  in  truth  the  bargain  to  which  they  were  held  was  very 
different  from  that  which  they  themselves  had  contemplated ;  and  by 
treating  such  transactions  as  partnerships,  and  not  as  loans,  an  amount 
of  confusion  was  introduced  into  this  branch  of  the  law  which  even 
the  repeal  of  the  usury  laws  failed  to  remove.  The  leading  cases  on 
this  subject  are  Gilpin  v.  Enderby(A)  and  Fereday  v.  Hordern.  (i) 
They  decided  that  a  loan  of  money  on  the  terms  that  the  lender  should 
share  the  profits  of  the  borrower  rendered  the  lender  liable  to  third 
pei-sons,  as  if  he  were  a  partner  with  the  borrower ;  and  that  by  reason 
of  such  risk  the  loan  was  not  usurious.  The  judgments  in  these  cases 
show  that  the  borrower  and  lender  were  regarded  by  the  court  as  part- 
ners inter  se. 

These  cases,  however,  cannot  now  be  relied  upon ;  for,  as  will  be 
seen  hereafter,  the  mere  foct  that  a  lender  of  money  shares  profits  wath 
tlie  borrower  will  not  make  the  lender  liable  as  a  partner  ;  and  as 
between  the  borrower  and  the  lender  the  question  of  partnership  or  no 
partnership  turns  on  the  real  agreement  between  them,  (k)  10 

Dormant  partners. — At  the  same  time,  even  now  a  person  who  is 
really  a  partner,  although  dormant  (i.  e.,  a  partner  taking  no  part  in 
the  management  of  the  partnership),  will  be  treated  as  such,  although 

{(j)  See  Bloxham  v.  Pell,  cited  2  Wm.  firm's  net  profits  over  and  above  $10,000, 

Bl.  999  ;  and  compare  Morse  v.  Wilson,  but,  if  tlie  firm's  net  profits  did  not  exceed 

4  T.  E.  353,  and  7  Byth.  Conv.  (2d  ed.)  $iO,000,  then  to  merely  pay  interest  on 

163.  the   sum   loaned,   was    construed    to    be 

(A)  5  B.  &  A.  954.  merely  a  contingent  promise  to  pay  more 

(i)  Jac  144  ;  see,  also,  Ex  parte  Briggs  than  usual  interest,  and  not  to  constitute 

and  Ex  parte  Notley,  3  D.  &  Ch.  367.  such  third  person  a  partner  in  the  firm. 

{k)  See  the  cases  of  servants  sharing  Meehan  v.  Valentine,  29  Fed.  Rep.  276. 
profits,  an/e  pp.  12,  13.  So,  also,   in   Lord   v.  Proctor,  7  Phil. 

10.  Usurious  loans. — In  a  recent  case  (Pa.)  630,  a  loan  made  for  two  years, 
decided  in  the  United  States  Circuit  Court  with  interest  payable  quarterly,  at  a  rate 
for  the  Eastern  District  of  Pennsylvania,  above  six  per  cent.,  and  to  be  made  equal 
a  written  contract  by  which  a  firm  agreed,  to  one-fourth  of  the  profits  of  the  borrow- 
in  consideration  of  $10,000  loaned  by  a  er's  business  at  the  end  of  the  term,  was 
third  person,  to  pay  one  year  from  date,  held  not  to  constitute  the  lender  a  partner 
to  such    third   person,  one-tenth  of   the  with  the  borrower. 

2(3 


CHAP.  I.,  §  I.]        DORMANT  PARTNERS.  17* 

he  may  have  endeavored  to  conceal  his  true  character  under  the  cloak 
of  being  a  mere  lender  of  money.  (/)  Whether  a  person  *ad-  ^ 
vancing  money  and  sharing  profits  is  a  creditor  or  a  dormant  ^ 
partner  is  often  a  very  difficult  matter  to  determine,  and  can  only  be 
decided  by  a  careful  study  of  the  whole  agreement  between  the  bor- 
rower and  the  lender,  and  especially  by  examining  what  rights  are 
conferred  on  or  taken  from  the  person  making  the  advance.  The 
right  of  a  lender  is  to  be  repaid  his  money  with  such  interest  or  share 
of  profits  as  he  may  have  stipulated  for  ;  and  his  right  to  a  share  of 
profits  involves  a  right  to  an  account  and  to  see  the  books  of  the  bor- 
rower, unless  such  right  is  expressly  excluded  by  agreement.  If, 
however,  a  lender  stipulates  for  more  than  this  (e.  g.,  for  a  right  to 
control  the  business  or  the  employment  of  the  assets,  or  to  wind  up 
the  business),  or  if  his  advance  is  risked  in  the  business,  or  forms  part 
of  his  capital  in  it,  he  ceases  to  be  a  mere  lender  and  becomes  in  effect 
a  dormant  partner.  In  illustration  of  these  remarks,  reference  may 
be  made  to  Mollwo,  ]March  &  Co.  v.  Court  of  Wards  (m)  on  the  one 
hand,  and  Pooley  f.  Driver  (n)  on  the  other,  (o)  In  l)oth  there  was 
an  advance  of  money  and  a  stipulation  for  a  share  of  profits ;  and  in 
both  the  lender  had  unusual  powers ;  but  in  the  former  case  the  court 
came  to  the  conclusion  that  a  loan  on  security  was  all  that  was  really 
intended ;  whilst  in  the  latter  the  court  considered  that  the  lender  was 
reallv  a  dormant  partner,  although  he  had  done  his  best  to  avoid  the 
liabilities  incident  to  that  position.  H 

(/)  See  Pooley  v.  Driver,  5  Cli.  D  458,    ship  be  universally  unknown.     It  is  suffi- 
noticed  infra,  |  2.  cient  if  he  is  not  an  ostensible  partner. 

(m)  L.  K.,  4  P.  C.  419.  Metcalf  v.  Officer,  2  Fed.  Kep.  640. 

(n)  5  Ch.  D.  45S.  "Secret  partnership"  means,  in  com- 

(o)  They  are  referred  to  more  at  length    men  usage,  where  the  existence  of  certain 
hereafter  in  section  2.  persons  as  partners  is  not  made  known  ta 

11.  Definition  of  "  dormant  part-  the  public  by  any  of  the  partners,  in  Con- 
ner."—In  one  case  it  is  held  that  a  dor-  tradistinction  to  open  or  notorious  part- 
mant  partner  is  one  whose  name  is  not  nership.  Where  one  partner  publicly 
mentioned  in  the  title  of  the  firm,  or  em-  avows  all  the  partners  so  that  they  become 
braced  in  some  general  term,  as  "  com-  and  are  known  as  such,  and  credit  is 
pany,"  "  sons,"  &c.  (Jones  v.  Fegely,  4  obtained  thereby,  it  is  no  longer  a  secret 
Phii.  (Pa.)  1;  see,  also,  Waite  v.  Dodge,  partnership,  whether  the  firm  be  carried 
34  Vt.  181),  while  in  another  it  is  said  on  in  the  name  of  one  partner  only,  or 
that  a  partner  is  not  to  be  deemed  dormant  otherwise.  United  States  Bank  v.  Bin- 
because  his  name  does  not  appear  in  the  ney,  5  Mason  (U.  S.)  176. 
firm  style,  nor  is  it  necessary  to  constitute  Liability  of  dormant  or  secret  part- 
one  a  dormant  partner  that  his  member-    ner. — Such  a  partner  is  liable  for  all  the 

27 


17*  CONTRACTS    OF    PARTNERSHIP.  [bOOK   I., 

4. Partnership  is  not  the  result  of  an  agreement  to  share  gross  returns. 

Sharing  gross  returns.— AXi\\owg\\,  as  has  been  already  pointed  out, 
those  who  share  gross  returns  share  profits,  if  any  there  be,  for  gross 
returns  include  profits,  and  although  at  common  law  an  agreement  to 
share  profits  is  prima  facie  an  agreement  for  a  partnership,  yet  it  has 
long  been  held  that  a  partnership  is  not  the  result  of  an  agreement  to 
share  gross  returns,  (p) 

If  several  persons  make  advances  for  a  common  object  and  agree  to 
share  the  gross  returns  in  proportion  to  their  advances,  *this 
-I  does  not  create  such  a  community  of  interest  in  profit  or  loss 
as  to  make  such  persons  partners.  Thus,  in  Gibson  v.  Lupton,  (5) 
where  two  persons  joined  in  the  purchase  of  wheat  with  the  intention 
of  paying  for  it  and  dividing  it  equally,  it  was  held  that  they  were  not 
partners.  So,  if  two  workmen  agree  to  divide  their  wages,  that,  per 
se,  does  not  make  them  partners,  (r) 

Co-owners  sharing  gross  returns. — But  the  strongest  illustrations  of 
tliis  doctrine  are  afforded  by  those  cases  in  which  co-owners  of  chattels 
divide  the  earnings  of  the  chattel.  The  distinction  between  co-owners 
and  copartners  will  be  noticed  hereafter,  but  as  an  instance  in  which 
co-owners  have  been  held  not  to  be  partners^  although  they  agreed  to 
divide  the  returns  obtained  by  the  use  or  employment  of  the  thing 
owned,  reference  may  be  made  to  French  v.  Styring.  (s)  There  the 
plaintiff  and  defendant  were  entitled  in  common  to  a  race-horse.     It 

firm  debts  contracted  during  his  connec-  ing  capital  is  clearly  a  partner ;  and  is 

tions  with  it.     Lea  v.  Guice,  21  Miss.  656  ;  such  as  to  third  persons,  even  though  it 

Lindsey  v.  Edmiston,  25  111.  359  ;  Bige-  be  stipulated  that  the  capital  so  furnished 

low  V.  Elliott,  1  Cliff.  (U.  S.)  28.     He  is  should  be  regarded   as  a  loan,  and  the 

liable  on  a  firm  note,  independent  of  any  party  furnishing  it  a  mere  creditor, 

charge  or  proof  of  a  fraudulent  collusion  As  to  who  will  be  deemed  a  dormant 

between    the    partners     to     conceal    his  partner  as  towards  creditors  of  the  firm, 

liability.     Bradshaw  v.  Apperson,  36  Tex.  see,  also,  Gilmore  v  Merritt,  62  Ind.  525. 

133 ;  St.  Armand  v.  Long,  25  La.  Ann.  (p)  See  the  preliminary  remarks,  ante 

167.     If  he  was  interested  in  some  only  pp.  *8,  *9. 

of  the  transactions  of  the  concern,  he  is  (9)  9  Bing.  297.    See  further,  as  to  joint 

responsible  for  a  transaction  at  which  he  purchasers.  Cooper  v.  Eyre,  1  H.  Bl.  37  ; 

is  shown   to  have  been  present,  and  in  and   Hoare  v.  Dawes,  1  Doug.  371,  and 

which   he   participated.     Lindsey  v.  Ed-  post  §  6. 

miston,  supra.  (r)  See  Finckle  v.  Stacey,  Sel.  Cas.  in 

In  Parker  v.  Canfield,  37   Conn.   250,  Ch.  9. 

the  rule  is  laid  down   that  one  who  re-  (s^  2  C.  B.  (N.  S.)  357. 
ceives  profits  in  consideration  of  furnish- 

28 


CHAP.  I.,  §  I.]  CONTRACTS   OF   PARTNERSHIP. 


18' 


was  agreed  that  the  plaintiif  should  keep,  train,  and  have  the  manage- 
ment of  the  horse,  that  thirtj-five  shillings  a  week  should  be  allowed 
for  the  expenses  of  his  keep,  that  the  plaintiff  should  pay  the  expenses 
of  entering  the  horse  and  conveying  him  to  the  different  races,  and 
that  one-half  of  the  horse's  keep  and  other  expenses,  and  his  winnings, 
should  be  equally  divided  between  the  plaintiff  and  the  defendant. 
This  agreement  was  held  not  to  create  a  partnership.  It  was  no  more 
a  partnership  than  if  two  tenants  in  common  of  a  house  had  agreed 
that  one  of  them  should  have  the  general  management  and  provide 
funds  for  necessary  repairs,  so  as  to  render  the  house  fit  for  the  habi- 
tation of  a  tenant,  and  that  the  net  rent  should  be  divided  amongst 
them  equally.  (^) 

So,  where  two  persons  were  respectively  lessee  and  manager  of  a 
theatre,  and  they  shared  the  gross  receipts  equally,  the  manager  pay- 
ing the  expenses  out  of  his  share,  it  was  held  that  no  partnership 
subsisted  between  them,  (w)  12 


(<)  See  the  judgment  of  Willes,  J.,  2  C. 
B.  (N.  S.)  366. 

(u)  Lyon  v.  Knowles,  3  B.  &  S.  556. 

12.  Sharing  gross  returns  does  not 
constitute  partnership. — The  weight  of 
authority  in  this  country  is  in  harmony 
with  the  principles  laid  down  in  the  text, 
as  will  be  seen  by  reference  to  the  deci- 
sions collated  below,  in  each  of  which  the 
existence  of  the  partnership  relation  was 
held  not  to  exist : 

Where  an  agreement  was  made  between 
two  that  one  should  furnish  a  farm  with 
a  certain  amount  of  teams  and  labor,  and 
the  other  manage  the  farm  and  give  cer- 
tain labor,  the  crops  to  be  divided  between 
them.  Blue  v.  Leathers,  15  111.  31.  S.  P., 
Moore  V.  Smith,  19. Ala.  774. 

Where  A  and  B,  attorneys,  agreed  to  do 
L's  law  business  free  from  charge,  except 
for  board  and  traveling  expenses  outside 
the  county,  and  L  agreed  to  get  and  turn 
in  to  A  and  B  all  law  business  that  he 
could  control,  fees  to  be  divided  two-thirds 
to  A  and  B,  one-third  to  L.  Heshion  v. 
Julian,  82  Ind.  576. 

Where  two  agree,  the  one  to  furnish  a 
brick-yard,  equipped  for  work,  and  the 


other  to  supply  materials  and  labor  for 
making  bricks,  the  same  to  be  divided  be- 
tween them  when  made,  without  making 
any  agreement  to  share  profits  and  losses. 
La  Mont  v.  Fullam,  133  Mass.  583.  S.  P., 
Clark  V.  Smith,  52  Vt.  529 ;  Flint  v.  Eureka 
Marble  Co.,  53  Vt.  669. 

Where  one  was  to  furnish  a  circular 
saw  mill,  and  men  and  horses  to  work  it, 
and  another  to  furnish  the  logs,  and  feed 
for  the  hands  and  horses,  the  lumber  to 
be  equally  divided  between  them.  Stoal- 
lings  V.  Baker,  15  Mo.  481. 

Where  two  firms  agree  to  share  com- 
missions on  sales  of  goods  forwarded  by 
one  to  the  other.  Pomeroy  v.  Sigerson, 
22  Mo.  177. 

Where  grain,  received  at  a  mill  as  toll, 
was  mixed  up,  and  became  the  subject  of 
traffic  between  the  parties,  each  being 
part  owner,  and  interested  in  the  proceeds 
of  the  sale.  Benson  v.  M'Bee,  2  McMull. 
(S.  C.)  91. 

Where  one  party  furnished  a  boat,  and 
the  other  sailed  it,  under  an  agreement  to 
divide  the  gross  earnings.  Bowman  v. 
Bailey,  10  Vt.  170. 

Where   a  contractor  for  carrying   the 


29 


19*  UNCO>'CLUDED    AGREEMENTS.  [bOOK    I., 

Wages  jMcyable  by  a  share  of  prodace. — Again,  in  whaling  voyages 
the  sailors  are  usually  paid  a  ^certain  proportion  of  the  pro-  p^^Q 
duce  of  the  oil  obtained,  but  even  Ixifore  the  act  of  28  and  29  '- 
Vict.,  c.  86,  they  were  not  therefore  partners,  either  with  each  other 
or  with  their  employers,  (.r)  In  such  cases  as  this,  partnership  was 
clearly  not  intended  ;  and  even  when  persons  who  shared  profits  were 
held  to  incur  liabilities  as  if  they  were  partners,  it  was  held  that  per- 
sons who  merely  divided  gross  returns  did  not  incur  any  such  liabili- 
ties, (y)  A  fortiori  it  was  impossible  to  regard  them  as  partners  interr 
se.  The  act  of  28  and  29  Vict.,  c.  86,  which  will  l^e  noticed  hereafter, 
renders  this  even  clearer  than  before.  13 

5. — Partnership  is  not  the  result  of  an  agreement  which  is  not  concluded. 

Unconcluded  agreements. — In  order  that  partnership  may  result 
from  any  agreement,  it  is  necessary  that  the  parties  to  the  agreement 
shall  have  mutually  assented  to  the  same  propositions ;  otherwise 
there  is  no  contract  at  all,  but  merely  a  treaty  from  which  each  party 
is  at  liberty  to  retire.  If,  therefore,  A  proposes  to  B  that  a  partner- 
ship shall  be  formed  between  them  on  certain  terms,  and  B  either  does 
not  accept  the  proposal  or  accepts  it  on  other  terms  than  those  offered, 
A  and  B  are  not  yet  agreed  and  no  partnership  subsists  between  them. 
Nor  is  B  bound  by  his  qualified  acceptance;  for  that  is  merely  a 
counter  offer  on  his  part  which  lie  is  at  liberty  to  retract  until  A  has 
assented  to  all  its  terms  without  qualification. 

mail  agreed  with  a  subcontractor  that  he  355,  where  the  captain  was  to  be-  paid  a 

should  perform  one-half  the  service,  and  sum  equal  to  twelve  per  cent,  on  the  net 

be  entitled  to  one-half  the  compensation,  proceeds,    after     deducting    certain    ex- 

Wilkiuson  v.  Jett,  7  Leigh  (Va.)  115.  penses.     He  brought  an  action  for  what 

There  are  decisions,  however,  that  hold  was  due  to  him,  and  recovered,  but  no 

the  contrary  doctrine,  viz.:    that  sharing  question  of  partnership  arose.     Some  of 

in  tlie  gross  proceeds  of  a  business  creates  the  customs  established  amongst  whalers 

the  partnership  relation.     Fail  v.  McKee,  will  be  found  in  Fennings  v.  Grenville,  1 

36  Ala.  61 ;  Musierr.Trumpbour,  5  Wend.  Taunt.  241,  where  it  was  held  that  one  of 

(N.  Y.)  275 ;  Ludlow  v.  Cooper,  4  Ohio  St.  two  tenants  in  common  of  a  whale  could 

1.    See,  also,  Mr.  Parsons' remarks  on  this  not  maintain  trover  against  his  cotenant 

^subject,  and  his  very  interesting  note  upon  for  half  of  the  blubber,  &c.,  yielded  by 

it.     Pars,  on  Part.  *88,  and  note  q.  the  whale. 

(x)  Mair  v.  Glennie,  4  M.  &  S.  240 ;  (y)  Post  ?  2. 

Wilkinson  f.  Frazier,  4  Esp.  182;  and  see  13.  For  cases   relating  to  the   lay  or 

Parrott  I).  Bryant,  2  Y.  &  C.  Ex.  61.     Seei  share   of  seamen   in   the   proceeds   of  a 

also,  Stavers   v.  Curling,  3   Bing.   N.  C.  voyage,  see  supra,  p.  *13,  note  6. 

30 


€HAP.  I.,  §  1.]  CONTRACTS    OF    PARTNERSHIP.  19* 

There  are  many  decisions  illustrating  these  principles,  but  they 
relate  more  particularly  to  agreements  to  take  shares  in  comj^anies, 
and  it  is  unnecessary  to  consider  them  here,  {z) 

*Cases  in  which  there   is   no  contract,  because  there   has 

*^^J  never  been  a  mutual  assent  to  the  same  terms,  must  not  be 
confounded  with  cases  in  which  a  valid  contract  has  been  entered  into, 
but  which,  being  conditional,  and  not  having  been  performed  on  the 
one  part,  is  not  binding  on  the  other.  These  will  be  considered 
hereafter.  14 

6. Partnership  is  not  the  result  of  an  agreement  to  share  profits  so 

long  as  anything  remains  to  be  done  before  the  right  to  share  them 
accrues. 

Contemplated  partnerships.— It  is  important  to  distinguish  between 
actual  and  contemplated  partnerships.     Persons  who  are  only  contem- 

(z)  See  the  next  page.  In  McClean  v.  the  first.  Taylor  v.  Penny,  5  La.  Ann.  7. 
Kennard,  9  Ch.  336,  an  agreement  to  be-  So,  also,  an  advance  of  money  to  one  en- 
come  partners  with  executors  was  held  to  gaged  in  business,  and  which  was  used  by 
create  a  partnership  with  those  only  who  him  for  the  purchase  of  goods,  does  not 
proved.  create  a  partnership,  although   made  in 

14.  Unconcluded  agreements. — As  anticipation  of  a  future  partnership, 
between  the  partners  themselves,  the  ulti-  which  is  never  consummated.  Hubbell 
mate  facts  whence  a  partnership  is  de-  v.  Woolf,  15  Ind.  204.  Accordingly, 
duced  are,  first,  the  agreement,  and,  sec-  where  A  advanced  money  to  B,  to  be  used 
ond,  its  execution;  there  can  be  no  part-  in  his  business,  taking  his  notes  therefor, 
nership  between  parties,  so  far  as  they  under  an  agreement  that  A  might  become 
solely  are  concerned,  without  a  consent  an  equal  partner  with  B,  considering  the 
thereto  and  fulfillment  thereof.  Grooves  sums  advanced  as  contributions  to  the 
V.  Tollman,  8  Nev.  178.  capital  of  the  firm,  if  on  further  exami- 

Inler  sese,  a  partnership  can  commence  nation  A  should  so  desire,  and  B  carried 
only  by  the  voluntary  contract  of  the  on  the  business  as  his  own,  drawing  more 
parties  ;  and  when  once  formed,  no  third  than  half  the  profits  therefrom,  and  cred- 
person  can  be  afterwards  introduced  into  iting  A  on  the  books  with  interest  on  the 
the  firm  as  a  partner  without  the  concur-  notes,  and  A,  seeing  tiie  interest  credited, 
rence  of  all  the  parties  who  compose  the  claimed  that  he  was  a  partner,  and  should 
original  firm.  Freeman  v.  Bloomfield,  43  receive  half  the  profits,  but  no  interest, 
Mo.  391.  Therefore,  where  one  buys  a  and  B  still  continued  to  credit  A  with  jn- 
stranded  vessel,  and  agrees  to  give  another  terest,  and  to  treat  the  business  as  entirely 
an  interest  therein,  tlie  latter  has  no  inter-  his  own — in  a  suit  on  the  notes,  it  was 
est  he  can  transfer  without  the  former's  held,  in  Massachusetts,  that  no  partner- 
consent.  It  is  an  agreement  to  take  in  a  ship  was  ever  formed.  Morrill  v.  Spurr, 
partner,  and  gives  the  second  party  no  9  N.  E.  Eep.  580. 
right  to  impose  an  unknown  partner  on 

31 


20=*= 


CONTIIACTS    OF    PARTNERSHIP. 


[book  I., 


plating  a  future  partnership,  or  who  have  only  entered  into  an  agree- 
ment that  they  will  at  sonic  future  time  become  partners,  cannot  be 
considered  as  partners  before  the  arrival  of  the  time  agreed  upon,  (a) 
It  is  not  always  easy  to  determine  whether  an  agreement  amounts  to 
a  contract  of  partnership  or  only  to  an  agreement  for  a  future  partner- 
ship. The  test,  however,  is  to  ascertain  from  the  terms  of  the  agree- 
ment itself  whether  any  time  has  to  elapse  or  any  act  remains  to  be 
done  before  the  right  to  share  profits  accrues ;  for  if  there  is,  the  par- 
ties will  not  be  partners  until  such  time  has  elapsed  or  act  has  been 
performed.  (6) 

The  general  principle  that  so  long  as  an  agreement  to  form  a  part- 
nership is  executory  no  partnership  is  formed,  applies  as  Avell  to 
ordinary  partnerships  as  to  projected  companies,  and  it  Avill  be  useful 
to  consider  it  with  reference  to  each  inturn.l5 


(a)  Per  Parke,  J.,  in  Dickinson  v.  Valpy, 
10  B.  &  C.  141,  142. 

(6)  See,  in  addition  to  the  cases  cited 
below,  Drennen  v.  London  Ass.  Co.,  6 
Davis  Sup.  Ct.  Kep.  25 ;  Osborne  v.  Jul- 
lion,  3  Drew.  596,  where  the  partner- 
ship (?)  depended  on  the  result  of  experi- 
ments. 

15.  Contemplated  partnerships;  ex- 
ecutory agreements. — While  a  valid 
partnership  may  be  contracted,  to  take 
effect  at  a  future  time,  or  on  the  happen- 
ing of  a  certain  event,  or  t-he  performance 
of  certain  conditions  (Avery  v.  Lauve,  1 
La.  Ann.  457),  yet,  usually,  the  event 
must  take  place  or  the  conditions  be  per- 
formed before  the  firm  obtains  a  legal 
existence.  Thus,  proof  of  an  agreement 
between  two  partners  that  upon  tlie  death 
of  one  of  them  his  brother  should  become 
a  partner  in  the  firm,  and  be  entitled  to  a 
share  of  the  profits,  is  not  sufficient  to 
establish  a  partnership.  Brink  v.  New 
Amsterdam  Fire  Ins.  Co.,  5  Eobt.  (N.  Y.) 
104.  So,  also,  where  by  an  agreement  be- 
tween the  owners  of  a  steamboat  and  a 
third  person,  the  latter  was  to  run  the 
boat,  and  the  proceeds  were  to  be  applied, 
first,  to  the  expenses  of  the  boat ;  second, 
to  the  insurance ;  third,  in  a  certain  sum 


to  the  owners ;  and,  lastly,  the  surplus  to 
be  divided  among  the  parties — it  was  held 
that  the  partnership  was  not  to  commence 
until  the  first  three  claims  were  satisfied  ; 
and  that  until  then  the  third  party  was 
merely  the  bailee  of  the  boat.  Ward  v, 
Thompson,  Newb.  (U.  S.)  Adm.  95.  See- 
also,  Haile  v.  York,  27  Wis.  209. 

But  the  condition  upon  which  the  rela- 
tion depends  must  be  a  precedent  one  to 
have  this  effect ;  if  subsequent,  its  non- 
fulfillment will  not  annul  the  partnership 
contract.  Murray  v.  Johnson,  1  Head 
(Tenn.)  353.  Thus,  where  a  firm  takes- 
in  a  new  partner,  by  a  written  instrument 
signed  by  the  old  members  and  the  new, 
which  recites  the  payment  of  a  certain 
sum  by  the  incoming  partner,  and  con- 
veys to  him  one-third  interest  in  t'h& 
assets,  and  consents  that  he  shall  have  a 
third  interest  in  the  profits,  the  new  part- 
nership is  complete  on  the  execution  of 
the  instrument,  notwithstanding  it  may  be 
agreed  that  an  accoimt  of  the  stock  shall 
be  taken,  and  if  it  exceeds  a  certain  sum^ 
the  new  partner  shall  pay  one-half  of 
that  sum.  Phillips  v.  Nash,  47  Ga.  218. 
And  it  may  be  said  that  the  existence  of 
a  partnership  does  not  depend  upon  the 
fact  that  each  partner  has  in  all  things- 


32 


CHAP.  I.,  §  I.]  CONTEMPLATED    PARTNERSHIP.  20* 

(a)  Application  of  the  principle  to  ordinary  partnerships. 

Option  to  become  a  partner. — It  is  not  unusual  for  a  person  who  con- 
templates joining  another  in  business  to  agree  that  such  business  shall 
be  carried  on  upon  certain  terms  not  themselves  creating  a  partnership, 
♦and  to  stipulate  for  an  option  to  become  a  partner  either  at  a  ^^^ 
specified  time,  or  at  any  time  the  person  having  the  option 
may  choose.  Such  agreements,  if  bona  fide,  and  not  mere  colorable 
schemes  for  creating  a  partnership,  and  at  the  same  time  concealing 
it,  (c)  do  not  create  a  partnership  until  the  person  having  the  option  has 
exercised  it,  and  elected  to  become  a  partner.l6 


complied  with  his  agreement.  If  the 
contract  has  been  made,  property  and 
labor  contributed,  and  the  partnership 
business  commenced,  there  is  a  partner- 
ship until  legally  dissolved.  Hartman  v. 
Woehr,  3  C.  E.  Gr.  (N.  J.)  383. 

Still,  there  must  be  nothing  inchoate 
about  the  partnership,  or  it  will  not  be 
liable  to  creditors ;  it  must  become  com- 
plete before  it  has  a  legal  existence  even 
as  to  third  persons.  Irwin  v.  Bid  well,  72 
Pa.  St.  244. 

To  impose  such  a  liability  there  must  be, 
in  addition  to  the  agreement  to  share  profits 
and  losses,  an  entering  upon  some  business 
thereunder.     Lucas  v.  Cole,  57  Mo.  143. 

In  other  words,  the  partnership  agree- 
ment must  not  be  an  executory  contract. 
Thus,  a  mere  promise  to  "go  halves"  in 
a  purchase  of  land,  if  not  carried  into 
effect,  does  not  make  the  promisor  a  part- 
ner, so  as  to  bind  him  to  pay  a  note  exe- 
cuted by  the  grantee  in  both  of  their 
names,  for  improvements  thereon.  Huck- 
abee  v.  Nelson,  54  Ala.  12.  And  an  ad- 
vance of  money  to  one  engaged  in  busi- 
ness, and  which  is  used  by  him  for  the 
purchase  of  goods,  does  not  create  a  part- 
nership, although  it  may  be  made  in  an- 
ticipation of  a  future  partnership,  which 
is  never  consummated.  Hubbell  v.  Woolf, 
15  Ind.  204.  For  further  illustrations  of 
this  principle,  see  Reboul  v.  Chalker,  27 
Conn.  114;  Haskins  v.  Burr,  106  Mass. 
48;  Strong  v.  Place,  4  Robt.  (N.  Y.)  385. 


Where,  however,  it  is  clear  from  the 
articles  that  the  parties  contemplate  an 
immediate  commencement  of  business  as 
a  firm,  the  failure  of  one  of  them  to  pay 
in  his  part  of  the  capital,  as  agreed,  does 
not  render  him  any  the  less  a  partner  as 
of  the  date  of  the  execution  of  the  articles. 
Southern  White  Lead  Co.  v.  Haas,  33  N. 
W.  Rep.  657.  S.  P.,  Grady  v.  Robinson, 
28  Ala.  289.  See,  also,  Aspinwall  v. 
Williams,  1  Ohio  84;  Austin  v.  Williams, 
2  Id.  64 ;  Crary  v.  Williams,  2  Id.  65. 

(c)  See  Courtenay  v.  WagstafF.  16  C.  B. 
(N.  S.)  110. 

16.  Option  to  become  a  partner. — 
Where  a  proposed  partnership,  evidenced 
by  a  letter,  contemplates  in  its  terms  but 
one  transaction,  at  the  conclusion  of  which 
the  profits  are  to  be  divided,  and  the  let- 
ter making  the  offer  sets  a  limit  on  the 
quantity  of  stock  to  be  purchased,  pre- 
scribes that  it  be  bought  on  a  joint  credit, 
and  requires  that  when  purchased  it  shall 
be  sent  by  particular  persons  to  be  sold  in 
a  particular  market,  under  the  supervision 
of  the  party  making  the  offer,  and  the 
party  receiving  the  letter  so  acts  as  to  ful- 
fill none  of  the  requirements  contained  in 
it,  there  is  no  partnership,  and  in  the 
event  of  loss,  the  party  receiving  the  offer 
cannot  maintain  a  bill  for  an  accounting 
as  partners  and  contribution.  Metcalf  v. 
Redman,  43  111.  264. 

Where  A  contracted  with  a  company  to 
assume  control  of  its  affairs  when  satisfied 


33 


21*  CONTRACTS  OF  PARTNERSHIP.  [bOOK  I., 

A  strong  illustration  of  this  is  afforded  by  Ex  parte  Davis,  (d)  where 
a  creditor  had  a  right  to  nominate  himself  as  a  partner  with  his  debtor 
but  had  not  exercised  the  right. 

Again,  in  Gabriel  v.  Evill,  (e)  it  was  agreed  between  the  defendant 
and  two  others  that  the  defendant  should  enter  into  partnership  with 
them,  and  bring  in  £1000  in  cash  and  £1000  in  goods,  and  that  the 
partnership  should  date  retrospectively  from  the  1st  of  January ;  but 
the  defendant  reserved  to  himself  the  option  of  determining  at  any 
time  within  twelve  months  from  that  day  whether  he  would  become  a 
partner  or  not.  The  defendant  advanced  the  £2000,  and  several  other 
acts  w^ere  done  in  execution  of  the  agreement;  but  within  the-twelve 
months  the  defendant  declared  his  option  not  to  become  a  partner,  and 
it  was  held  that  he  never  did  in  fact  become  one,  and  that  he  had  not 
incurred  any  liability  as  if  he  had.  (/) 

In  Price  v.  Groom,  (^c)  a  debtor's  business  was  carried  on  by  hun 
under  an  inspectorship  deed,  which  authorized  the  trustees  to  carry  on 
the  business  themselves,  and  to  take  the  profits,  if  they  chose.  Their 
interest  in  the  profits,  however,  did  not  commence  until  the  debtor's 
interest  determined  ;  and  it  was  held  that  whilst  he  carried  on  the 
business  there  was  no  part*nership  between  him  and  them, 
-I    they  and  he  not  being  entitled  to  the  profits  at  the  same  tmie. 

Share  not.  yd  taken.— In  Howell  v.  Brodie,  (A)  the  defendant,  intend- 
ing to  become  a  partner  in  a  scheme  for  making  and  letting  out  a 
market  place,  advanced  considerable  sums  of  money,  and  ultimately, 
on  the  completion  of  the  market,  took  one-seventh  share  in  it.  It  was 
sought  to  make  him  liable  for  the  expense  of  erecting  the  market,  on 

that  its  business  was  profitable,  and  to  ad-  (e)  9  M.  &  W.  297,  and  Car.  &  Marsh, 
vance  money  to  enable  tlie  company  to  fill  358.  See,  too.  Ex  parte  Turqnand,  2  M., 
its  orders,  that  it  might  be  ascertained  if  D.  &  D.  339,  which  turned  on  the  same 
the  business  was  profitable,  A  to  retain  agreement.  See,  also,  Re  Hall,  15  Ir.  Ch. 
from  the  proceeds  of  the  onlers  the  money    287,  a  similar  case. 

advanced  and  part  of  the  profits,  it  was  (/)  Compare  this  case  with  Jefferys  v. 
held  that  A  did  not  become  a  partner  Smith,  3  Russ.  158.  There  A  agreed  to 
upon  the  execution  of  the  contract.  Cas-  purchase  B's  share  in  a  firm ;  A  acted 
sidv  V.  Hall,  97  N.  Y.  159.  and  was  treated  as  a  partner  by  the  other 

(d)  4  De  G.,  J.  &  Sm.  523.     The  agree-    members,   but   afterwards   rescinded    the 
ment  was  in  the  form  of  a  bond,  and  was,    contract  with  B;  it  was  held  that  a  part- 
as  Lord  Westbury  remarked,  "  an  ingen-    nership  nevertheless  subsisted  between  A 
ions  piece  of  mechanism."    Such  an  agree-    ami  B's  copartners, 
ment,  however,  cannot  be  relietl  upon  as        {g)  2  Ex.  542. 
aflfording  protection  against  third  parties.        (A)  6  Bing  N.  C.  44. 

34 


CHAP.  I.,  §  I.]  PROMOTEES   OF   COMPANIES.  22* 

the  ground  that  he  was  a  partner  with  those  by  whom  the  plaintiff 
had  been  employed ;  but  the  court  held  that  there  was  no  partnership 
between  them  and  the  defendant  until  the  share  was  taken  by  him. 

Share  of  profits  expected  in  lieu  of  salary. — In  Burnell  v.  Hunt,  (i) 
an  agreement  was  come  to  between  A  and  B  that  A  should  take  prem- 
ises and  purchase  machinery  and  materials  to  carry  on  the  business  of 
a  silk  lace-maker,  and  that  B  should  manage  the  business  and  receive 
half  the  profits  as  soon  as  any  accrued,  and  should,  in  the  meantime, 
be  paid  £2  a  week.  It  was  held  that  so  long  as  the  £2  per  week  con- 
tinued payable,  there  was  no  partnership.  (^)  17 

Partnership  articles  to  he  drawn  up. — Persons  who  agree  to  become 
partners  may  be  partners  although  they  contemplate  signing  a  formal 
partnership  deed  and  never  sign  it.  (f)  But  if  they  are  not  to  be  part- 
ners until  they  sign  formal  articles  of  partnership,  and  if  they  do  not 
so  act  as  to  waive  the  performance  of  such  condition,  they  will  not  be 
partners  until  it  has  been  performed.  Where,  however,  two  persons 
agreed  to  become  partners  from  a  subsequent  day,  upon  certain  terms 
to  be  embodied  in  a  deed  to  be  executed  on  that  day,  it  was  held  that 
the  partnership  began  on  the  day  mentioned,  although  the  deed  was 
not  executed  until  afterwards,  and  althougli  alterations  were  made  in 
it  immediately  before  its  execution,  (in)  In  this  case,  however,  the 
^parties  did  in  fact  commence  business  as  partners  on  the  day 
named,  and  it  was  wholly  immaterial  (as  regarded  the  ques- 
tion before  the  court)  what  the  terms  of  the  partnership  were. 

(b)  Application  of  the  principle  to  promoters  of  companies. 

Promoters  of  companies  not  partners. — Promoters  of  companies  are 
not  partners ;  they  are,  it  is  true,  engaged  in  a  common  object,  and 
that  object  is  ultimately  to  share  profits ;  but  their  immediate  object  is 
the  formation  of  a  company,  and  they  are  only  in  the  position  of  per- 
sons who  intend  to  become  partners  after  the  company  is  formed.     It 

(i)  5  Jur.  650,  Q.  B.     The  real   point  555 ;  and  supra,  p.  *13,  note  6. 
here  was  whether  B  had  any  interest  in  (/)  As  in  Syersr.  Syers,  1  App.  Cas.  174. 
the  goods,  which  he  clearly  had  not,  and  {m)   Battley  v.  Lewis,  1  Man.  &  Gr.  155 ; 
would  not  have  had  even  if  tliere   had  and  see  Wilson  v.  Lewis,  2  Id.  197.  Gom- 
been profits  to  divide.  pare  Ellis  v.  Ward,  21  W.  R.  100,  where 

[k)  See,  too,  Ex  parte  Hickin,  3  De  G.  the   intended   partners  quarrelled   before 

■&  S.  662.  they  signed  the  deed. 

17.  See  Ee  Blumenthal,  18  Bankr.  Reg. 

35 


[*23 


23*  CONTRACTS    OF    PARTNERSHIP.  [BOOK  I., 

was  indeed  said,  in  Holmes  v.  Higgins,  (/t)  that  the  projectors  of  a 
railway  were  partners,  they  being  associated  for  the  purpose  of  procur- 
ing the  act  of  parliament  necessary  to  form  the  company  and  sub- 
scribing money  for   that  purpose;    and,  in    Lucas  v.  Beach, (o)  the 
court  iield  that  persons  associated  for  the  purpose  of  passing  a  turn- 
pike act,  and  who  had  subscribed  for  shares  in  the  proposed  road,  were 
l)artners.     But  in  each  of  these  cases  the  real  question  was  whether 
the  plaintiff  was  entitled  to  recover  from  the  defendants,  by  virtue  of 
any  implied  contract,  any  remuneration  for  services  rendered  by  him 
for  the  joint  benefit  of  himself  and  them.     It  was  held  that  he  was 
not;    and   if  the  court  had  likened  the  case  to  one  of  partnership, 
instead  of  saying  that  the  plaintiff  and  the  defendants  were  partners, 
there  would  be  no  room  for  criticism.     As  it  is,  however,  the  cases  are 
apt  to  be  considered,  and  are  sometimes  cited,  as  authorities  for  the 
proposition    that    persons   engaged    in    passing    through    parliament 
bills  to  authorize  the  establishment  of  a  company  are  partners.     In 
Lucas  V.  Beach  it  was  asked  in  argument,  "  What  is  there  to  prevent 
a  number  of  individuals  from  entering  into  a  partnership  with  the 
limited  object,  in  the  first  instance,  of  procuring  an  act  of  parliament,  and 
with  an  ulterior  object  in  view  when  the  act  has  passed  ?"(p)     The 
answer  is  that  to  call  persons  so  associated  partners  is  to  ignore  the 
difference  between  a  contract  of  partnership  and  an  agreement  to  enter 
into  such  a  contract,  to  confound  an  agreement  with  its  result,  and  ta 
hold   persons   to    be    partners   *although  they   have  not  yet 
-I    acquired  any  right  to  share  profits.     It  cannot  be  contended 
that  the  right  to  share  profits  would,  under  such  an  agreement  as  is 
supposed,  accrue  before  the  passing  of  the  act,  and  if  not,  how  can  the 
parties  to  such  an  agreement  be  partners  at  an  earlier  period  ? 

Later  authorities. — For  these  reasons  it  is  conceived  that  Holmes  v. 
Higgins  and  Lucas  v.  Beach  cannot  be  relied  upon  as  authorities  on 
the  question  of  partnership  or  no  partnership,  {q)  Nor  are  they  on 
this  point  reconcilable  with  later  decisions.  In  Keynell  v.  Lewis,  (r> 
and  Wyld  v.  Hopkins,  (/•)  in  which  the  question  was  much  discussed, 

(n)  1  B.  &  C.  71.  actually  decided,  viz.,  that  a  person  doing 

(o)  1  Man.  &  Gr.  417.  Barnett  v.  Lam-  work  for  the  joint  benefit  of  himself  and 
bert,  15  M  &  W.  489,  was  a  similar  case,    others  cannot  recover  compensation  from 

(p)  See,  too,  per  Lord  Brougham  in  them  by  virtue  of  any  implied  promise  to 
Hutton  V.  Upfill,  2  H.  L.  Cas.  691.  pay  him. 

{q)  They  are  authorities  for  the  point        (>•)  15  M.  &  W.  517. 

36 


CHAP.  I.,  §  II.]  QUASI    PARTNERSHIP. 


24* 


it  was  held  that  no  partnership  subsisted  between  persons  who  had 
subscribed  for  the  purpose  of  forming  a  railway  company  and  of  pro- 
curing the  necessary  act  of  parliament ;  and  this,  which  is  the  correct 
doctrine,  was  also  distinctly  stated  by  Lord  Cranworth,  in  Capper's 
Case,  (s)  and  has  been  recognized  on  many  other  occasions,  {t) 

Subscribers  to  inchoate  companies  not  partners. — It  is  a  necessary 
result  of  the  principles  established  above  that  persons  associated  for 
the  purpose  of  forming  a  joint  stock  company  are  not  partners,  {u) 
They  clearly  are  not  partners  in  the  company  to  be  formed ;  and  for 
reasons  already  given  they  cannot  be  considered  as  members  of  a  part- 
nership formed  to  start  the  company. 

Conditional  contract. — It  also  follows  from  the  same  principles  that 
if  persons  enter  into  an  agreement  to  take  shares  in  a  company  formed 
for  certain  purposes  and  upon  certain  conditions,  those  persons  are  not 
bound  to  take  shares  in  a  company  formed  for  different  purposes  or 
upon  other  conditions,  and  are  not  partners  in  such  a  company,  unless 
they  have  accepted  shares  therein  and  *precluded  themselves  ^^^ 
from  objecting  to  the  variation  of  their  agreement.  A  lead- 
ing case  on  this  subject  is  Fox  v.  Clifton,  (x)  which,  with  other  cases 
of  the  same  class,  will  be  found  in  the  volume  relating  to  companies 
and  contributories. 


SECTION   II. OP   QUASI  PARTNERSHIPS. 

Quasi  jKirtnerships. — Having  now  examined  the  nature  of  those 
agreements  which  are,  properly  speaking,  contracts  of  partnership,  it 
is  necessary  to  advert  to  the  doctrines  by  virtue  of  which  persons  who 
are  not  partners  at  all  are  nevertheless  made  subject  to  liabilities  as  if 
they  were  partners.     In  other  words,  it  is  necessary  to  explain  what 

(s)  1  Sim.  (N.  S.)  178.  2  H.  L.  Cas.  647  ;  Besley's  Case,  3  Macn. 

(0  E.  g.,  Batard  v.  Hawes,  and  Batard  &  G.  287  ;  Tanner's  Case,  5  De  G.  &S.  182. 

t.   Douglas,   2  E.  &  B.  287  ;    Walstab  v.  (u)  Wood  v.  Argyll,  6  Man.  &  Gr.  928  ; 

SpoUiswoode,  15  M.  &  W.oOl;  Forrester  Hamilton   v.  Smith,   5  Jur.    (N.  S.)  32; 

V.  Bell,   10  Ir.   Law  R.  555;    Hutton  v.  Hutton  v.  Thompson,  3  H.  L.  Cas.  161; 

Thompson,  3  H.  L.  Cas.  161 ;  Bright  v.  Bright  v.  Hutton,  Id.  368. 

Hutton,  3  H.  L.  Cas.  368  ;  Hamilton  v.  (x)  6  Bing.  776. 
Emith,  5  Jur.  (N.  S.)  32 ;  Norris  v.  Cottle, 

37 


25*  BY  SHARING   PROFITS.  [bOOK  I.^ 

it  is  that  creates  a  quasi  partnership,  or,  as  it  is  usually  called,  a  part- 
nership as  regards  third  persons.  This  will  involve  an  examination 
of  the  liability  which  a  person  incurs  : 

1.  By  sharing  ])rofits. 

2.  By  holding  himself  out  as  a  partner. 

1.  By  sharinr/  jyrojits. 

In  the  year  1775,  De  Grey,  C.  J.,  laid  down  the  proposition,  in 
Grace  v.  Smith,  (y)  that  "  every  man  who  has  a  share  of  the  profits 
of  a  trade  ought  also  to  bear  his  share  of  the  loss."  Eighteen  years 
afterwards,  viz.,  in  1793,  this  doctrine  was  discussed  and  apjjroved  in 
the  celebrated  case  of  Waugh  v.  Carver; (2;)  and  ever  since  that  time 
until  1860  it  was  considered  as  clearly  established  that  by  the  law  of 
England  all  persons  who  shared  the  profits  of  a  business  incurred  the 
liabilities  of  partners  therein,  although  no  partnership  between  them- 
selves might  have  been  contemplated.  Subtle  distinctions  were  drawn 
between  sharing  net  profits  and  gross  returns ;  and  between  sharing 
net  profits  and  payments  varying  with  them ;  but  it  was  taken  for 

,^  -.  granted,  both  by  judges  and  text-*writers,  that  where  there 
-^  was  no  statutory  enactment  to  the  contrary,  if  net  j^rofits 
were  shared,  it  necessarily  followed  that  liabilities  were  incurred. 
Moreover,  there  were  many  persons  of  ability  who  maintained  that 
this  rule  was  based  upon  principles  which  were  satisfactory  and 
morally  just.  Other  persons,  however,  took  a  different  view  of  the 
propriety  of  the  rule,  (a)  and  were  unable  to  understand  why  a  per- 
son lending  money  at  a  fixed  rate  of  interest  should  be  treated  as  a 
creditor,  and  be  exposed  to  no  risk  beyond  the  loss  of  his  advance ; 
whilst  a  person  lending  money  at  a  rate  of  interest  fluctuating  with, 
and  payable  out  of,  the  profits  of  the  borrower  should  be  treated  as  a 
partner,  and  be  exposed,  not  only  to  the  loss  of  his  money,  but  also 
to  the  loss  of  whatever  else  he  might  have  in  the  world.  In  the  first 
edition  of  this  work  the  writer  expressed  a  hope  that  the  rule  in  ques- 
tion would  ere  long  cease  to  exist ;  and  he  ventured  to  characterize  it 
as  arbitrary,  unjust,  and  as  productive  cf  the  greatest  confusion. 
Since  those  words  were  written  the  whole  subject  has  been  thoroughly 

(y)  2  Wm.  Bl.  998.  nership,  printed  by  order  of  the  House  of 

(2)  2  H.  Bl.  235.  Commons,  in  1851,  and  particularly  the 

(a)  See  the  rei)ori  »n  the  Law  of  Part-    evidence  of  the  late  Commissioner  Fane. 

38 


CHAP.  I.,  §  II.]  QUASI    PARTNERSHIP.  26* 

discussed,  both  in  the  highest  court  of  appeal,  (6)  and  in  parliament ; 
and  the  result  has  been  that  the  rule,  so  far  as  it  affords  a  conclusive 
test  of  liability,  (c)  has  ceased  to  exist ;  for  the  House  of  Lords,  and 
subsequently  other  courts,  have  repudiated  it,  and  parliament  has 
excluded  its  application  from  many  cases  in  which  it  has  been  found 
by  experience  to  produce  inconvenience  and  injustice.  Some  notice, 
however,  of  the  old  law  is  necessary  in  order  to  understand  the  modi- 
fications thus  introduced. 

1.  State  of  the  law  anterior  to  Coo:  v.  Hickman. 

Origin  of  the  rule  that  those  who  share  profits  are  liable  to  losses. — As  already  stated, 
the  rule  that  persons  who  share  profits  incur  liabilities  as  if  they  were  partners  was 
laid  down  for  the  first  time  in  Grace  v.  Smith,  (d)  The  question  there  was  whether 
the  defendant  was  liable  to  a  creditor  of  a  firm ;  and  the  material  facts  were  that  the 
defendant  (who  had  *been  a  partner,  but  who  had  notoriously  retired  before 

r  27 

the  creditor's  demand  arose)  had  advanced  to  the  firm  £4000  upon  the  terms  '- 
of  being  repaid   the  principal   and   of  receiving,  so  long  as  it  remained    unpaid, 
interest  at  five  per  cent,  and  an  annuity  of  £300  a  year.     The  verdict  was  for  the 
defendant,  and  the  court  refused  a  new  trial.     De  Grey,  C.  J.,  gave  his  judgment  as 
follows  : 

Judgment  in  Orace  v.  Smith. — "The  only  question  k,  What  constitutes  a  secret 
partner  ?  Every  man  who  has  a  share  of  the  profits  of  a  trade  ought  also  to  bear  his 
share  of  the  loss.  And  if  any  one  takes  part  of  the  profit,  he  takes  a  part  of  that  fund 
on  which  the  creditor  of  the  trader  relies  for  his  payment.  If  any  one  advances  or 
lends  money  to  a  trader,  it  is  only  lent  on  his  general  personal  security'.  It  is  no 
specific  lien  upon  the  profits  of  the  trade,  and  yet  the  lender  is  generally  interested 
in  those  profits ;  he  relies  on  them  for  repayment.  And  there  is  no  difference 
whether  that  money  be  lent  de  novo,  or  left  behind  in  trade  by  one  of  the  partners 
who  retires ;  and  whether  the  terms  of  that  loan  be  kind  or  harsh  makes  ako  no 
manner  of  difierence.  I  think  the  true  criterion  is  to  inquire  whether  Smith  (the 
defendant)  agreed  to  share  the  profits  of  the  trade  with  Robinson  (the  continuing 
partner),  or  whether  he  only  relied  on  those  profits  as  a  fund  of  payment,  a  distinc- 
tion not  more  nice  than  usually  occurs  in  questions  of  trade  or  usury.  The  jury 
have  said  this  is  not  payable  out  of  the  profits,  and  I  think  there  is  no  foundation  for 
granting  a  new  trial." 

This  judgment  and  not  the  decision  in  the  case,  has  always  been  regarded  as  the 
great  authority  for  the  proposition  that  a  person  who  shares  profits  is  liable  to  ihird 
parties  as  if  he  were  in  fact  a  partner.  The  judgment  itself  appears  to  have  been 
based  upon  a  prior  case  of  Bloxham  v.  Pell,  (e)  before  Lord  Mansfield,  and  in  sub- 
stance undistinguishable  from  Grace  v.  Smith.  In  Bloxham  v.  Pell  an  outgoing 
partner  became  entitled  to  be  paid  by  the  continuing  partner  a  certain  sum  of  money, 
with  interest  at  five  per  cent.,  and  also  an  annuity  of  £200  a  year  for  six  years,  in  lieu 

(6)  Cox  V.  Hickman,  8  H.  L.  Cas.  268.    seen  already,  ante  p.  *12,  et  seq. 
(c)  That  participation  in  profits  is  still        (d)  2  Wm.  Bl.  998. 
a  prima  facie  test  of  partnership  has  been        (e)  Cited  in  2  Wm.  Bl.  999. 

39 


27*  BY  SHARING   PROFITS.  [bOOK  I.j 

of  the  profits  of  tlie  trade.  The  plaintifT  sued  liim  for  a  debt  contracted  after  the 
dissolution,  and  Lord  Mansfield  held  the  defendant  liable,  on  the  ground  that  the 
agreement  was  a  device  to  make  more  than  legal  interest  of  money,  and  if  it  was  not 
a  partnership  it  was  a  crime;  and  it  should  not  lie  in  the  defendant  Pell's  mouth  to 
say  it  was  usury  and  not  a  partnership.  Lord  Mansfield  did  not  say  a  word  in  favor 
of  the  doctrine  laid  down  in  Grace  v.  Smith ;  but  seeing  a  contract  which,  on  the 
ground  of  usury,  was  invalid  as  a  contract  of  loan,  he  nevertheless  upheld  it  as  a 
contract  of  partnership,  which  it  plainly  was  not,  but  which  was  the  only  alternative 
if  the  agreement  was  to  be  upheld  at  all.  (/) 

Such  was  the  origin  of  the  rule  in  question,  which  was  approved  and  applied  in 
the  well-known  case  of  Waugli  v.  Carver,  the  leading  old  authority  on  this  subject. 
In  Waugh  V.  Carver,  (g)  two  ship-agents,  carrying  on  business  at  different  ports, 
agreed  to  allow  each  other  certain  portions  of  each  other's  commissions  and  profits, 
but  it  was  expressly  agreed  that  neither  of  them  should  be  prejudiced  or  aflected  by 
the  losses  of  the  other,  '''or  be  answerable  for  the  acts  of  the  other,  but  that 
-■  each  should  be  answerable  and  accountable  for  his  own  losses  and  acts.  It 
was  admitted  by  the  court  that  this  agreement  created  no  partnership  as  between  the 
parties  to  it ;  but  it  was  nevertheless  held,  on  the  principle  enunciated  in  Grace  v. 
Smith,  that  both  parties  to  the  agreement  were  answerable  for  the  business  debts  of 
each,  and  a  creditor  who  sued  both  for  goods  supplied  to  one  obtained  judgment 
against  both  accordingly.^^ 

Application  of  the  foregoing  doctrines. — Other  cases,  in  which  the  same  principle  was 
applied,  need  only  be  shortly  referred  to.  It  was  held  that  a  quasi  partnership  sub- 
sisted between  merchpnts  who  divided  the  commissions  received  by  each  other  on  the 
sale  of  goods  recommended  or  "influenced"  by  the  one  to  the  other;  (A)  so,  between 
persons  who  agreed  to  share  the  profits  of  a  single  isolated  adventure ;  (i)  and  between 
persons,  one  of  whom  was  in  the  position  of  a  servant  to  the  others,  but  was  paid  a 

(/)  See  Jestons  v.  Brooke,  Cowp.  793,  partner,  cannot  be  held  for  debts  incurred 

and  ante  p.  *16.  in  the  business  as  a  dormant  partner,  un- 

{g)  2  H.  Bl.  235,  and  1  Smith's  Lead,  less  in  virtue  of  some  contract,  express  or 

Gas.  implied,  on  his  part,  in  legal  effect  cre- 

18.  When  sharing  profits  imposes  ating,  as  between  him  and  the  persons 
liability  for  losses. — While  participation  actually  carrying  on  the  business,  the  re- 
in the  profits  of  a  firm  is  prima  facie  evi-  lation  of  principal  and  agent.  Wild  v. 
dence  of  partnership,  and  becomes  conclu-  Davenport,  7  Atl.  Kep.  295.  S.  P.,  East- 
sive,  as  to  third  persons,  when  not  re-  man  v.  Clark,  53  N.  H.  276. 
butted  by  evidence  showing  such  partici-  But  a  contract  that  one  party  shall  fur- 
pation  to  be  in  place  of  compensation  for  nish  money  and  the  other  perform  work 
services  (Fourth  Nat.  Bank  v.  Altheimer,  for  a  given  business,  and  that  its  net 
3  S.  W.  Rep.  858),  still,  merely  sharing  profits  shall  be  equally  divided  between 
the  profits  does  not,  ipso  facto,  make  one  a  them,  makes,  without  reference  to  their 
partner  as  to  third  persons.  Parchen  v.  intent,  a  partnership  as  to  third  persons. 
Anderson,  5  Mont.  T.  438 ;  S.  C,  51  Am.  Pettee  v.  Appleton,  114  Mass.  114 ;  Bige- 
Rep.  65.  Such  participation,  or  the  right  low  v.  Elliott,  1  Cliff.  (U.  S.)  28. 
to  participate,  is  not  an  invariable  test  of  (A)  Cheap  v.  Cramond,  4  B.  &  A.  663. 
partnership,  even  as  to  creditors.  One  (i)  Heyhoe  v.  Burge,  9  C.  B.  431 ;  Ex 
not  actually  engaged  in  the  business  as  a  parte  Gellar,  1  Rose  297  ;  Hesketh  v. 
principal,  and  not  holding  himself  out  as  a  Blanchard,  4  East  144. 

40 


CHAP.  I.,  §  II.] 


QUASI    PARTXERSHIP. 


28^ 


share  of  the  profits  instead  of  a  salary ;  (k)  and  between  persons,  one  of  whom  was 
paid  an  annuity  out  of  the  profits  made  by  the  others ;  (l)  or  an  annuity  in  lieu  of 
any  share  in  those  profits;  (m)  so,  between  the  vendor  and  purchaser  of  a  business, 
if  the  former  guaranteed  a  clear  profit  of  so  much  a  year  and  was  to  have  all  profits 
beyond  the  amount  guaranteed,  (n) 

Moreover,  the  character  in  which  a  portion  of  the  profits  was  received  did  not 
afTect  the  result.  For  a  person  who  as  executor  or  trustee  merely  employed  money 
in  trade  or  business,  and  shared  the  profits  arising  from  it,  incurred  all  the  liabilities 
of  a  partner,  although  he,  in  fact,  had  personally  no  interest  whatever  in  the  mat- 
ter, (o)  On  the  other  hand,  the  cestuis  que  trustent  were  also  liable ;  the  creditors 
having  an  option  against  which  of  the  two  they  would  proceed,  {p) 

Again,  persons  who  shared  profits  were  quasi  partners,  although  their  community 
of  interest  was  confined  to  the  profits.  In  Smith  v.  Watson,  [q)  a  broker,  who  was 
paid  by  a  share  of  the  profits  arising  from  the  sales  made  by  him,  and  who  was 
therefore  a  quasi  partner  with  the  person  employing  him,  was  nevertheless  held  to 
have  no  interest  in  the  goods  sold.^* 


{k)  Ex  parte  Digby,  1  Deac.  341 ;  Ex 
parte  Kowlandson,  1  Rose  92 ;  and  see 
Withington  v.  Herring,  3  Moo.  &  P.  30. 

(Z)  Re  Colbeck,  Buck.  48;  Ex  parte 
Hamper,  17  Ves.  412;  Ex  parte  Chuck,  8 
Bing.  469. 

{m)  Bloxham  v.  Pell,  2  Wm.  Bl.  999, 
ante  p.  *27. 

(ft)  Barry  v.  Nesham,  3  C.  B.  641. 
Compare  Pott  v.  Eyton,  Id.  32,  infra,  p. 
*30. 

(o)  Wightman  v.  Townroe,  1  M.  &  S. 
412 ;  Ex  parte  Garland,  10  Ves.  119  ;  La- 
bouchere  v.  Tupper,   11  Moore  P.  C.  198. 

(p)  See  Goddard  v.  Hodges,  1  Cr.  &  M. 
33.  In  this  case  the  court  held  that  the 
cestui  que  trust  was  liable  to  creditors,  and 
that  therefore  he  could  not  sue  the  copart- 
ners of  his  own  trustee.  But  surely  this  was 
wrong.  There  was  no  partnership  between 
the  plaintiff  and  defendants,  no  contract 
between  them. 

iq)  2  B.  &  C.  401 ;  and  see  Burnell  v. 
Hunt,  5  Jur.  650,  Q.  B.,  and  Cheap  v.  Cra- 
mond,  4  B.  &  A.  663. 

19.  Illustrations  of  the  rule. — In  the 
following  instances,  the  element  of  commu- 
nity of  profits  was  held  to  create  the  partner- 
ship liability  as  to  third  persons: 

Where  A  and  B  agreed  that  A  should 
take  certain  negroes  of  B,  and  work  them 
in  a  blacksmith's  shop,  furnish  all  sup- 


plies, pay  all  expenses,  and  give  B  one- 
half  of  the  net  proceeds  of  the  shop  for 
the  use  of  the  negroes.  Buckner  v.  Lee,  8 
Ga.  285. 

Where  there  was  a  lease  of  a  steam-mill 
and  appurtenances,  reserving  as  rent  one- 
half  of  the  net  profits  of  the  business,  and 
also  providing  that  the  lease  should  not 
be  assignable,  and  should  cease  on  the 
lessee's  death,  or  his  inability  from  any 
cause  to  give  his  personal  attention  there- 
to.    Dalton  City  Co.  v.  Hawes,  37  Ga.  115. 

Where  a  father  and  son,  both  living  on 
the  same  farm,  worked  it  together  under  an 
agreement  that  the  father  was  to  furnish 
the  land  and  the  slock,  and  provisions  for 
the  stock,  and  the  son  to  furnish  the  hands 
and  to  superintend  the  work,  and  the  crop 
to  be  equally  divided  between  them,  and 
nothing  more  appeared.  Adams  v.  Carter, 
53  Ga.  160.  S.  P.,  Pettee  v.  Appleton,  114 
Mass.  114;  Brown  v.  Higginbotham,  5 
Leigh  (V:i.)  583. 

W^here  there  was  a  contract  for  one  to 
furnish  factory  and  materials,  and  another 
to  manufacture,  and  either  to  sell  the  pro- 
duct, and  the  proceeds  to  be  divided. 
Farmers'  Ins.  Co.  v.  Ross,  29  Ohio  St.  429. 

Where  the  owner  of  a  tug  agreed  with 
the  owner  of  a  barge  that  both  vessels 
should  be  employed  in  a  freighting  busi- 
ness, the  wages  of  the  servants  of  the  asso- 


41 


29*  BY   SHAKING    PROFITS.  [bOOK  I., 

Distinction  between  sharing  profits  imd  gross  returyis.— But  notwithstanding  tlie  extent 
to  whicli  the  doctrine  laid  down  in  Grace  *t).  Smith  was  carried,  it  was  long  ago 
establislied  that  persons  who  shared  only  gross  returns  were  not  quasi  partners  ; 
and  subtle  distinctions  were  taken  between  a  payment  out  of  profits,  and  a  payment 
varying  with  them,  and  between  an  agreement  to  share  profits  as  such  and  an  agree- 
ment to  share  profits,  not  as  profits,  but  as  something  else.  These  subtleties  were 
attributable,  on  the  one  hand,  to  the  establishment  of  the  rule  that  persons  who 
shared  {)rofits  should  be  answerable  for  losses,  and  on  the  other  to  a  disinclination  to 
api)ly  that  principle  to  cases  in  which  it  was  clear  that  those  who  shared  the  profits 
never  intended  to  become  partners  inter  se. 

First,  as  to  gross  returns.  In  Benjamin  v.  Porteus,  (r)  an  agreement  was  made 
between  the  plaintiff'  and  a  broker,  by  which  the  broker,  instead  of  a  commission  on 
the  sales  effected  by  him  for  the  phiintiff,  was  to  have  the  whole  proceeds  of  the  sales 

elation  and  expenses,  except  for  repairs,    this  does  not  constitute  them  all  partners, 

to  be  paid  out  of   the  earnings,  and    the    and  make  them  all  liable  for  expenses  in- 

balance  or  profits  to  be  divided   between    curred  by  either  in  the  performance  of  his 

them  in  proportion  to  the  stipulated  value    or  their  part  of  the  contract.     Heckert  v. 

of  the  vessels.     Bowns  v.    Pioneer   Tow    Fegeiy,  6  Watts  &  S.  (Pa.)  139.     So,  also, 

Line    2    Sawy.    (U.   S.)    21.      See,   also,    a   pool    arrangement    between   steamboat 

Whitney  v.  Ludington,  17  Wis.  140;  Ap-    owners,  whereby  the  excess  of  net  earn- 

pleton  V.  Smith,  24  Wis.  331 ;  Upham  v.    ings  of  one  boat  over  those  of  the  other  is 

Hewitt  42  Wis.  85.  to  be  divided  at  the  end  of  the  season,  does 

So,  also,   where  several    common    car-    not,  alone,  constitute  a  partnership  so  as  to 

riers,  each  having  its  own  line,  associate    create  a  joint  liability  for  the  negligence 

and  form  what,  from  the  shipper's   point    of  either.     Fay  ?;.  Davidson,  13  xMinn.  523. 

of  view,  is  a  continuous  line,  and  contract        And  where  a  non-resident  commercial 

to  carry  goods  through  at  an  agreed  price,    firm    agreed    with    two    resident    firms, 

which  the  shipper  pays  in  one  sum,  and    whereby  one  of  the  latter  firms   was  to 

which   the  carriers  divide   among  them-    purchase  certain  merchandise,  and  ship  it 

selves,  they  are  jointly  and  severally  Ha-    in  the  name  of  the  other,  and  the  other 

ble  to  the  shipper  for  a   loss  taking  place    resident  firm,  with  the  money  of  the  non- 

on  any  part  of  the  whole  line.     Wyman  v.    resident  firm,  was  to  pay  for  the  same, 

Chicago  and  Alton  R.  Co.,  4  Mo.  App.  35.    and  each  of  the  resident  firms  agreed  to 

And  where  R.  advanced  |700  to  M.,  a    receive,  instead  of  fixed  sums  in  payment 

traveling  showman,  under  the  agreement    for  their  services,  certain  proportions  of 

that  after  payment  of  expenses  R.  was  to    the  profits  to  arise  from  the  sales  of  the 

receive  back  the  $700,  and  one-half  of  the    goods  so    bought,  and  to  share    in    any 

net   profits— /fe/rf.  that   R.  and    M.  were    losses  resulting  from   said   sales— it  was 

partners  as  to  third  persons,  irrespective    held  that  this  contract  did  not  make  the 

of  any  agreement  to  the  contrary  between    said  firms  commercial  partners  even  as  to 

themselves.      Haas  v.  Roat,  16  Hun  (N.    third  persons,  it  appearing  that  they  did 

y  )  526.  not  so  intend,  and  that  they  had  not  held 

On   the  other   hand,  it   has  been   held    themselves  out  as  partners.     Chaflraix  v. 

that  where  three  persons  agree,  the  one  to    Laffitte,  30  La.  Ann.  631.     See,  also,  Eiu- 

do  certain  things  and  the  other  two  cer-    stein  v.  Gourdin,  4  Woods  (U.  S.)   415; 

tain  other  things,  each  at  his  own  expense,    Lafon  v.  Chinn,  6  B.  Mon.  (Ky.)  305. 

each  to  be  entitled  to  an  equal  share  of         ())  2  H.  Bl.  590.     See,   too,   Dixon  v. 

the  profits   arising   out  of   the   contract.    Cooper,  3  Wils.  40. 

42 


CHAP.  I.,  §  II.]  QUASI    PARTNERSHIP. 


29^ 


less  2.S.  6d.  per  lb.,  which  was  to  be  paid  to  the  plaiirtiff.  This  was  held  not  to  give 
the  broker  such  an  interest  in  the  goods  sold  by  him  as  to  render  him  an  incompetent 
witness  for  the  plaintiff,  his  piincipal,  in  an  action  for  their  priee.  This  decision 
seems  to  have  paved  the  way  to  others  which  went  far  beyond  it.  In  Dry  v.  Bos- 
well,  (s)  Lord  Ellenborough  held  that  no  quasi  partnership  subsisted  between  the 
owner  of  a  barge  and  the  man  who  worked  it,  and  who  received  for  his  wages  half 
the  gross  earnings ;  and  in  Mair  v.  Glennie,  (<)  where  the  captain  of  a  ship  was  to  be 
paid  one-fifth  of  the  profit  or  loss  on  an  intended  voyage,  it  was  held  that  he  and  the 
owners  of  the  ship  were  not  quasi  partners.  It  had  previously  been  decided,  in  Wil- 
kinson V.  Frazier,  (w)  tha-t  the  crew  of  a  whaling  ship  wiio  were  to  be  paid  by  the 
owners  a  certain  share  of  the  oil  brought  home,  were  not  partners  with  them. 

The  distinction  between  gross  returns  and  profiis  (or,  as  they  are  sometimes  called, 
gross  profits  and  net  profits),  was  acted  upon  by  Mr.  Baron  Parke  in  Heyhoe  v. 
Burge,  {x)  when  he  told  the  jury  "a  person  who  shares  gross  profits  is  not  a  partner  j 
but  a  person  who  shares  net  profits  is  prima  facie  to  be  considered  as  a  partner."  {x)  ^'^ 

Distinction  between  sharing  profits  and  payments  varying  xvith  them. — Next,  as  to  the 
distinction  between  payments  out  of  profits  as  such,  and  payments  not  out  of  them  as 
such.  The  great  enforcer  of  the  distinction  in  question  was  Lord  Eldon,  who  seems 
to  "have  been  led  to  make  it  by  the  impossibility  of  otherwise  reconciling  Grace  v. 
Smith  and  Bloxham  v.  Pell.  In  Ex  parte  Hamper  (j?)  his  lordship  is  reported  to 
have  said : 

"It  is  clearly  settled,  though  I  regret  it,  that  if  a  man  stipulates  that  as  the  reward 
of  his  labor  he  shall  not  have  a  specific  interest  in  the  business,  but  a  given  sum  of 
money  even  in  proportion  to  a  given  quantum  of  the  profits,  that  will  not  make  iiim 
a  partner ;  but  if  he  agrees  for  a  part  of  the  profits  as  such,  giving  him  a  right  to  an 
account,  though  having  no  property  in  the  capital,  he  is,  as  to  third  persons,  a  partner, 
and  in  question  with  third  persons  no  stipulation  can  protect  him  from  loss." 

*Olher  cases  decided  by  his  lordship  contain  dicta  to  the  same  effect,  (a) 
J  and  the  distinction  must  be  considered  as  settled  in  point  of  law.     The  latest 

(s)  1  Camp.  330;  and  see  Wish  v.  Small,  ship  expenses,  nor  is  the  business  such  a» 

in  the  note  there.  to  authorize   any  necessary  inference  of 

(<)  4  M.   &  S.  240.      The   expression  partnership.     Denis «;.  Saunders,  36  Mich. 

"  profit  or  loss,"  in  this  case,  must  have  369.    S.  P.,  Braley  v.  Goddard,  49  Me.  115. 

been  held  equivalent  to  gross  returns.  Nor  does  the  appointment,  by  the  differ- 

(w)  4Esp.  182.    Seea?iYep.*19,  note(x).  ent  proprietors  of  several   sections  of  a 

{%)  Heyhoe  v.  Burge,  9  C.  B.  431 ;  see  public  line  of  travel,  of  a  common  agent 

Id.  440,  444.  at  each  end  of  the  route  to  receive  fares 

20.  Effect  of  sharing  gross  returns. —  and  give  thr®ugh  tickets,  of  itself,  consti- 

An   agreement  between   two  concerns  to  tute  them  partners  as  to  passengers  who 

share  commissions  on  sales  of  goods  to  be  purchase  such  tickets,  so  as  to  render  each 

forwarded   by  one   to  the  other,  does  not  one  liable  for  losses  occurring  on  any  por- 

create  a  partnership  between  the  two  firms,  tion  of  the  line.     Ellsworth  v.  Tartt,  2& 

Pomeroy   v.   Sigerson,  22   Mo.   177.     So,  Ala.  733. 
where  a  land-owner  arranges  that  another        iy)  17  Ves.  412. 

shall  cut  posts  on  the  lands  at  his  own  ex-        (a)  See  Ex  parte  Rowlandson,  1  Rose 

pense,  on  shares,  receiving  lialf  the  posts  89  ;  Ex  parte  Langdale,  18  Ves.  300  ;  Ex 

and  paying  all  the  cutting  expenses,  these  parte  Watson,  19  Id.  461. 
expenses  cannot  be  regarded  as  partner- 

43 


30*  cox    V.    HICKMAN.  [bOOK  I., 

case  upon  this  subject  is  Pott  v.  Eyton.  (6)  The  defendant  Eyton  was  concerned  in 
a  colliery,  and  the  defendant  Jones  kept  a  shop  for  supplying  the  workmen  at  the 
colliery.  Eyton  built  the  shop  ;  licenses  to  sell  tea,  Ac,  were  taken  in  his  name,  and 
he  paid  for  the  goods  supplied  to  the  shop.  Jones  managed  the  shop  business. 
Eyton  received  first  seven  and  afterwards  five  per  cent,  on  the  amount  of  all  sales  to 
the  workmen,  and  Jones  had  all  the  rest  of  the  profits  of  the  shop  from  whatever 
source  derived.  The  question  was  whether  Eyton  and  Jones  were  partners  or  quasi 
partners.  The  jury  found  that  there  was  no  agreement  to  share  profit  and  loss,  and 
the  Court  of  Common  Pleas  acted  on  the  distinction  taken  in  Ex  parte  Hamper,  and 
on  the  distinction  between  profits  and  gross  returns,  and  held  that  no  partnership  or 
^uasi  partnership  existed.^ ^ 

Loans. — A  loan  of  money  to  be  repaid  with  interest,  however  exorbitant,  did  not 
constitute  a  quasi  partnership  between  the  borrower  and  the  lender  (c)  unless  profits 
were  expressly  pointed  at  as  the  fund  for  payment,  (d)'^^ 

2.  Modljkalions  introduced  by  the  House  of  Lords  in  Cox  v.  Hickman. 

Such  was  the  state  of  the  law  when  the  case  of  Cox  v.  Hickman 
oanie  before  the  House  of  Lords ;  and  that  tribunal,  in  effect,  decided 

(6)  3  C.  B.  32.     See  further,  as  to  this  cause,  when  not  so  interested,  liis  condi- 

case  infra,  ?  2  (2).  tion  is  not  different  from  that  of  an  ordin- 

21.  Distinction  between  sharing  pro-  ary  creditor.     Berthold  ?;.  Goldsmith,  24 

fits,  as    such,  and   payments   varying  How.  (U.  S.)  536. 

with    them.— The    participation    in   the  In  Louisiana,  however,  it  is  held  that 

profits  of  a  business  does  not  in  all  cases  an  employee  whose  compensation  depends 

make  the  participant  a  partner  as  to  third  on  the  profits  of  the  business,  and  who,  if 

persons ;  to  have  that  effect  the  participa-  there  are  no  profits,  is  to  receive  nothing, 

tion  must  be  in  the  profits  as  such,  under  and   who  on  several  occasions    has   held 

circumstances  which  give  him  a  proprie-  himself  out  as  a  partner,  will  be  responsi- 

tary  right   as   principal   trader   in   such  ble  as  such  to  third  persons,  though  inter 

profits  before  division.    Burnett  i).  Snyder,  se  the  parties  never  intended  a  partner- 

81  N.  Y.  550.     As  we  have  already  seen  ship.     Lee  v.  BuUard,  3  La.  Ann.  462. 

in  a  former  note  (p.  *13,  note  6),  a  com-  Compare   Halliday  v.  Bridewell,  36  Id. 

pensation   for  services,  in  the  form  of  a  238. 

commission  on  profits,  creates  no  such  in-  (c)  Grace  v.  Smith,  2  Wm.  Bl.  998. 

terpst  in  the  concern  as  constitutes  a  part-  [d)  Gilpin  v.  Enderby,  5  B  &  A.  954; 

nership.  Fereday  t.  Hordern,  Jac.  144  ;  Bloxhamv. 

The   rule   we   are   considering  has  no  Pell,  an<e  p.  *27.     See,  as  to  the  first  two 

application  to  a  case  of  mere  service  or  cases,  an<e  p.  *16. 

special  agency,  where  the  employee  has  no  22.  Loans. — In  Connecticut  it  is  held 
power  in  the  firm,  and  no  such  interest  in  that  one  who  receives  profits  in  cousidera- 
the  profits  as  will  enable  him  to  go  into  tion  of  furnishing  capital  is  a  partner  as 
equity  to  enforce  a  lien  for  the  same  or  to  to  third  persons,  even  though  it  be  stipu- 
compel  an  account.  Unless  such  employee  lated  that  the  capital  so  furnished  should 
is  in  some  way  interested  in  the  profits  of  be  regarded  as  a  loan,  and  the  party  fur- 
the  business,  as  principal,  he  cannot  be  nishing  it  a  mere  creditor.  Parker  ?;.  Can- 
regarded   as  falling  within  the  rule,  be-  field,  37  Conn.  250.     But  a  better  expres- 

44 


CHAP.  I.,  §  n.]  QUASI    PARTNERSHIP.  30* 

that  persons  who  share  the  profits  of  a  business  do  not  incur  the  lia- 
bilities of  partners  unless  that  business  is  carried  on  by  themselves 
personally  or  by  others  as  their  real  or  ostensible  agents,  (e) 

The  question  in  Cox  v.  Hickman  (/)  was  substantially  whether  the 
scheduled  creditors  to  a  deed  of  arrangement,  who  were  to  be  paid 
their  debts  out  of  the  profits  of  their  debtors'  business,  were  liable  to 
debts  contracted  by  the  trus*tees  in  carrying  on  that  business 
pursuant  to  the  deed ;  (g)  and  it  was  ultimately  decided  that 
they  were  not. 

The  Lords  were  unanimous  in  treating  the  matter  before  them  as  a 
mere  question  of  agency,  and  in  holding  that  the  circumstances  that 


sion  of  the  rule  is  believed  to  be  that 
where  money  is  loaned  for  the  benefit  of 
a  business,  and  is  to  be  refunded  absolute- 
ly, without  regard  to  the  profits,  the  fact 
that  the  lender  is  to  receive  a  share  of  the 
profits,  to  apply  on  the  indebtedness,  does 
not  make  him  liable  to  creditors  as  a  part- 
ner ;  to  have  that  effect,  the  payment  of 
the  advancement  must  depend  upon  the 
profits.  Eager  v.  Crawford,  76  N.  Y.  97. 
Thus,  the  mere  fact  that  one  is  to  receive 
a  certain  portion  of  the  net  profits  of  a 
firm,  in  consideration  of  his  acceptance  of 
certain  drafts,  will  not  make  him  liable  as 
a  partner,  if  there  was  no  holding  out,  and 
his  name  has  not  been  used  ;is  partner. 
Polk  V.  Buchanan,  5  Sneed  (Tenn.)  721. 

So,  where  the  lender  has  the  option  to 
share  the  profits  or  to  receive  back  his 
money  with  interest,  he  is  not  a  partner. 
Moore  v.  Walton,  9  Bankr.  Reg.  402.  To 
same  effect,  Re  Francis,  2  Sawy.  (U.  S.) 
286 ;  Re  Ward,  25  Int.  Rev.  Rec.  289. 

In  Curry  v.  Fowler  (87  N.  Y.  33  ;  S.  C, 
41  Am.  Rep.  343),  a  loan  of  money  to 
purchase  and  erect  buildings,  the  lender 
to  receive  interest  and  half  the  profits  of 
sale,  which  the  borrowers  guaranteed  at  a 
certain  amount,  the  loan  and  profits  being 
secured  by  mortgage,  was  held  not  to  con- 
stitute the  lender  a  partner  as  to  third  per- 
sons. S.  P.,  Rosenfield  v.  Haight,  53  Wis. 
260;  S.  C,  40  Am.  Rep.  770;  Ford  v. 
Smith,  27  Wis.  261. 


In  Swann  v.  Sanborn  (4  Woods  (U.  S.) 
625),  the  United  States  Circuit  Court  sit- 
ting in  Florida  held  that  where  S.  loaned 
money  to  C,  to  be  invested  in  business  by 
him,  and  agreed  to  take,  in  lieu  of  an  in- 
terest therein,  a  certain  share  of  the  profits 
of  the  business,  persons  who  became 
creditors  of  C.  after  this  arrangement  was 
ended,  and  who  had  never  heard  of  it, 
could  not  hold  S.  as  a  partner. 

(e)  Cox  V.  Hickman,  8  H.  L.  Cas.  268. 

(/)  Hickman  v.  Cox,  18  C.  B.  617,  and 
3  C.  B.  (N.  S.)  523;  Cox  v.  Hickman,  8 
H.  L.  Cas.  268.  See,  also,  The  Stanton  Iron 
Co.,  21  Beav.  164 ;  Price  v.  Groom,  2  Ex. 
542,  and  ante  p.  *21.  Owen  v.  Body,  5  A. 
&  E.  28;  and  Janes  v.  Whitebread,  11  C. 

B.  406,  may  also  be  referred  to  on  the 
subject  of  partnership  created  by  creditors' 
deeds;  and  as  to  the  non-liability  of  in- 
spectors for  debts  not  contracted  by  them 
as  principals,  see  Redpath  v.  Wigg,  L.  R., 
1  Ex.  335  ;  Eastbrook  v.  Barker,  L.  R.,  6 

C.  P.  1. 

(g)  The  defendants  actually  sued  were 
two  trustees,  who  were  also  scheduled 
creditors;  one  of  them  never  acted  as 
trustee,  and  the  other  had  retired  from  the 
trusteeship  before  the  debts  in  question 
were  contracted.  But  all  the  judges 
agreed  that  there  was  no  difTerence  be- 
tween the  liability  of  the  defendants  and 
that  of  the  other  scheduled  creditors. 


45 


31*  cox   V.    HICKMAN.  [bOOK  I., 

the  profits  of  the  business  were  to  be  shared  by  the  scheduled  creditors 
was  by  no  means  sufficient  to  show  that  the  trustees  were  their  agents 
and  authorized  to  act  as  such  on  their  behalf,  {h) 

Observations  on  the  decision  of  the  House  of  Lords. — In  Cox  v. 
Hickman  the  persons  whose  liability  was  in  question  were  only  enti- 
tled to  share  profits  to  the  amount  of  their  respective  debts,  and  this 
circumstance  was  greatly  relied  upon  as  distinguishing  the  case  from 
Waugh  V.  Carver,  and  others  of  that  class,  in  which  the  profits  were 
shared  to  an  indefinite  extent.  But  it  is  plainly  not  cousistest  with 
the  rcasouino;  in  Cox  v.  Hickman  to  hold  that  the  mere  fact  that 
profits  are  shared  indefinitely  raises  an  irrebuttable  presumption  that 
those  who  share  them  are  the  principals  of  those  who  make  them. 
The  circumstance  that  one  person  shares  all  the  profits  made  by 
another  is,  no  doubt,  an  important  element  to  be  considered  in  deter- 
mining the  true  relation  in  which  those  persons. stand  to  each  other; 
but  it  no  more  conclusively  shows  such  relation  to  be  one  of  agency, 
than  it  conclusively  shows  that  the  persons  in  question  are  truly  part- 
ners inte7'  se.  In  fact,  although  the  House  of  Lords,  in  deciding  Cox 
V.  Hickman,  professed  to  overrule  no  previous  authority,  the  effect  of 
that  decision  has  unquestionably  been  to  put  a  great  branch  of  part- 
nership law  on  a  substantially  new  footing.  The  following  more 
recent  decisions  conclusively  show  this. 

More  recent  decisions. — In  Kilshaw  v.  Jukes  (i)  it  was  held  that  a 
person  who  advanced  money  and  supplied  goods  to  two  others,  on  the 
terms  of  being  repaid  the  advances  and  price  of  the  goods  out  of  the 
profits  of  a  building  speculation,  if  such  profits  should  be  sufficient  for 
the  purpose,  was  not  liable  to  debts  contracted  by  them  for  the  pur- 
poses of  the  speculation. 

*In  the  English  and  Irish  Church  and  University  Insur- 
-1  ance  Society  {k)  it  was  held  that  the  holders  of  policies  of  in- 
surance who  were  entitled  to  be  paid,  out  of  the  funds  of  an  insurance 
society,  not  only  the  sUms  originally  insured,  but  also  siich  bonuses  as 
by  the  rules  of  the  society  might  be  added  thereto  out  of  the  profits 
of  the  society,  were  not  liable  as  partners  with  the  members  of  the 
so(!iety  either  to  the  holders  of  other  policies  issued  by  it,  or  to  its 
other  creditors. 

(h)  Baron    Bramwell    had    taken   the        (k)  1    Hem.  &   M.   85.     Compare   Ee 
flame  ground.     See  3  C.  B.  (N.  S.)  552.        Albion  Life  Assur.  Soc,  16  Ch.  D.  83. 
(i)  3  Best  &  Sm.  847. 

46 


€HAP.  I.,  §  II.]  QUASI    PARTNERSHIP.  32* 

In  Bullen  v.  Sharp  (/)  the  whole  profits  of  a  son's  business  were 
assioned  over  to  his  father  and  another  person  upon  trust,  first,  to  pay 
the  father  £500  a  year,  to  be  increased  to  a  sura  equal  to  one-fourth  of 
the  profits  when  one-fourth  thereof  amounted  to  more  than  £500  a 
year ;  secondly,  to  pay  an  annuity  to  the  son  ;  thirdly,  to  form  a  reserve 
fund  for  the  benefit  of  the  son  ;  and  fourthly,  to  pay  the  residue  of 
the  profits  to  the  son.  The  Court  of  Common  Pleas  held  the  father 
liable  for  the  engagements  of  the  son  upon  the  ground  that  the  profits 
havino-  been  assigned  to  him,  he  had  a  direct  interest  in  the  business. 
On  appeal,  however,  this  decision  was  reversed,  on  the  ground  that 
the  business  was  really  the  son's,  and  that  the  father's  interest  in  it 
was  not  such  as  to  render  the  son  his  agent  for  carrying  it  on. 

In  Shaw  V.  Galt(??i)  it  was  held  that  a  clerk,  entitled  to  a  fixed 
salary,  and  in  addition  thereto  to  one-third  of  the  net  profits  of  the 
business  of  his  employers,  was  not  liable  to  their  creditors.  The 
salary  and  share  of  profits  were  only  intended  as  a  remuneration  for 
his  services,  and  the  profits  were  to  be  ascertained  from  balance-sheets 
prepared  by  the  employers  upon  the  principle  theretofore  adopted  by 
them. 

In  Holme  v.  Hammond  (n)  five  persons  agreed  to  become  partners 
for  seven  years,  and  to  share  profits  and  losses  equally,  and  they 
further  agreed  that  if  any  partner  died  within  the  seven  years,  the  sur- 
vivors should  continue  the  business  and  pay  to  the  executors  of  the 
deceased  partner  the  same  share  of  profits  which  he  would  have  had  if 
living.  One  of  the  partners  died ;  he  had  no  capital  in  the  firm,  but 
on  his  *death  the  firm  was  indebted  to  him  in  respect  of  un- 
drawn  profits  and  other  matters.  After  his  death  the  business  '- 
was  carried  on  by  the  survivors;  his  execuTtors  took  no  part  in  the 
management  of  the  business,  but  they  claimed  one-fifth  of  the  profits  ^ 
made  since  his  death,  and  they  were  furnished  with  accounts  in  which 
thev  were  credited  with  such  profits.  The  plaintiff  sued  the  executors 
in  respect  of  a  contract  made  by  the  surviving  partners  after  the  death 
of  the  deceased  partner,  but  it  was  held  that  the  executors  were  not 
liable ;  for  the  surviving  partners  were  not  their  agents,  and  althowgh 
the  case  did  not  fall  within  the  provisions  of  28  and  29  Vict.,  c.  86, 
it  was  governed  by  the  principles  laid  down  in  Cox  v.  Hickman. 

{I)  L.  R.,  1  C.  P.  86,  reversing  18  C.  B.        (m)  16  Ir.  Com.  L.  Eep.  357. 
<N.  S.)  614.  in)  L.  R,  7  Ex.218. 

47 


33*  CASES    FOLLOWING   COX   V.    HICKMAN.  [bOOK  I., 

Again,  in  Mollwo,  March  &  Co.  v.  Court  of  Wards,  (o)  a  person 
advanced  large  sums  of  money  to  merchants,  and  took  as  a  security  a 
charge  on  their  business,  with  extensive  powers  of  control,  and  stipu- 
lated for  a  large  commission  on  their  profits  whilst  anything  remained 
due  to  him,  and  for  payment  of  his  principal  and  twelve  per  cent, 
interest.  The  lender  had  not,  in  fact,  taken  any  profits,  and  the  above 
arrangement  was  afterwards  varied  by  his  taking  a  mortgage  for  his 
principal  and  interest.  He  was  held  not  liable  for  debts  contracted  by 
them  whilst  the  above  agreement  was  in  force.  The  court  held  that 
the  transaction  was  really  a  loan.  It  was  urged  in  vain  that  even  if 
there  was  no  partnership,  the  debtors  were  the  agents  of  the  creditor 
to  earn  the  principal,  interest  and  commission  to  which  he  was  entitled. 
But  this  contention  very  properly  failed ;  there  being  no  more  reason 
for  inferring  agency  than  partnership  from  an  agreement  to  share 
profits. 

Observations  on  these  cases. — There  can  be  no  doubt  that  in  all 
these  cases  the  decisions  would  have  been  the  other  way  had  they 
occurred  before  Cox  v.  Hickman  ;  and  they  are  particularly  valuable 
as  showing  that  the  principles  on  which  that  case  was  decided  by  the 
House  of  Lords  may  now  be  safely  relied  upon,  in  opposition  to  the 
old  rule  which,  before  that  important  decision,  was  considered  too 
firmly  settled  to  be  questioned.  In  fact,  the  strong  tendency  of  the 
above  decisions  is  to  establish  the  doctrine  that  no  *person  who 
■J  does  not  hold  himself  out  as  a  partner  is  liable  to  third  per- 
sons for  the  acts  of  persons  whose  profits  he  shares,  unless  he  and  they 
are  really  partners  inter  se,  or  unless  they  are  his  agents ;  (p)  and,  in 
the  author's  opinion,  this  is  now  the  law.  (9)  At  the  same  time,  per- 
sons may  find  that  they  are  partners  for  all  purposes,  although  they 
only  intended  to  be  so  for  purposes  beneficial  to  themselves,  (r) 

For  the  guidance,  however,  of  those  who  may  think  that  the 
writer  has  gone  too  far  in  representing  the  old  law  as  completely  super- 
seded, the  following  more  limited  propositions  are  submitted  as  at  least 

(0)  L.  K.,  4  P.  C.  419.  Compare  Pooley  v.  Hammond,  L.  R.,  7  Ex.  218  ;  Mollwo, 
V.  Driver,  5  Ch.  Div.  458,  noticed  infra,  March  &  Co.  v.  Court  of  Wards,  L.  R.,  4 
p.  *38.  '      P.  C.  419.     See,  also.  Ex  parte  Tennant, 

(p)  As  in  Steel  v.  Lester,  3  C.  P.  D.  121.    6  Ch.  D.  303. 

(g)  See  Baron  Bramwell's  judgment  in  (r)  See  Pooley  v.  Driver,  5  Ch.  D.  458, 
BuUen  v.  Sharp,  L.  R.,  1  C.  P.  86  ;  Holme   noticed  infra,  p.  *38. 

48 


CHAP.  I.,  §  II.]  QUASI    PARTNERSHIP.  34* 

conclusively  established,  and  as  applicable  even  in  cases  not  within  28 
and  29  Vict.,  c.  86. 

Effect  of  Cox  V.  Hickman. — 1.  That  persons  who  share  the  profits 
of  a  business  are,  like  other  persons,  only  liable  for  the  acts  of  them- 
selves and  of  their  real  or  ostensible  agents. 

2.  That  whether  in  any  particular  case  the  relation  of  principal  and 
agent  does  or  does  not  exist  between  one  person  who  carries  on  a 
business  and  another  person  who  shares  its  profits  de[)ends  not  upon 
the  mere  fact  that  the  business  is  carried  on,  more  or  less,  for  the  benefit 
of  the  latter,  but  upon  all  the  circumstances  of  the  case. 

3.  That  the  relation  of  principal  and  agent  is  not  constituted  merely 
by  an  agreement  which  entitles  one  person  to  share  the  gross  returns 
of  ^business  or  adventure  conducted  by  another. 

*^  That  the  relation  of  principal  and  agent  is  not  constituted  merely 
b|^n  agreement  which  entitles  one  person  to  be  paid  definite  sums 
)f  ^the  profits  made  by  another. 

THiat  the  relation  of  principal  and  agent  is  not  constituted  merely 
agreement  which  entitles  one  person  to  be  paid  sums  varying 
witlTthfe  profits  made  by  another. 

^T|lat  the  relation  of  principal  and  agent  is  not  constituted  merely 
ie\xistence  of  a  trust,  entitling  one  person  to  profits  made  by 
Br. 

Thai  prima  facie  the  relation  of  principal  and  agent  is 
constituted  by  an  agreement  entitling  one  person  to  share  the    ^ 
profits  made  by  another  to  an  indefinite  extent,  but  that  this  inference 
is  displaced  if  it  appears  from  the  whole  agreement  that  no  partner- 
ship or  agency  was  really  intended. 

8.  That  in  these,  as  in  all  other  cases,  the  courts  will  be  astute  to 
defeat  fraud,  and  to  hold  partnerships  to  be  created  if  they  are  in- 
tended, although  the  intention  may  be  carefully  concealed. 

The  first,  second,  fourth  and  sixth  of  these  rules  appear  to  be  war- 
ranted by  Cox  V.  Hickman  and  Molhvo,  March  &  Co.  v.  Court  of 
Wards ;  the  third  and  fifth,  by  older  authorities,  not  touched  by  those 
decisions ;  the  seventh  is  probably  the  most  correct  mode  of  expressing 
the  effect  of  Cox  v.  Hickman  and  Mollwo,  March  &  Co.  v.  Court  of 
Wards  on  Waugh  v.  Carver,  and  other  cases  of  that  class ;  the  eighth 
speaks  for  itself,  and  is  illustrated  by  Pooley  v.  Driver  and  Ex  parte 
Delhasse,  which  will  be  noticed  presently. 

49  4 


35*  EFFECT   OF   COX   V.    HICKMAN.  [bOOK  I., 

3.  2' he  ad  of  28  and  29  Vict.,  c.  86. 

In  order  to  amend  the  law  by  which  persons  sharing  profits  were 
held  liable  to  losses,  the  act  of  28  and  29  Vict.,  c.  86,  was  passed. 
This  act  (commonly  called  Bovill's  act)  is  entitled  "An  act  to  amend 
the  law  of  partnership."  It  received  the  royal  assent  on  the  5th  of 
July,  1865,  and  enacts  as  follows  : 

1.  The  advance  of  money  by  way  of  loan  to  a  person  engaged,  or  about  to  engage, 
in  any  trade  or  undertaking,  upon  a  contract  in  writing  with  such  person  that  the 
lender  shall  receive  a  rate  of  interest  varying  with  the  profits,  or  shall  receive  a  share 
of  the  profits  arising  from  carrying  on  such  trade  or  undertaking,  shall  not,  of  itself,  con- 
stitute the  lender  a  partner  with  the  person  or  the  persons  carrying  on  such  trade 
or  undertaking,  or  render  him  responsible  as  such. 

2.  No  contract  for  the  remuneration  of  a  servant  or  agent  of  any  person  engaged 
in  any  trade  or  undertaking  by  a  share  of  the  profits  of  such  trade  or  undertaking 
shall,  of  itself,  render  such  servant  or  agent  responsible  as  a  partner  therein,  nor  give 
him  the  rights  of  a  partner,  (s) 

*3.  No  person  being  the  widow  or  child  of  the  deceased  partner  of  a  trader, 
J  and  receiving,  by  way  of  annuity,  a  portion  of  the  profits  made  by  such  trader 
in  his  business,  shall,  by  reason  only  of  such  receipt,  be  deemed  to  be  a  partner  of  or  to 
be  subject  to  any  liabilities  incurred  by  such  trader. 

4.  No  person  receiving,  by  way  of  annuity  or  otherwise,  a  portion  of  the  profits  of 
any  business,  in  consideration  of  the  sale  by  him  of  the  good  will  of  such  business, 
shall,  by  reason  only  of  such  receipt,  be  deemed  to  be  a  partner  of  or  be  subject  to  the 
liabilities  of  the  person  carrying  on  such  business. 

5.  In  the  event  of  any  such  trader  as  aforesaid  being  adjudged  a  bankrupt,  or 
taking  the  benefit  of  any  act  for  the  relief  of  insolvent  debtors,  or  entering  into  an 
arrangement  to  pay  his  creditors  less  than  twenty  shillings  in  the  pound,  or  dying  in 
insolvent  circumstances,  the  lender  of  any  such  loan  as  aforesaid  shall  not  be  entitled 
to  recover  any  portion  of  his  principal,  or  of  the  profits  or  interest  payable  in  respect 
of  such  loan,  nor  shall  any  such  vendor  of  a  good  will  as  aforesaid  be  entitled  to 
recover  any  SHch  profits  as  aforesaid  until  the  claims  of  the  other  creditors  of  the 
said  trader  for  valuable  consideration  in  money  or  money's  worth  have  been  satis- 
fied. (0 

Interpretation  of  "person." — 6.  In  the  construction  of  this  act  the  word  "person" 
shall  include  a  partnership  firm,  a  joint-stock  company,  and  a  corporation. 

Upon  the  foregoing  enactment  it  is  to  be  observed — 

Effect  of  the  statute. — 1.  That  it  applies  to  au  extremely  limited 

(s)   §«(Ere  if  this  deprives  him  of  a  right  (t)  See  Ex  parte  Mills,  8  Ch.  569;  and 

to  an  account?    See  Harrington  i).  Church-  Re  Stone,  33  Ch.  D.  541.     But  a  secured 

ward,  6  Jur.  (N.  S.)  576.     The  object  of  creditor  can  sell  or  foreclose,  as  the  case 

the  act  was  not  to  deprive  the  servant  of  may  be,  even   to   the  prejudice  of  other 

his  rights  against  his  master,  but  to  pro-  creditors.  Baddeley  v.  Consolidated  Bank, 

tect  each  from   liability  to  third   parties  34  Ch.  D.  536. 
by  reason  of  the  acts  of  the  other. 

50 


CHAP.  I.,  §  II.j  QUASI   PARTNERSHIP.  36* 

number  of  cases,  aud  leaves  wholly  untouched  a  large  inimLer  of 
agreements  of  common  occurrence,  e.  g.,  all  such  as  had  to  be  dealt 
Avith  in  Waugh  v.  Carver,  Smith  v.  Watson,  Cheap  v.  Cramond  and 
Cox  V.  Hickman.  All  such  cases,  however,  must  now  be  dealt  with 
on  the  principles  laid  down  by  the  House  of  Lords  in  the  last-named 
case,  {xi) 

2.  That  it  in  no  way  modifies  the  doctrine  by  which  persons  who 
hold  themselves  out  as  partners  incur  the  liabilitijes  of  partners. 

3.  That  to  entitle  a  person  lending  money  to  the  benefit  of  the  act 
there  must  be  a  contract  in  writing  ;  and  it  seems  that  such  contract 
must  be  signed,  {x) 

4.  That   in    the   case    of   servants,   agents,   widows  and    children, 
*and  of  persons  selling  a  good  will,  there  is  nc   necessity  for    p^o7 
anv  contract  in  wi'iting. 

5.  That  unless  a  retiring  partner  is  brought  within  the  first,  second 
or  third  section,  he  is  in  no  better  position  than  other  persons. 

6.  That  the  persons  within  the  second  and  third  sections  are  not 
within  the  fifth. 

7.  That  persons  who  lend  money  or  sell  a  good  will  in  consideration 
of  a  share  of  profits  cannot,  in  respect  of  such  loan  or  profits,  compete 
with  any  other  creditors  upon  a  distribution  of  their  debtors'  assets.  (3/) 

8.  That  the  third  section  only  applies  to  widows  and  children  of 
deceased  partners  of  traders,  i.  e.,  it  is  jiresumed,  of  persons  formerly 
liable  to  be  adjudicated  bankrupt  as  traders. 

9.  That  the  fifth  section  does  not  deprive  the  lender  of  his  right  to 
retain  any  security  he  may  take  for  his  money,  [z)  nor  to  foreclose  such 
security,  (a) 

10.  That  the  act  may  be  made  an  instrument  of  fraud,  if  a  person 
is  allowed  to  lend  to  the  same  person  a  small  sum  in  consideration  of 
a  large  share  of  profits,  and  a  large  sum  in  consideration  of  fixed 
interest.  In  such  a  case  if  a  fraud  were  intended,  it  would  probably 
be  defeated  by  holding  the  lender  liable  as  a  partner,  or,  at.  least,  by 
holding'  him  to  be  within  the  fifth  section  as  to  both,  loans.     But 


(w)  See  Holme  v.  Hammond,  L.  R.,  7  [y)  Ex   parte  Taylor,  12  Ch.  D.  366; 

Ex.  218;  Mollwo,  March  &  Co.  v.  Court  Ex  parte  Corbridge,  4  Ch.  D.  246. 

of  Wards,  L.  R.,  4  P.  C.  419.  (z)  Ex  parte  Shell,  4  Ch.  D.  789. 

(x)  Pooler  V.   Driver,    5   Ch.   D.   458,  (a)  Baddeley  v.  Consolidated  Bank,  34 

where,   however,  there  was  only  a  draft  Ch.  D.  536. 
rontract. 

51 


37*  28  AND  29  VICT.,  c.  86.  [book  i., 

where  there  is  no  fraud,  a  person  who  has  advanced  money  under  the 
act,  and  has  also  bona  fide  made  other  advances  not  under  it,  can,  on 
the  bankruptcy  of  the  borrower,  prove  for  the  latter  advances,  although 
not  for  the  former.  (6)  A  person,  however,  who  lends  money  on  the 
terms  of  sharing  profits  and  then  agrees  to  take  a  fixed  rate  of  interest 
instead  of  them,  is  within  the  fifth  section  of  the  act  and  cannot  prove 
in  competition  with  other  creditors,  (c) 

11.  That  it  is  apparent  from  the  words  " of  itself '  and  "by  reason 
only,''  in  the  first  four  sections  of  the  statute,  that  it  was  not  intended 
to  relieve  persons  who  are  really  partners  (although  dormant)  from  the 
liabilities  incident  to  that  position.  ^Agreements  intended  to 
-I  secure  the  benefit  of  the  act  to  lenders  of  money  are  con- 
stantly framed  with  all  sorts  of  clauses  which  expose  them  to  the  risks 
they  are  so  anxious  to  avoid. 

Cases  not  within  the  ad. — In  Baddeley  v.  Consolidated  Bank  (d)  a 
lender  of  money  to  a  railway  contractor  on  the  security  of  his  plant, 
and  on  the  terms  of  receiving  interest  and  a  share  of  his  profits,  was 
held  to  be  liable  to  his  debts,  the  formal  contract  between  the  parties 
being,  in  truth,  a  device  to  conceal  the  fact  that  they  were  really 
partners. 

In  Ex  parte  Delhasse  (e)  it  was  held  that  a  loan  to  a  firm  on  the 
security  of  the  business  of  the  borrowers  and  to  be  repaid  out  of  it, 
coupled  with  a  power  to  dissolve  their  partnership,  was  not  within 
the  act. 

In  Syers  v.  Syers(/)  the  plaintiff  lent  the  defendants  money  on  the 
terms  that  they  should  execute  a  deed  of  partnership  giving  the 
plaintiff  a  share  of  the  profits  in  the  business  of  the  defendants,  to  be 
drawn  up  under  the  statute  in  question ;  and  it  was  held  that  this 
agreement  constituted  the  parties  to  it  partners  in  the  business. 

In  Poolev  V.  Driver  [g)  a  carefully  drawn  agreement,  intended  to 
secure  to  the  lender  the  benefit  of  the  statute,  signally  failed  to  do  so. 
In  that  case  A  and  B  entered  into  partnership  for  fourteen  years,  with 
a  capital  of  £30,000,  of  which  £10,000  was  to  be  raised  by  way  of 

(b)  See  Ex  parte  Mills,  8  Ch.  5G9.  Mollwo,  March  &  Co.  v.  Court  of  Wards, 

(c)  Re  Stone,  33  Cli.  D.  541.  L.  R.,  4  P.  C.  419,  noticed  ante  p.  *33,  and 
{(l)  34Ch.D.  536.    The  correspondence    with    Ex  parte   Tennant,   6   Ch.   D.  303, 

was  relied  upon  to  show  the  real  truth.  where  a  father  claimed  to   be  a  partner 

(e)  7  Ch.  D.  511.  with  his  son,  contrary  to  the  true  meaning 

(/)  1  A  pp.  Cas.  174.  of  an  agreement  framed  to  avoid  a  part- 

{g)  5  Ch.  D.  458.     Compare  this  with  nership, 

52 


CHAP.  I.,  §  II.]  QUASI    PARTNERSHIP.  38* 

loan  under  the  above  act.  The  capital  was  to  be  divided  into  sixty 
shares  of  £500  each,  of  which  twenty  were  to  belong  to  the  persons 
advancing  the  £10,000,  in  proportion  to  their  advances.  The  net 
profits  were  to  be  also  divided  into  sixty  shares,  of  which  twenty  were 
to  belong  to  the  same  persons  in  the  same  proportion.  At  the  end  of 
the  partnership  an  account  was  to  be  taken  in  the  usual  way,  the 
moneys  advanced  were  to  be  returned ;  but  if  it  appeared  that  the 
persons  advancing  the  £10,000  had  received  more  than  their  shares  of 
profits,  the  excess  was  to  be  refunded,  but  not  *to  an  amount  p^^„ 
exceeding  their  advances.  C  advanced  £2500  to  A  and  B  ^ 
on  the  terms  of  an  agreement,  which  incorporated  the  agreement  be- 
tween A  and  B,  which  provided  for  the  employment  of  the  capital 
(including  C's  advances)  in  the  business,  gave  C  liberty  to  inspect  and 
take  copies  of  the  partnership  books,  entitled  him  to  five-sixtieths  of 
the  estimated  annual  profits  of  the  business,  and  provided  for  a  final 
account  and  repayment,  at  the  end  of  the  partnership,  of  the  £2500, 
unless  it  should  appear  that  he  had  received  more  than  his  share  of 
profits,  in  which  case  he  was  to  refund  the  excess,  not  exceeding  his 
£2500. 

There  was  also  a  clause  empowering  A  and  B  to  pay  out  the  £2500 
in  the  event  of  C's  bankruptcy,  or  of  any  dispute  between  the  parties, 
and  an  arbitration  clause.  This  agreement  with  C  was  drawn  up  in 
writing,  but  remained  in  draft,  and  was  never  signed.  But  D  also 
advanced  money  on  the  same  terms,  embodied  in  a  written  agreement 
duly  signed  by  him  and  A  and  B.  It  was  held  by  Jessel,  M.  R. : 
1.  That  the  unsigned  draft  agreement  with  C  was  not  a  sufficient 
writing  to  bring  the  case  within  the  statute ;  2.  That  the  signed  agree- 
ment with  D  did  not  entitle  him  to  the  protection  of  the  statute ;  and 
3.  That  notwithstanding  Cox  v.  Hickman,  and  that  class  of  cases  [ante 
p.  *30),  both  C  and  D  were  dormant  partners,  and  liable  as  such  for 
the  debts  of  A  and  B.  The  judgment  in  this  case  is  very  important, 
and  well  deserves  attentive  study.  It  proceeded  upon  the  ground  that 
partnership  is  prima /acie  the  result  of  participation  in  profits;  and 
that  the  true  result  of  the  whole  arrangement  was  that  the  advances 
were  not  real  loans,  but  were,  in  truth,  contributions  of  capital  under 
color  of  loans. 

One  of  the  most  remarkable  features  of  this  case  was  that  when  the 
time  arrived  for  the  repayment  of  the  advances,  it  might  be  found 
that  not  only  was  there  nothing  to  repay,  but  that  the  so-called  lenders 

53 


39*  POOLEY  V.    DRIVER.  [bOOK  I.^ 

might  have  to  refund  part  of  what  they  had  already  received,  even  to 
the  extent  of  tiieir  so-called  loans.  (A)     This  practically  araocmted  to 
a  possible  loss  of  their  advances,  and  distinguished  the  case  at  once 
^  from  a  true  *contract  of  loan  ;  for  in  such  a  contract  the  money 

^    lent  is  to  be  repaid  intact,  and  the  only  risk  run  is  the  insol- 
vency of  the  borrower.  (i^23 

2.  By  holding  oneself  out  as  a  jmrtner. 

Persons  who  hold  themselves  out  as  partners  incur  the  liabilUies  of  partners. 

The  other  mode,  in  which  a  person  not  a  i)artner  becomes  liable  as 
if  he  were  one,  is  by  so  conducting  himself  as  to  lead  other  people  to 
suppose  that  he  is  willing  to  be  regarded  by  them  as  if  he  were  a  partner 
in  point  of  fact.  The  principle  of  this  is  obvious  and  satisfactory, 
and  is  well  laid  down  by  Eyre,  C.  J.,  in  the  great  case  of  Waugh  v. 
Carver,  (k)     His  lordship  there  said  : 

"  Now  a  case  may  be  stated  iu  which  it  is  the  clear  sense  of  the  parties  to  the  con- 
tract that  they  shall  not  be  partners,  that  A  is  to  contribute  neither  labor  nor  money, 
and,  to  go  still  further,  not  to  receive  any  profits.  But  if  he  will  lend  his  name  as  a 
partner,  he  becomes,  as  against  all  the  rest  of  the  world,  a  partner,  not  upon  the 
ground  of  the  real  transaction  between  them,  but  upon  principles  of  general 
policy,  to  prevent  the  frauds  to  which  creditors  would  be  liable  if  they  were  to  sup- 
pose that  they  lent  their  money  upon  the  apparent  credit  of  three  or  four  persons, 
when,  in  fact,  they  lent  it  only  to  two  of  them,  to  whom,  without  the  others,  they 
would  have  lent  nothing." 

The  doctrine  that  a  person  holding  himself  out  as  a  partner,  and 
thereby  inducing  others  to  act  on  the  faith  of  his  representations,  is 
liable  to  them  as  if  he  were  in  fact  a  partner,  is  nothing  more  than  an 
illustration  of  the  general  principle  of  estoppel  by  conduct.  (/)  24 

{h)  See  the  clauses,  5  Ch.  D.  463,  466,  Berkom  w  Smith,  1  Esp.  29. 

and  the  comment  on  them  at  p.*492.  {I)  As  to  which,  see  Pickard  v.  Sears,  6 

(ij  Seean<ep.*16.  A.  &  E.  469;  Freeman  v.  Cooke,  2  Ex. 

23.  For  an   extended   and   interesting  654;  Carr  v.  L.  &  N.  W.  Rail.  Co.,  L.  R., 

discussion  of  this  subject,  see  article  by  10  C.  P.  316. 

Guy  C.  H.  Corliss,  30  Alb.  L.  .J.  26.  24.   General  rule  as  to  holding  out — 

(«)  Waugh  V.  Carver,  2  H.  B I.  2:-!5.  See  the  estoppel. — The  rule  is  well  settled, 
Scarf  V.  Jardine,  7  App.  Cas.  345,  now  the  l-y  numerous  adjudications,  that  one  who 
leading  case  on  this  subject.  The  prin-  holds  himself  out  to  the  world  as  a  part- 
ciple  will  be  found  stated  to  tlie  same  ner,  and  thereby  obtains  credit  himself,  or 
effect  in  Ex  pane  Watson,  19  Ves.  461  •  gives  credit  to  the  firm,  will  be  held  re- 
Ex  parte  Matthews,  3  Ves.  A:  B.  125;  De  sponsible  as  such,  though,  in  fact,  he  is 

54 


CHAP.  L,  §  II.] 


QUASI    PARTNERSHIP. 


40* 


Efed  of  knowledge  that  a  person  who  holds  himself  out  as  a  partner 
is  not  a  partner. — It  is  therefore  wholly  immaterial  whether  the  per- 
son holding  himself  out  as  a  partner  does  or  does  not  share  the  profits 
or  losses,  (m)  Nay  more,  even  if  it  *be  known  that  he  does 
not  share  either,  still  he  may  be  liable.  For  although  a  per-  '- 
son  who  lends  his  name  may  stipulate  for  an  indemnity  from  those 
who  use  it,  it  by  no  means  follows  that  he  ought  not  to  be  liable  to 
third  parties  merely  because  they  are  aware  of  such  stipulation.  His 
name  does  not  induce  credit  the  less  on  account  of  his  right  to  be 
indemnified  by  others  against  any  loss  falling  in  the  first  instance  on 
himself;  and  although,  in  the  case  supposed,  he  cannot  be  believed  to 
be  a  partner,  the  lending  of  his  name  does  justify  the  belief  that  he  is 
willing  to  be  responsible  to  those  who  may  be  induced  to  trust  to  him 
for  payment,  (n) 

However,  in  Alderson  v.  Pope  (o)  Lord  Ellenborough  held   "  that 


rot  a  partner.  Benedict  v.  Davis,  2  Mc- 
Lean (U.  S.)  347  ;  Buckingham  v.  Burgess, 
3  Id.  364,  549 ;  Campbell  v.  Hastings,  29 
Ark.  512;  Carmichael  v.  Grier,  55  Ga. 
116;  Daily  v.  Coons,  64  Ind.  545;  Han- 
cock V.  Hintrager,  60  Iowa  374 ;  Wood- 
ward V.  Clark,  30  Kan.  78 ;  Rice  v.  Bar- 
rett, 116  Mass.  312. 

If  credit  be  given  on  the  strength  of  the 
holding  out,  the  party  is  bound  on  the 
principle  of  estoppel.  Cirkel  v.  Ellis,  31 
N.  W.  Rep.  513.  In  a  suit  against  a  firm, 
the  jury  are  not  required  to  decide  whether 
the  partnership  actually  existed,  but  only 
whether  it  was  held  out  to  the  plaintiffs  as 
existing.  Young  v.  Smith,  25  Mo.  341  ; 
Shackleford  v.  Smith,  Id.  348 ;  Stephen- 
son V.  Cornell,  10  Ind.  475.  The  principle 
is  the  same  whether  the  holding  out  be  as 
to  a  single  enterprise  or  the  assertion  of  a 
general  partnership.  Shafer  v.  Randolph, 
99  Pa.  St.  250. 

Thus,  where  an  obligation,  signed  by 
two  persons  with  defendant,  is,  on  his  rep- 
resentation that  he  is  a  member  of  a  part- 
nership, exchanged  for  another  signed  by 
the  latter  alone,  he  cannot,  in  an  action 
by  the  holder,  deny  that  he  is  a  partner. 
Burbank  v.  Haas,  9  La.  Ann.  528.     Not- 


withstanding the  person  held  out  as  a 
partner,  or  dormant  partner,  has  not 
signed  the  articles  of  partnership,  he  may 
be  sued  and  held  jointly  with  those  who 
did  sign  them.  Wood  v.  Cullen,  13  Minn. 
394  And  the  fact  that  a  number  of  per- 
sons held  themselves  out  as  partners,  will, 
prima  facie,  establish  a  partnership  in  an 
action  by  them  against  third  persons,  or 
by  one  standing  in  the  same  position. 
McCarthy  v.  Nash,  14  Minn.  127. 

In  Tarns  v.  Hitner  (9  Pa.  St.  441),  two 
out  of  three  partners  gave  a  note,  in  the 
name  of  the  two,  as  a  distinct  firm,  but 
the  three,  in  the  course  of  their  business, 
induced  the  belief  that  such  was  their 
firm  name.  Held,  that  all  three  were  lia- 
ble as  partners,  on  the  note. 

(m)  Ex  parte  Watson,  19  Ves.  461.  See, 
also,  Kirkwood  v.  Cheetham,  2  Fost.  &  F. 
798,  where  A  was  B's  agent,  and  A  held 
himself  out  as  B's  partner  ;  both  A  and  B 
were  decided  to  be  liable  for  goods  sup- 
plied to  A  for  B.  Compare  Hardman  v. 
Booth,  1  Hurlst.  &  C.  803. 

(n)  See  ace.  Brown  v.  Leonard,  2  Chitty 
120. 

(o)  1  Camp.  404,  note. 


00 


41*  BY   HOLDING  OUT.  [bOOK  I., 

where  there  was  a  stipulation  between  A,  B  and  C,  who  appeared  to 
the  world  as  copartners,  that  C  should  not  participate  in  the  profit  and 
loss,  and  should  not  be  liable  as  a  partner,  C  was  not  liable  as  such  to 
those  who  had  notice  of  this  stipulation,  and  that  notice  to  one  mem- 
ber of  a  firm  was  notice  to  the  whole  partnership."  The  report  of 
this  case  states  no  more  than  what  is  here  extracted,  and  the  reader  is 
left  in  doubt  as  to  the  meaning  of  the  words  "  should  not  be  liable  as 
a  partner."  If  these  words  meant  that  C  was  to  be  indemnified  by  A 
and  B,  the  observations  already  made  show,  it  is  conceived,  that  the 
decision  was  erroneous.  But  if  they  meant  that  C  would  not  be  liable 
at  all  to  third  parties  for  the  acts  of  A  and  B,  then  the  question  would 
arise  whether  this  was  not  altogether  inconsistent  with  C's  conduct,  and 
whether  the  maxim  '^ Protestatio  facto  contraria  non  valet"  would  not 
apply.  In  any  point  of  view  the  reported  note  of  the  case  is  unsatis- 
factory. 25 

Effect  of  fraud. — Moreover,  if  a  person  has  been  induced  by  pi'om- 
ises  of  irresponsibility  or  by  fraud  to  hold  himself  out  as  a  partner 
with  others,  this  circumstance  does  not  relieve  him  from  liability 
to  third    parties   who    have    been   induced   by   his   conduct   to  trust 

^,^-,    *him  as  well  as  them,  and  who  have  had  nothing  to  do  with 
*421  .  .  . 

"-'    the  promises  or  fraud  practiced  upon  him.  (p) 

Observations   on   the  phrase   "  holding   ouf — The    expression    in 

Waugh  V.  Carver,  "  If  he  will  lend  his  name  as  a  partner,  he  becomes, 

as  against  all  the  rest  of  the  world,  a  partner,"  requires  qualification ; 

25.  The  holding  out  must  have  been  out,  the  principle  of  estoppel  does  not  ap- 
relied  on. — The  principle  npon  which  a  ply,  and  the  party  held  out  is  not  a  part- 
liability  as  a  partner  is  fastened  upon  one  ner  as  respects  such  creditor.  Thompson 
who  is  in  fact,  not  a  partner,  being  analo-  o.  First  Nat.  Bank,  111  U.  S.  529 ;  Filch 
gous  to  that  of  an  estoppel  in  pais,  it  fol-  v.  Harrington,  13  Gray  (Mass.)  468  ;  Bene- 
lows  that  where  one  is  not  misled  to  his  diet  v.  Davis,  2  McLean  (U.  S.)  347. 
prejudice,  either  positively  or  tacitly,  by  (p)  See  Collingwood  v.  Berkeley,  15  C. 
the  party  whom  he  seeks  to  hold  liable,  B.  (N.  S.)  145 ;  Maddick  v.  Marshall,  16 
there  can  be  no  such  estoppel.  Marble  v.  C.  B.  (N.  S.)  387,  and  17  Id.  829  ;  Ellis  v. 
Lypes,  2  So.  Rep.  701.  The  mere  act  of  Schmoeck,  5  Bing.  521 ;  Ex  parte  Broome, 
holding  out  does  not  make  the  party  held  1  Rose  69.  It  will  be  seen  in  the  volume 
out,  in  fact,  a  partner,  nor  render  him  lia-  relating  to  companies  that  persons  in- 
ble  as  such,  except  to  those  who  are  there-  duced  to  join  companies,  by  the  false  and 
by  led  to  believe  he  is  a  partner,  and  who  fraudulent  statements  of  directors,  cannot, 
give  credit  to  the  supposed  firm  upon  such  on  that  ground,  escape  from  liability  to 
belief.  Wood  v.  Pennell,  51  Me.  52.  If  creditors, 
the  creditor  be  ignorant  of  the  holding 

56 


OHAP.  I.,  §  II.]  QUASI    PARTNERSHIP.  42* 

for  the  real  ground  on  which  liability  is  incurred  by  holding  oneself 
out  as  a  partner  is  that  credit  has  been  thereby  obtained.  This  was 
put  with  great  clearness  by  Lord  Wensleydale  in  Dickinson  v. 
Valpy,  (g)  in  which  he  said :  "  If  it  could  have  been  proved  that  the 
defendant  had  held  himself  out  to  be  a  partner,  not  to  the  world,  for 
that  is  a  loose  expression,  but  to  the  plaintiff  himself,  or  under  such 
circumstances  of  publicity  as  to  satisfy  a  jury  that  the  plaintiff  knew 
of  it  and  believed  him  to  be  a  partner,  he  would  be  liable  to  the 
plaintiff  in  all  transactions  in  which  he  engaged,  and  gave  credit  to  the 
defendant,  upon  the  faith  of  his  being  such  partner.  The  defendant 
would  be  bound  by  an  indirect  representation  to  the  plaintiff  arising 
from  his  conduct  as  much  as  if  he  had  stated  to  him  directly  and  in 
express  terms  that  he  was  a  partner  and  the  plaintiff  had  acted  upon 
that  statement."  (r) 

What  constitutes  a  ^^  holding  out." — Further,  a  person  may  hold 
himself  out  or  permit  himself  to  be  held  out  as  a  partner,  and  yet 
conceal  his  name.  He  may  be  referred  to  as  a  person  who  does  not 
wish  to  have  his  name  disclosed  ;  and  if  he  is  so  referred  to  by  his 
authority  he  will  incur  liability  as  a  quasi  partner,  (s)  But  it  follows, 
from  the  principles  above  explained,  that  a  person  cannot  be  liable  on 
a  contract,  on  the  ground  that  he  held  himself  out  as  a  partner,  unless 
he  did  so  before  the  contract  was  entered  *into.  (t)  It  also  j.^ 
follows  that  no  person  can  be  fixed  with  liability  on  the  ^ 
ground  that  he  has  been  held  out  as  a  partner,  unless  two  things  con- 
cur, viz.,  first,  the  alleged  act  of  holding  out  must  have  been  done 
either  by  him  or  by  his  consent,  (u)  and  secondly,  it  must  have  been 
known  to  the  person  seeking  to  avail  himself  of  it.  (a;)  In  the  absence 
of  the  first  of  these  requisites,  whatever  may  have  been  done  cannot 
be  imputed  to  the  person  sought  to  be  made  liable ;  and  in  the  absence 

iq)  10  B.  &  C.  140.     See,  also,  Ford  v.  Id.  387,  and  17  Id.  829. 

Whitmarsh,  Hurlst.  &  W.  N.  P.  53.     Lord  (i)  Baird  v.  Planque,  1  Fost.  &  F.  344, 

Blackburn,  in  Scarf  v.  Jardine,  7  App.  (u)  In  Fox  v.  Clifton,  6  Bing.  776 ;  Ed- 

Cas.  357,  expressed  the  same  idea  in  dif-  mundson  v.  Thompson,  2  Fost.  &  F.  564, 

ferent  words.  and  8  Jur.  (N.  S.)  235,  the  actions  failed 

(r)  See,  too,  Vice  v.  Anson,  7  B.  &  C.  on  this  ground.     See,  also,  Cornelius  v. 

409,  where  the  defendant  held  herself  out  Harrison,  2  Fost.  &  F.  758. 

as  a  partner,  but  not  to  the  plaintiff.  (x)  Pott  v.  Eyton,  3  C.  B.  32,  failed  on 

(a)  Martyn  v.  Gray,  14  C.  B.  (N.  S.)  this  ground. 
824.     See,  also,  Maddick  v.  Marshall,  16 

57 


43^ 


BY    HOLDING    OUT. 


[book  I.,. 


of  the  second,  the  person  seeking  to  make  him  liable  has  not  in  any 
way  been  misled,  (y)^^ 

Continued  use  of  old  name  after  retirement  of  petrtner. — An  instruct- 
ive case  on  tliis  head  is  Newsome  v.  Coles,  {z)  There  a  firm  of  four 
partners  carried  on  business  under  the  name  of  Thomas  Coles  & 
Sons.  Thomas  Coles  died,  but  tlie  three  sons  carried  on  business  in 
the  old  name  for  a  few  years ;  they  then  dissolved  partnership,  two  of 
them  establishing  a  new  business  and  the  other  continuing  the  old 
business  alone,  but  in  the  old  name.  The  dissolution  was  advertised 
in  the  "  Gazette."     The  plaintiff,  who  did  not  know  of  tlie  dissolu- 


(y)  See,also,  the  American  case,  Thomp-    of  a  father  in  placing  his  infant  son  in  a 

son  V.  First  National  Bank  of  Toledo,  4    firm,  as  a  partner,  has  been   held   to  be 

Davis  Sup.  Ct.  531.  «"cli  a  taking  part  in  the  business  on  the 

26.  What  constitutes  a  holding  out. —    part  of  the  father  as  to  make  him  liable 

The  person  sought   to  be   charged  as  a    to    creditors    as    a    partner   in    the   firm. 

partner,  on  this  ground  of  estoppel,  must    Miles  v.  Wann,  27  Minn.  56. 

be  shown  to  have  rfojiesomefAmg' calculated        On  the  other  hand,  it  has  been   held 

to  create  a  belief  that  he  was  a  partner,    that  entries  in  the  books  of  a  firm  are  not 

and  to  have  misled  the  plaintiff.     Pringle    evidence  against  any  one  to  show  that  he 

V.  Leverich,  48  N.  Y.  Super.  Ct.  90.     This    is  a  member  of  the  firm  (Abbott  v.  Pear- 

"  holding  out"  may  be  by  words  spoken    son,  130  Mass.  191);  and  that  a  general 

or  written,  or  by  conduct  leading  to  the    manager  of  a  firm  who,  duly  authorized, 

belief  that  a  partnership  exists.     Cirkel  v.    uses    the   firm    name    in   transacting    its 

Ellis,  31  N.  W.  Rep.  513;  Harris  v.  Sess-    business,  and  signs  it  to  a  contract  which 

ler,  3  S.  W.  Rep.  316.     Thus,  one  who    he  has  personally  concluded,  is  not  liable 

"  represents  himself  as  a  partner,"  or  per-    as  a -partner  unless   he  has  aflarmatively 

mits  others  to  do  so  (Daily  v.  Coons,  64    held   himself    out   as  such.      Ihmsen  v. 

Ind.  545;  Rice  t).  Barrett,  116  Mass.  312) ;    Lathrop,   104   Pa.  St.  365.      So,   also,  a 

or  who  so  conducts   himself   in    buying    statement  in  a  newspaper,  to  the  effect 

goods  as  to  induce  the  belief  that  he  is  a    that  a  certain   person   is  a  member  of  a 

member  of  the  firm  he  buys  for  (Hancock    certain  firm,  which  does  not  purport  to  be 

V.    llintrager,    60    Iowa    374) ;     or    who    inserted  by  the  firm,  is  not  admissible  to 

knowingly  permits  his  name  to  be  used  as    charge  the  person  referred  to  as  a  partner, 

a  member  of  a  firm  (Campbell  v.  Hast-    merely  on  proof  that  he  was  a  subscriber 

ings,  29  Ark.  512;  Carmichael  v.  Grier,    to  the  paper  at  that  time,  and  never  re- 

55  Ga.   116),  thereby  incurs  a  partner's    quested  the  editor  to  deny  such  statement. 

liability  as  towards  those  who  are  misled    Potter   v.  Greene,    9   Gray   (Mass.)    309. 

therebv.  A"d  evidence  that  A  was  a  partner  in  a 

So,  also,  the    appearance   by  an    indi-    certain    company    in   September,  and,  a* 

vidual,  in  an  action  against  a  partnership,    such,  signed  contracts   reciting  a  contract 

who  files  a  plea  to  the  merits,  takes  an    made  by  the  company  in  March,  is  not 

active  part  in   the  proceedings,  and  takes    competent  in  order  to  charge  him  upon  a 

an  appeal,  is  a  conclusive  admission  that    debt  contracted  by  the  company  in  July. 

he  is  a  member  of  the  firm.     McCaskey    Butler  i-.  Henry,  3  S.  \V.  Rep.  878. 

V.  PpUock,  2  So.  Rep.  674.     And  the  act        {z)  2  Camp.  617. 

58 


CHAP.  I.,  §  11.]  QUASI    PARTNERSHIP. 


43^ 


tioii,  but  had  had  no  dealings  with  the  firm  before  its  dissolution^ 
souo-ht  to  make  all  three  brothers  liable  on  a  bill  accepted,  after  the  dis- 
solution, by  the  one  brother,  who  continued  to  trade  under  the  old 
name,  and  had  accepted  the  bill  in  that  name.  The  two  other 
brothers,  however,  had  never  held  themselves  out  to  the  plaintiff  that 
they  were  partners  in  any  firm  of  the  name  of  Thomas  Coles  & 
Sons ;  they  had  done  nothing  to  authorize  the  use  of  that  name  after 
the  dissolution  ;  at  the  same  time  they  knew  that  the  old  name  ^vas  still 
used,  and  they  had  taken.no  steps  to  prevent  such  use.  This,  however, 
it  was  held,  they  were  not  bound  to  do,  and  the  plaintiff  failed.  The 
case  would  have  been  decided  differently  if  the  plaintiff  had  been  a 
customer  of  the  firm  before  its  dissolution,  for  in  that  *case 
-'  he  would  have  been  justified  in  supposing  that  there  had  been 
no  change  in  the  firm.  («) 

Application  of  doctrine  to  inchoate  partnerships,  &c. — A  person  ^vho 
holds  himself  out  as  willing  to  become  a  partner  does  not  incur  liability 
bv  so  doing.  Although  a  person  who  represents  himself  to  be  a  part- 
ner is  properly  held  liable  as  a  partner  to  persons  who  have  acted  on 
the  faith  of  his  being  so,  it  would  be  in  the  highest  degree  unjust  to 
confound  a  representation  by  a  person  that  he  intended  to  become  a 
partner,  with  a  representation  that  he  was  one  in  point  of  fact,  and  to 
hold  him  as  much  liable  to  third  parties  for  the  one  representation  as 
for  the  other.  This  distinction  was  recognized  and  acted  on  in  Bourne 
V.  Freeth,  (6)  where  the  defendant,  who  had  signed  a  prospectus  con- 
taining the  terms  on  which  it  was  proposed  to  form  a  company,  was 
held  not  to  have  held  himself  out  as  a  shareholder  therein. 

"Holding  out,"  a  question  of  fact. — Whether  a  defendant  has  or  has 
not  held  himself  out  to  the  plaintiff  is  in  every  case  a  question  of  fact, 
not  a  question  of  law,  and  the  consequence  is  that  there  is  great  ap- 
parent conflict  in  the  cases  on  this  head.  In  Wood  v.  The  Duke  of 
Argyll,  (c)  and  in  Lake  v.  The  Duke  of  Argyll,  (cZ)  the  very  same  acts 
were  relied  on  as  a  holding  out,  viz.,  being  advertised  as  president  of  a 
society,  acting  as  president  at  a  meeting,  and  signing  some  resolutions 
then  agreed  upon.     In  the  first  case  this  was  considered  not  sufficient 

(a)  See  the  note  in  2  Camp.  620.     See,  kins,  lb.     Compare  Martyn  v.  Gray,  14  C. 

also,  Carter  v.  Whalley,  1  B.  &  Ad.  11,  B.  (N.  S.)  824. 

infra,  book  II.,  c.  2,  §  3.  (c)  6  Man.  &  G.  928. 

(6)  9  B.  &  C.  632.     See,  too,  Reynell  v.  {d)  6  Q.  B.  477. 
Lewis,  15  M.  &  W.  517,  and  Wyld  v.  Hop- 

59 


44*  BY   HOLDING  OUT.  [bOOK  I., 

and  the  defendant  had  a  verdict ;  whilst  in  the  last  it  was  considered 
to  be  sufficient  and  the  plaintiff  had  a  verdict.  The  jury  was  asked 
whether  the  defendant  had  held  himself  out  as  intending  to  pay  for 
the  work  charged,  and  the  question  was  answered  in  the  affirmative  in 
the  one  case,  and  in  the  negative  in  the  other,  and  the  court  in  each 
case  refused  to  disturb  the  verdict,  27 

Defendant  held  out  by  others. — The  most  difficult  cases  of  this  class 
occur  where  the  defendant  has  not  held  himself  out,  but  where  he  has 
been  held  out  by  others,  and  he  alleges  that  they  had  no  authority  to 
do  so.  If  they  had  no  such  authority  he  is  not  liable,  (e)  But  express 
*authority  is  not  necessary;  authority  may  be  inferred  from  ,-.  ,p.  ' 
his  conduct ;(/)  and  if  a  person  has,  by  signing  prospectuses,  *- 
or  allowing  his  name  to  be  put  to  them,  {g)  or  by  being  party  to  reso- 
lutions, {h)  or  by  his  own  statements,  though  not  intended  to  be 
repeated,  {%)  or  has  in  any  other  way  so  conducted  himself  as  in  fact  to 
have  authorized  the  holding  out  which  he  repudiates,  he  will  not 
escape  liability.  28 

Observations  on  the  liabilities  of  promoters  of  companies,  &g. — It 
cannot  be  too  carefully  borne  in  mind,  in  all  cases  of  this  description, 
that  a  person  who  is  neither  a  partner  nor  a  qiMsi  partner,  is  liable  on 
the  general  principles  of  agency  for  acts  done  by  others,  with   his 

27.  See,  also,  Palmer  v.  Pinkham,  37  Biss.  (U.  S.)  328;  15  Bankr.  Reg.  126. 
Me.  252 ;  Chase  v.  Stevens,  19  N.  H.  464.    S.  P.,  Swann  v.  Sanborn,  4  Woods  (U.  S.) 

(e)  Ante  p.  43,  note  (u).  625.     In  other  words,  one  person  cannot 

(/)  See  the  last  two  cases.  give  himself  credit  as  a  partner  of  another, 

(gr)  Collingwood  v.  Berkeley,  15  C.  B.  by  holding  himself  out  as  such,  without 

(N.  S.)  145.  the  consent,  express  or  implied,  of  such 

(A)  Maddick  v.  Marshall,  16  C.  B.  (N.  other  person  (Crook  v.  Davis,  28  Mo.  94); 

S.)  387,  and  17  Id.  829.  and  a  person  falsely  held  out  as  a  partner 

(i)  Martyn  v.  Gray,  14  C.  B.  (N.  S.)  without  his  knowledge,  is  not  required  to 

S24.  use  diligence  in  ascertaining  and  contra- 

28.  Defendant  held  out  by  others. —  dieting  the  report.  Campbell  v.  Hastings, 
When  one  person  permits  another  to  29  Ark.  512.  See,  also,  Poillon  v.  Secor, 
hold  him   out  as  a  partner,  and   thereby  61  N.  Y.  456. 

procures   credit   on    the   strength   of   his        But  where  two  persons  authorize  a  third 

supposed  relation,  neither  community  of  to  represent  and  hold  himself  out  as  their 

interest  nor  participation  in  the  profits  is  partner,  and  in  pursuance  thereof  he  does 

necessary  to  render  him  liable  as  a  part-  so,  this  is  as   much  their  holding  them- 

ner.     But,  in   order   to  render  a  person  selves  out  as  if   the  representations  had 

liable  on  this  ground,  he  must  have  had  been  made  by  them  in  person.     Hinman 

knowledge  that  he  was  held  out,  or  there  v.  Little,  23  Mich.  484.     See,  also,  on  this 

must  be  circumstances  from  which  notice  subject.  Hicks  v.  Cram,  17  Vt.  449. 
can   be   imputed    to  him.     Re  Jewelt,  7 

60 


CHAP.  I.,  §  II.]  BY    HOLDIXG    OUT.  45* 

authority,  express  or  implied.  If,  therefore,  directors,  members  of 
committees,  managers  of  clubs,  or  any  other  persons  not  in  partner- 
ship, pass  resolutions  that  work  shall  be  done  or  goods  supplied,  they 
authorize  whatever  may  be  done  in  pursuance  of  such  resolutions,  and 
they  are  the  persons  naturally  looked  to  and  prima  facie  liable  to  pay 
for  what  may  be  so  done,  (k)  The  question*  in  these  cases  is  simply 
one  of  agency,  and  the  question  of  partnership  or  no  partnership  is 
immaterial,  save  that  if  a  partnership  can  be  established,  the  liability 
of  one  member  for  the  acts  of  the  others  in  the  prosecution  of  their 
common  object  follows  almost  as  a  matter  of  course. 

Holding  out  by  retiring  partner. — In  cases  where  partners  carry  on 
business  under  a  name  which  does  not  disclose  who  the  partners  are, 
the  doctrine  of  holding  out  must  be  applied  with  care.  Suppose  A 
and  B  carry  on  business  under  the  name  of  X  &  Co.  Neither  A  nor 
B  holds  himself  out  as  a  member  of  that  firm  to  any  one  who  does 
not  know  their  connection  with  it.  (/)  If,  therefore,  A  retires  from 
the  firm,  and  gives  no  notice  of  his  retirement,  he  will  still  be  liable 
to  old  customers  who  knew  of  his  connection  with  X  &  Co.,  and  who 
continue  to  deal  with  it  on  *the  faith  that  A  is  still  a  mera- 
^  ber  of  it ;  but  A  will  incur  no  liability  to  new  customers  of 
X  &  Co.  who  never  heard  of  him.  (m)  Further,  if  on  A's  retirement 
C  joins  B,  and  B  and  C  carry  on  business  as  X  &  Co.,  even  an  old 
customer  of  X  &  Co.,  who  goes  on  dealing  with  it  without  notice  of 
A's  retirement  or  C's  admission,  cannot  truly  say  that  A  ever  held 
himself  out  as  partner  with  C,  or  with  both  B  and  C,  and,  conse- 
quently, even  an  old  customer  cannot  maintain  an  action  against  A,  B 
and  C  jointly  for  a  debt  contracted  by  X  &  Co.  after  A's  retirement. 
The  old  customer  can,  in  the  case  supposed,  sue  A  and  B  on  the 
ground  that  he  dealt  with  X  &,  Co.  on  the  faith  of  A  and  B  being 
still  the  members  of  that  firm ;  or  he  can  sue  B  and  C  on  the  ground 
that  they  are  his  real  debtors ;  but  he  must  elect  between  A  and  B  on 
the  one  hand  and  B  and  C  on  the  other ;  he  cannot  (in  the  case  sup- 
posed) sue  A,  B  and  C  on  the  ground  that  B  and  C  are  in  truth  X  & 
Co.,  and  that  A  is  estopped  from  denying  that  he  is  a  member  of  that 

{k)  See  the  cases  in  the  last  five  notes,  field,  9  B.  &  C.  401 ;   Burls  v.  Smith,  7 

and  Chapleo  v.  Brunswick  Build.  Soc,  6  Bing.  705. 

Q.  B.  D.  696  ;  Firbank's  Exr.  v.  Hum-  (/)  See  Newsome  v.  Coles,  ante  p.  *43. 

phreys,   18  Q.   B.  D.  54 ;    Doubleday  v.  (m)  See  Newsome  t'.Coles,  ante  p.  *43. 
Muskett,  7  Bing.  110 ;  Braithwaite  v.  Ska- 

61 


46*  QUASI    PARTNERSHIP.  [bOOK    I., 

firm.  This  was  decided  in  Scarf  v.  Jardine.  {n)  This  case  would  be 
otherwise  if  A  and  B  carried  on  business  in  their  own  names,  and  A 
retired  and  C  came  in,  and  if  B  and  C  carried  on  business,  with  A's 
consent,  under  the  name  of  A,  B  and  C.  In  such  a  case  A  would 
hold  himself  out  as  in  partnership  with  both  B  and  C,  and  would  be 
estopped  from  denying  it  as  against  any  one  dealing  with  the  new  firm 
on  the  faith  of  A  being  a  member  of  it. 

Further,  if  the  old  customer  did  not  know  of  A's  retirement,  but 
did  know  that  C  had  bev..^me  a  member  of  X  &  Co.,  such  customer 
would,  it  is  apprehended,  be  entitled  to  sue  A,  B  and  C  jointly  for  a 
debt  contracted  by  X  &  Co.  after  A's  retirement  and  C's  admission,  (o) 

Holding  out  by  surviving  'partner. — If  a  partner  dies  and  the  sur- 
vivino-  partners  continue  the  old  business  in  the  old  name,  this  will  not 
have  the  eifect  of  rendering  the  estate  of  the  deceased  liable,  even  to 
old  *customers  or  correspondents  of  the  firm,  for  acts  done  by  p^ ,  _ 
the  survivors  after  the  death  of  their  late  copartner.  The 
doctrine  of  holding  out  has  never  been  applied  to  such  a  case,  and  the 
executor  of  the  deceased  incurs  no  liability  by  the  continued  use  of  the 
old  name,  {p)  Even  if  the  executor  is  the  surviving  partner  using  the 
old  name,  that  will  not  make  any  diiference  ;  for  although,  as  executor, 
he  can  give  a  lien  on  his  testator's  estate,  ordinary  debts  contracted  by 
him  do  not  charge  it.  [q)'^^ 

{n)  7  App.  Cas.  345.     This  case  will  be  port  its  continued  existence  as  a  universal 

referred    to    hereafter   when   considering  partnership,  alleged  by  a  surviving  part- 

the  liability  of  retired  partners.  ner,  must  be  very  clear.     Gray  v.  Palmer, 

(o)  Scarf  V.  Jardine  is  not  an  authority  9  Cal.  616.     Surviving   members  of   the 

ao-ainst   this   proposition,  nor    are    Lord  firm  who,  after  its  dissolution,  do  not  give 

Selborne's   observations   in    7  App.  Cas.  themselves  out  to  the  world  as  commer- 

350,  as  the  author  understands  them.  cial  partners,  are  not  bound  in  solido  with 

{}■))  See  Webster  v.  Webster,  3  Swanst.  those  who  do.     Cooper  v.  Burns,   6   La. 

490;  Devaynesr.  Noble  (Houlton's  Case),  Ann.  740.     Thus,  the  publication  of  an 

1  Mer.  616 ;  Vulliamy  v.  Noble,  3  Mer.  advertisement    signed    by    A    alone,    an- 

(514.  nouncing  that  "having  bought  the  inter- 

(q)  See  Farhall  v.  Farhall,  7  Ch.  123;  est  of  B  in  the  above  business,  I  will  con- 
Owen  V.  Delamere,  15  Eq.  134;  but  see  tinue  it  under  the  firm  of  A  &  Co.,  admit- 
Yulliamy  v.  Noble,  3  Mer.  614.  See  fur-  ting  C  and  D  to  interests  from  this  date," 
ther  on  this  subject,  infra,  book  IV.,  c.  1,  is  not  alone  sufiicient  to  warrant  the  in- 
^  2.  ference  that   C   and  D  are   admitted   as 

29.  Holding  out  by  surviving  part-  partners.     Appeal  of   Scull,  7  Atl.  Kep. 

ner.— Where  a  firm  is  dissolved  by  the  588:  followed   Johnston's  Appeal,  9   Id. 

death  or  retirement  of  one  of  the  partners.  76;  Ackroyd's  Appeal,  Id.  77  ;  Sanqnoit 

it  has  been  held  that  the  evidence  to  sup-  Silk  Manuf.  Co.'s  Appeal,  Id.  77. 

62 


■CHAP.  I.,  §  III.]  BY    HOLDING   OUT.  47* 

Torts. — The  doctrine  of  holding  out  only  applies  in  favor  of  per- 
sons who  have  dealt  with  a  firm  on  the  faith  that  the  person  whom 
they  seek  to  make  liable  is  a  member  of  it.  (r)  The  doctrine  is  en- 
tirely misapplied  when  it  is  extended  beyond  the  principle  on  which  it 
rests.  For  example,  it  has  no  application  to  actions  of  tort  arising 
from  the  negligent  conduct  of  a  firm  where  no  trust  has  been  put  in  it. 
In  Stables  v.  Eley  (s)  a  retired  partner,  whose  name  was  on  a  cart,  was 
held  liable  for  the  negligence  of  its  driver.  But  although  in  that  case 
there  may  have  been  evidence  to  go  to  the  jury  that  the  defendant 
was  liable,  proof  by  him  that  the  driver  was  not  his  servant  would 
liave  rendered  him  not  liable. 


^SECTION   III. OF   SUBPAETNERSHIPS. 

*48] 

A  subpartnership  is,  as  it  were,  a  partnership  within  a  partnership. 
It  presupposes  the  existence  of  a  partnership  to  which  it  is  itself  sub- 
ordinate. An  agreement  to  share  profits  only  constitutes  a  partnership 
between  the  parties  to  the  agreement.  If,  therefore,  several  persons 
are  partners  and  one  of  them  agrees  to  share  the  profits  derived  by 
him  with  a  stranger,  this  agreement  does  not  make  the  stranger  a  part- 
ner in  the  original  firm.  The  result  of  such  an  agreement  is  to  con- 
stitute what  is  called  a  subpartnership,  that  is  to  say,  it  makes  the 
parties  to  it  partners  inter  se,  but  it  in  no  way  affects  the  other  mem- 
bers of  the  principal  firm.  30 

"Socius  mei  sooii  socius  mens  non  est.'' — In  the  language  of  civilians, 
"Socius  mei  socii  sooius  mens  non  est."  {t)     In  Ex  parte  Barrow  (w) 

(r)  See  Scarf  v.  Jardine,  7  App.  Cas.  knowledge  aud   consent  of  all   the  luem- 

357,  and  a/iYe  p.  *42.  bers  of  the  firm,  is  liable  as  a  partner. 

(s)  Stables  v.  Eley,  1  C.  &  P.  tJl4.     See  See,  also,  Letzerj;.  Beale,  19  W.  Va.  274. 

Pollock  on  Partn.  (3d  ed.)  25,  where  this  So,  where  the  agreement  of  the  stranger  is 

blunder  was  first  pointed  out.  not  merely  to  share  in  the  profits  of  one 

30.  See  Burnett  ?;.Snyder,43N.Y.Super.  of  the  partners,  but  to  share  in  the  profits 

Ct.  238,  where  the  doctrine  stated  in  the  and  losses  of  the  business,  he  is  a  partner, 

text  is  upheld,  but  where  it  is  also  decided  Arquimbo  v.  Hillier,  49  N.  Y.  Super.  Ct. 

that  one  who  becomes  a  joint  owner  with  253. 

a  partner  of  his  share  in  a   partnership,        (0  See  Pothier  on  Part.,  §  91. 
standing    in   his   name   alone,   with   the        (m)  2  Rose  252. 

63 


48*  SUBPARTNERSHIPS.  [bOOK    I.,. 

Lord  Eldon  puts  the  law  on  this  subject  very  clearly.  "  I  take  it," 
he  says,  "  to  have  been  long  since  established,  that  a  man  may  become 
partner  with  A  where  A  and  B  are  partners,  and  yet  not  be  a  member 
of  that  partnership  which  existed  between  A  and  B.  In  the  case  of 
Sir  Charles  Ilaymond,  a  banker  in  the  city,  a  Mr.  Fletcher  agreed 
with  Sir  Charles  Raymond  that  he  should  be  interested  so  far  as  ta 
receive  a  share  of  his  profits  of  the  business,  and  which  share  he  had 
a  ritrht  to  draw  out  from  the  firm  of  Ilavmond  &  Co.  But  it  was 
held  that  he  was  no  partner  in  that  partnership,  had  no  demand 
acrainst  it,  had  no  account  in  it,  and  that  he  must  be  satisfied  with  a 
share  of  the  profits  arising  and  given  to  Sir  Charles  Raymond."  (x) 

Liability  to  creditors. — Since  the  decision  of  the  House  of  Lords  in 
Cox  V.  Hickman  {ante  pp.*30-*35),  a  subpartner  cannot  be  held  liable- 
to  the  creditors  of  the  principal  firm  by  reason  of  his  participation  in 
the  profits  thereof,  {y)  31 


*SECTION   rV. — OP   GENERAL   AND   PARTICULAR 
PARTNERSHIPS. 


[*49 


Universal  partnerships. — It  is  customary  for  writers  on  partnership- 
law  to  iivide  partnerships  into  universal,  general  and  particular  (or 
special  or  limited),  according  to  the  extent  of  the  contract  entered  into 
bv  the  members.  The  classification  is  traceable  to  a  passage  in  the 
Digest — '' Societates  contrahuntur  sive  universorum  honorum,  sive 
negotiationis  aliGujus,  sive  vectigalis,  sive  etiam  rei  unius  "  (z) — and  is 
not  worth  enlarging  upon,  except  for  the  purpose  of  distinguishing 
cases  in  which  persons  are  partners  in  some  trade  or  business  generally 

(x)  See,  too,  Bray  v.  Froraont,  6  Madd.  agreement  is  that  the  stranger  is  to  par- 

5 ;  Ex  parte  Dodgson,  Mont.  &  Mac.  445.  ticipate  in  the  share  of  one  of  the  partners- 

(y)  See,  on  this  subject,  the  Scotch  case  of  the  profits  of  the  firm,  as  profits,  this- 

of  Fairholme  v.   Marjoribanks,   3    Ross'  renders  him  liable,  as  a  partner,  to  the- 

Lead.  Cas.  on  Com.  Law  697.  creditors  of  the  firm,  although,  as  regards 

31.  The  rule  stated  in  the  text  is  the  the  other  members,  he  is  not  their  partner, 

one  in  force  in  New  York.     Burnett  v.  Fitch  v.  Harrington,  13  Gray  (Mass.)  468. 

Snyder,  81  N.  Y.  550  ;  S.  C,  76  N.  Y.  344 ;  See,  also,  Bailey  v.  Clark,  6  Pick.  (Mass.)- 

4-b  N.  Y.  Super.  Ct.  577  ;  43  Id.  238;  but  372. 

in  Massachusetts  it  is  lield  that  where  tiie        (z)  Dig.  xvii.,  tit.  2  {pro  socio),  1.  5  pr. 

64 


CHAP.  I.,  §  IV.] 


SPECIAL   PARTNERSHIPS. 


49* 


from  those  in  which  they  are  partners  in  some  particular  transaction 
or  adventure  only.  32 

Partnership  in  one  'partiGular  transaction  only. — If  persons  who  are 
not  partners  agree  to  share  the  profits  and  loss,  or  the  profits,  of  one 
particular  transaction  or  adventure,  they  become  partners  as  to  that 
transaction  or  adventure,  but  not  as  to  anything  else.  («)  For  example, 
if  two  solicitors,  who  are  not  partners,  are  jointly  retained  to  conduct 
litigation  in  some  particular  case,  and  they  agree  to  siiare  the  profits 
accruing  therefrom,  they  become  partners  so  far  as  the  business  con- 
nected with  that  particular  case  is  concerned,  but  no  further.  (6)  So, 
a  partnership  may  be  limited  to  the  working  of  some  particular 
patent'  (c)  or  to  the  working  of  it  in  some  particular  place  or  dis- 
trict, {d)  In  all  such  cases  as  these  the  rights  and  liabilities  of  the 
partners  are  governed  by  the  same  principles  as  those  which  apply  to 
ordinary  partnerships ;  (e)  but  such  rights  and  liabilities  are  necessarily 
less  extensive  than  those  of  persons  who  have  entered  into  less  limited 
contracts.  The  extent  to  which  persons  can  be  considered  as  partners 
depends  entirely  on  the  agreement  into  which  they  have  entered  and 
upon  their  conduct.  33 


32.  Universal  partnerships. — Where  &  R.  415. 
two  brothers  formed  a  partnership  with-        (e)  See  Reid  v.  Hollinsliead,  4  B.  &  C. 

out  written  articles,  and  continued  in  part-  867,  and  the  cases  cited  in  notes  (a)  and 

nersliip,  greatly  extending  their  business,  {b). 

and  engaging  in  various  enterprises,  for  33.  Partnership  in  particular  trans- 
thirty  years  or  more — Held,  that  the  part-  action. — The  rule  tliat  a  partnership  may 
nersliip  must  be  deemed  a  general  and  exist  in  a  single,  as  wc?ll  as  in  a  series  of 
unlimited  one  ;  that  all  their  property  of  transactions  (Kayser  v.  Maugham,  8  Colo, 
every  description  was  owned  in  common ;  232\  has  been  applied  in  the  following 
and  that  the  separate  acts  of  one  brother,  cases,  in  each  of  which  it  was  held  that 
however  disastrous  and  unsatisfactory  to  such  a  partnership  existed  :  Where  there 
the  other,  if  done  in  good  faith,  were  part-  is  a  joint  purchase,  with  a  view  to  a  joint 
nersliip  transactions.  Lyman  v.  Lyman,  sale  and  a  communion  of  profit  and  loss. 
2  Paine  (U.  S.)  11.  Re  Warren,  Daveis  (U.  S.)  320.  Where 
(a)  See  De  Berkom  v.  Smith,  1  Esp.  29  ;  two  individuals  purchase  an  article  on 
H^yhoe  v.  Burge,  9  C.  B.  431 ;  Smith  v.  joint  account,  and  ship  it.  In  such  case 
*^atson,  2  Bi  &  C.  401 ;  see,  as  to  partner-  they   are   liable   for   advances    made  for 

^■13,  *14.  their  joint  concern.     Felichy  t;.  Hamilton, 

Beav.  98,  1  Wash.  (U.  S.)  491.      Where  two   agree 

l^d  Tk^e  Q.,  M.  &  G.  239 ;  McGregor  v.  to  make  a  voyage  jointly,  each  contribut- 

Bainbrigge,  7  Hare  164.  ing   time  and    services,    and   sharing   in 

^c)  As  inLovelH'.  Hicks,  2  Y.  &C.  Ex.  profits  and  losses  (and  freight  earned  in 

^         .  in  the  voyage  cannot  be  reached   by  trus- 

*{d)  %.s  iir.Ridgway  v.  Philip,  1  Cr.,  M.  tee  process  as  the  property  of  one  of  them 

^  65  5 


^V^atson,  z  ^  iK  (J.  4Ui ;  see,  as  tc 

•$Bips  invprimts  only,  ante  pp.  *1J 

f!jj(6)  Robinson  v.  Anderson,  20 


60* 


CLUBS,  ETC. 


BOOK   I., 


^50] 


*SECTION  V. OF  CLUBS  x\.ND  SOCIETIES  NOT  HAVING 


GAIN  FOR    THEIR   OBJECT. 


Societies  not  having  gain  for  their  object. — It  follows  from  the  propo- 
sitions established  in  the  foregoing  pages  that  no  partnership  or  quasi 
partnership  subsists  between  persons  who  do  not  share  either  profit  or 
loss,  and  who  do  not  hold  themselves  out  as  partners. 

Societies  and  clubs,  the  object  of  which  is  not  to  share  profits,  are 
not  partnerships,  nor  are  their  members  as  such  liable  for  each  other's 
acts.  It  was  held  in  Caldicott  v.  Griffiths  (/ )  that  the  members  of 
"  The  Midland  Counties  Guardian  Society  for  the  Protection  of  Trade" 
were  not  partners  inter  se;  and  in  Flemyng  v.  Hector  (^)  that  the 
members  of  the  "  Westminster  Reform  Club  "  were  not  partners  as 
against  third  persons,  (h)  Such  associations,  although  they  consist 
of  more  than  twenty  members,  need  not  be  registered  under  the  Com- 
panies acts,  1862.  (i)  It  is  a  mere  misuse  of  words  to  call  such  asso- 
ciations partnerships,  {j)  and  if  liabilities  are  to  be  fastened  on  any  of 
their  members  it   must   be   by  reason   of  the  acts  of  those  members 

alone).  Balfinch  ?-.  Wiiichenback,  3  Allen  So,  also,  it  is  held  that  one  who  bu^-s 
(Mass.)  161.  Where  grain,  received  at  a  and  sliips  for  a  firm  of  another  city,  using 
mill  as  toll,  is  mixed  up,  and  becomes  the  their  funds,  the  profits  or  loss  to  be  divi- 
subject  of  traffic  between  the  defendants,  ded,  and  each  shipment  to  be  a  distinct 
each  being  part  owner,  and  interested  in  venture,  is  not  a  partner.  Marsh  y.  North- 
the  proceeds  of  the  sale.  Benson  v.  M'Bee,  western  Ins.  Co.,  3  Biss.  (tJ.  S.)  351. 
2  McMull.  (S.  C.I  91.  Evidence  that  defendants  are  not  general 

On  the  other  hand,  in  the  following  partners  or  connected  in  business,  is  irrele- 
cases,  the  parties  were  held  not  to  be  part-  vant  and  inadmissible,  where  the  object 
ners,  even  in  the  particular  transaction  in  is  to  charge  them  as  partners  in  a  single 
question :  Where  two  firms  shared  a  cer-  transaction.  Schallenberger  v.  Seldon- 
tain  venture,  and  kept  a  bank  account  in    ridge,  49  Pa.  St.  83. 

the  name  of  one  firm,  adding  the  word  (/)  8  Ex.  893.  See,  too,  R.  v.  Whit- 
"  Co.,"  and  so  signed  the  checks.  Re  marsh,  15  Q.  B.  600 ;  Bear  v.  Bromley, 
Warner,  7  Bankr.  Reg.  47.  Where  two  18  Id.  271,  as  to  their  not  requiring  regis- 
wool  firms  agreed  to  furnis  i  each  a  stated  tration  under  the  repealed  act,  7  and  8 
proportion  of  a  quantity  of  wool  to  be  sold  Vict.,  c.  110. 
to  a  certain  vendee,  and  to  s'hare  profit  (g)  2  M.  &  W.  172. 
and  loss  in  the  transaction.  Snell  v.  De  (h)  See,  too,  Todd  v.  Emley,  8  M.  &  W. 
Land,  43  111.  323.  Where  there  is  a  series  505  ;  The  St.  James  Club,  2  De  G.,  M. 
of  independent  transactions  wherein  one    &  G.  383. 

finds  money  and   buys  lands  selected  by        (i)  Re  Siddall,  29  Ch.  D.  1.     They  may 
the  other,  profits  being  divided  when  tlie    be  wound  up  under  the  act,  as  will   be 
lands  are  sold  again.     Wells  v.  Atwaler,    seen  in  the  volume  on  that  subject. 
33  Minn.  83.  (j)  See  ante  p.  *2.     R.  v.  Robson,  16  Q. 

66 


CHAP.  I. 


§  v.] 


CLUES,  ETC. 


50* 


themselves,  (k)  or  by  reason  of  the  acts  of  their  agents  ;  and  the  agency 
must  be  made  out  by  the  person  who  relies  on  it,  for  none  is  implied 
by  the  mere  fact  of  association.  (I)  34 

"^Societies  in  which  each  member  acts  for  himself  only. — Upon  . 
the  ground  that  there  is  neither  community  of  profit  nor  com- 
munity of  loss,  it  has  been  held  that  no  partnership  subsists  between 
the  members  of  a  mutual  insurance  society,  in  which  each,  in  consid- 
eration of  a  payment  made  to  him,  underwrites  a  policy  for  a  stipulated 
sum.  A  policy  so  underwritten  is  neither  more  nor  less  than  a  num- 
ber of  separate  contracts,  whereby  each  underwriter  agrees,  on  a  given 
event,  to  pay  the  whole  or  a  proportionate  part  of  the  sum  written 
against  his  name.     In  such  a  society  there  is  no  joint  stock  ;  the  mem- 

B.  D.  137.  In  Lloyd  v  Loaring,  6  Ves.  In  Lafond  v.  Deems,  supra,  it  was  held 
773,  the  Caledonian  Lodge  of  Freemasons,  that  the  accumulation  of  a  fund  by  such 
and  in  Silver  v.  Barnes,  6  Bing.  X.  C.  180,  a  society,  not  in  business,  but  in  transac- 
and  Beaumont  I'.  Meredith,  3  Ves.  &B.  180,  actions  incidental  to  its  primary  object, 
friendly  societies  were  called  partner-  did  not  convert  the  society  into  a  partner- 
ships.    In  Minnitt  v.  Lord  Talbot,  L.  R  ship. 

Ir.,  1  Ch.  D.  143.  persons  who  had  advanced  So,  also,  in  Michigan,  it  is  held  that  an 

money  to  add  to  and  improve  a  club  were  association  the  conditions  of  membership 

held  to  have  a  lien  on  the  property  for  in  which  are  payment  of  an  entry  fee  and 

their  money.  P™  '"^'^'^  assessments,  but  which  does  no 

(k)  As  in  Cross  v.  Williams,  7  Hurlst.  &  business  involving  profit  and  loss,  is  not 

N.  675,  where  the  commandant  of  a  rifle  a  partnership;  and  the  members  are  not 

.corns  was  held  liable  for  all  uniforms  he  personally  liable  on  contracts  made  by  its 

had  ordered.  officers.     Burt  v.  Lathrop,  52  Mich.  106. 

(/)  Compare  Flemyng  v.  Hector,  2  M.  If,    however,    the    members    sanction    or 

&  W.  172,  and  Wood  v.  Finch,  2  Fost.  &  acquiesce  in  the  creation  of  debts  by  the 

F.  447,  where  the  agency  was  not  estab-  ofScers,   they  are  liable  for   such  debts. 


lished,  with  Luckombe  v.  Ashton,  2  Fost. 
&  F.  705;  Cockerell  v.  Aucompte,  2  C. 
B.  (N.  S.)  440;  Burls  v.  Smith,  7  Bing. 
705,  and  Delauney  v.  Strickland,  2  Stark. 


Devoss  V.  Gray,  22  Ohio  St.  159.  See, 
also,  Ridgely  v.  Dobson,  3  W.  &  S.  (Pa.) 
118  ;  Sproat  v.  Porter,  9  Mass.  300.  Thus, 
where  certain  members  of  a  club  expressly 


416  where  the  agency  was  established,  authorized  their  president  to  execute  a 
In  Luckombe  v.  Ashton,  and  Burls  v.  note  in  the  name  of  the  club,  and  for  its 
Smith,  the  defendant  was  a  member  of  use,  which  was  done,  such  members  be- 
the  managing  committee.  This  was  not  came  partners  as  to  this  particular  trans- 
the  case  in  Cockerell  v.  Aucompte,  or  De-  action,  and  were  each  liable  to  the  payee 
launey  v.  Strickland.  See,  too,  Thomas  v.  under  the  common  name  assumed  by 
Edwards,  2  M.  &  W.  215  them.     Ferris  v.  Shaw,  5  Mo.  App.  279. 

34.  Societies  and  clubs. — Richmond  So,  individual  members  of  a  club  are 
1  Judy,6Mo.  App.  465;  Lafond  ?;.  Deems,  liable  for  work  done  with  their  concur- 
81  N.  Y.  507 ;  Ash  v.  Guie,  12  Rep.  281  ;  rence  or  subsequent  approval,  where  the 
Ebbinghousen  v.  Worth  Club,  4  Abb.  (N.  credit  was  given  to  members  of  the  club. 
Y.)  X  Cas.  300,  note.  Rchmond  v.  Judy,  6  Mo.  App.  465. 

67 


51^ 


CLT'BS,  ETC. 


[book  I. 


bers  of  it  enter  into  no  joint  contract,  but  each  is  alone  liable  for  any- 
loss  which  may  liappen  to  the  insured,  according  to  the  terras  of  the 
contract  into  M-hich  each  for  himself  has  entered,  (m) 

With  respect  to  industrial  and  provident  societies,  see  39  and  40 
Yict.,  c.  45. 


SECTION   VI. — OF   CO-OWNEESHIP. 


Co-oicners  not  copartners. — No  partnership  necessarily  subsists 
amongst  persons  to  whom  property  descends,  or  is  given  jointly  or  in 
common  ;  and  even  if  several  persons  agree  to  buy  property,  to  hold 
jointly  or  in  common,  although  by  the  purchase  they  become 
co-owners,  (n)  they  do  not  become  partners  unless  that  also  was  their 
intention,  (o)  35 


(m)  See  Strong  v.  Harvey,  3  Bing.  304  ; 
Redwav  v.  Sweeting,  L.  R.,  2  Ex.  400  ; 
Gray  v.  Pearson,  L.  R.,  5  C.  P.  568 ;  An- 
drewo  &  Alexander's  Case,  8  Eq.  176; 
and,  as  to  suits  between  tlie  members  of 
such  societies,  Bromley  v.  Williams,  32 
Beav.  177 ;  Harvey  v.  Beckwith,  4  N.  R. 
90,  298 ;  and  12  W.  R.  819,  896. 

{n)  As  to  whether  joint  purchasers  be- 
come tenants  in  common,  or  joint  tenants, 
see  Lake  v.  Gibson,  1  Eq.  Cas.  Ab.  290; 
Aveling  v.  Knipe,  19  Ves.  441  ;  Crossfield 
V.  Such,  8  Ex.  825  ;  Harris  v.  Fergusson, 
16  Sim.  308  ;  Robinson  v  Preston,  4  K.  & 
J.  505;  Bone  v.  Pollard,  24  Beav.  283; 
Harrison  v.  Barton,  1  J.  &  H.  287,  in 
which  the  admissibility  of  parol  evidence 
on  the  point  was  ranch  discussed.  In 
French  v  Styrlng,  2  C.  B.  (X.  S.)  357, 
ante  p.  *18,  the  race-horse  was  clearly  held 
in  common,  the  owners  having  become 
such  at  different  times  and  by  different 
titles. 

(oj  See  Kay  v.  Johnston,  21  Beav.  536. 
Whether  they  intended  to  become  partners 
or  not  may  of  course  be  doubtful,  as  in 


Sharpe  v.  Cummings,  2  Dowl.  &  L.  504,. 
where  two  persons  hired  a  field  wherein 
to  graze  their  cattle.  This  subject  will  be 
adverted  to  hereafter  when  treating  of 
partnership  property.  Pothier  has  an 
appendix  on  the  subject  at  the  end  of  hi& 
essay  on  partnership;  but  the  appendix 
is  omitted  from  Mr.  Tudor's  translation 
of  that  essay.  See  further  on  this  subject 
the  last  chapter  in  Story  on  Partnership. 

35.  Co-owners  not  partners. — The 
joint  purchase  of  land  by  two  or  more 
persons  does  not  make  them  partners,  in 
the  absence  of  an  agreement  to  that  effect, 
where  such  purchase  is  made  for  invest- 
ment merely,  each  party  paying  his  own- 
proportion  of  the  price.  Chisholm  v. 
Cowles,  42  Ala.  179.  And  the  facts  that  a 
building  is  put  up  on  the  land  so  pur- 
chased, by  one  of  the  joint  owners,  with  the 
consent  of  the  owner  (Sikes  v.  Work,  & 
Gray  (Mass.)  433), or  that  tiie  joint  owners 
build  a  mill  and  subscribe  articles,  framed 
for  the  pur[)ose  of  regulating  their  common 
action  in  regard  to  the  common  property 
and  the  prosecution  of  the  work  (Pills- 


68 


CHAP.  I.,  §  VI.]  CO-OWXEKS.  52* 

■^  Co-owner shij)    and    copartner shij-)    compared. — Speaking 
"^  -■    generally,  and  excluding  all  exceptional  oases,  the  principal 
differences  between  co-ownership  and   partnership  may  be  stated  as 
follows : 

1.  Co-ownership  is  not  necessarily  the  result  of  agreement.  Part- 
nership is.  36 

2.  Co-ownership  does  not  necessarily  involve  community  of  profit 
or  of  loss.     Partnership  does.  37 

3.  One  co-owner  can,  without  the  consent  of  the  others,  transfer  his 
interest  to  a  stranger  so  as  to  put  him  in  the  same  position  as  regards 
the  other  owners  as  the  transferrer  himself  was  before  the  transfer. 
A  partner  cannot  do  this.  38 

4.  One  co-owner  is  not,  as  such,  the  agent,  real  or  implied,  of  the 
others.     A  partner  is.  39 

5.  One  co-owner  has  no  lien  on  the  thing  owned  in  common  for 
outlays  or  expenses,  nor  for  what  may  be  due  from  the  others  as  their 
share  of  a  common  debt.     A  partner  has. 

6.  One  co-owner  of  land  is  entitled  to  have  it  divided  between  him- 
self and  co-ow^ners,  but  not  (except  by  virtue  of  a  recent  statute)  to 

bury  I'.  Pillsbury,  20  N.  H.  90),  or  that  38.  Where  one  of  the  partners  in  a  firm 

one  joint  owner  is  to  receive  a  fixed  com-  formed   for  the  purpose  of   buying   and 

pensation  per  annum  for  his  interest  (Mc-  selling   lands  on    speculation,   after   the 

Ilvaine  v.  Armfield,  5  La.  Ann.  302),  will  concern    has    ceased    active    operations, 

not  sufiice  to  create  the  partnership  rela-  transfers    to    an    outsider    one-half    of 

tion  between  the  co-owners,  in  the  absence  the  net  profits  of  his  share  in  the  firm  ; 

of  an  agreement  to  that  effect.  the  residue  of  his  interest,  together  with 

36.  Partnership  and  community  are  not  the  entire  control  and  direction  of  his 
to  be  confounded.  The  first  is  based  on  share,  having  been  previously  assigned  to 
the  contract  of  the  parties,  which  thus  one  of  his  copartners,  in  consideration  of 
creates  the  community  ;  the  last  may  moneys  advanced  to  him  on  account  of 
exist  independently  of  any  contract  what-  it — this  creates  between  the  two  assignees, 
soever.  Pickerell  v.  Fisk,  11  La.  Ann.  not  a  partnership,  but  a  tenancy  in  com- 
277.  mon  in  the  share  of  their  assignor ;  nor 

37.  Where  two  bind  themselves,  the  does  it  constitute  the  second  assignee  a 
one  to  contribute  land  and  stock  for  its  partner  in  the  firm.  Cowles  v.  Garrett,  30 
cultivation,  and  the  other  personal  skill,  Ala.  341. 

labor,  and  other  stock,  each  to  furnish  a  39.   The    purchase    of    land    by    two, 

specified  portion  of  the  food  for  the  ani-  jointly,  does  not  give  the  one  power  to 

mals,  to  pay  equally  the  expenses  of  the  endorse  for  both,  nor  to   accept  a  draft  of 

plantation,    and    to    divide    equally   the  the  vendor  in  payment  of  the  purchase 

crops,  they  are  partners,  and  not  tenants  money  of  the  land.     Schaeffer  v.  Fowler, 

in  common.     Autrey  v.  Frieze,  59  Ala.  Ill  Pa.  St.  451. 
587. 

69 


52*  CO-OWNERS.  [book  I.,, 

have  it  sold  against  their  consent.  A  i»artner  has  no  right  to  partition 
in  specie,  but  is  entitled  on  a  dissolution  to  have  the  i)artnership  prop- 
erty, whether  land  or  not,  sold,  and  the  proceeds  divided.  40 

7.  As  between  the  real  and  personal'  representatives  of  a  deceased 
co-owner  of  freehold  land,  the  equitable  as  well  as  the  legal  interest  in 
his  share  is  real  estate;  whilst,  as  between  the  real  and  personal  repre- 
sentatives of  a  deceased  partner,  the  equitable  interest  in  his  share  of 
partnership  freehold  property  is  treated  as  personal  estate,  although  the 
legal  interest  in  it  is  real  estate. 

8.  Co-ownership  not  necessarily  existing  for  the  sake  of  gain,  and 
partnership  existing  for  no  other  purpose,  the  remedies,  by  way  of 
account  and  otherwise,  which  one  co-owner  *has  against  the      ^_^ 
others  are  in  many  important  i-espects  different  from  and  less 
extensive  than  those  which  one  partner  has  against  his  copartners,  {p} 

Co-oioners  sharing  profits. — When,  however,  co-owners  of  property 
employ  it  with  a  view  to  profit,  and  divide  the  profit  obtained  by  its 
employment,  the  difference,  if  any,  between  them  and  partners  becomes 
very  obscure.  The  point  to  be  determined  is  whether  from  all  the 
circumstances  of  the  case  an  agreement  for  a  partnership  ought  to  be 
inferred;  but  this  is  often  an  extremely  difficult  question. 

If  each  owner  does  nothing  more  than  take  his  share  of  the  gross 
returns  obtained  by  the  use  of  the  common  property,  partnership  is 
not  the  result.  On  the  other  hand,  if  the  owners  convert  those  returns 
into  money,  bring  that  money  into  a  common  stock,  defray  out  of  it 
the  expenses  of  obtaining  the  returns,  and  then  divide  the  net  profits, 
partnership  is  created  in  the  profits,  if  not  also  in  the  property  which 
yields  them.  Many  perplexing  cases  may  be  imagined  intermediate 
between  those  here  put  as  examples,  but  the  following  illustrations 
will,  it  is  hoped,  enable  the  reader  to  appreciate  the  distinction  in> 
question.  41 

40.  Although  a  purchase  be  on  separate  of  a  paper-mill,  for  the  more  convenient 
and  not  on  joint  account,  yet  if  the  inter-  management  of  their  business,  agreed 
ests  of  the  purchasers  are  afterwards  that  one  of  them  should  be  sole  manager, 
mingled  with  a  view  to  a  joint  sale,  a  part-  foreman  and  bookkeeper,  another  should 
nership  exists  from  the  time  that  the  perform  general  labor  in  the  mill,  another 
shares  are  so  brought  together.  Rogers  v.  should  be  engineer,  and  the  fourth  should 
Nichols,  20  Tex.  719.  "collect  slock  and  market  the  paper,"  at 

ip)  See  m/V«.  as  to  this.  fixed  compensations  to  each.     This  was- 

41.  In  Doak  v.  Swan  (8  Greenl.  (Me.)  held  to  constitute  a  partnership  between 
170),  four  of  the  five  tenants  in  common    those  who  signed  the  agreement  in  the- 

70 


CHAP.  I.,  §  VI.]  CO-OWXERS.  53* 

Joint  purchasers  of  goods  for  resale. — If  several  persons  jointly 
purchase  goods  for  resale  with  a  view  to  divide  profits  arising  from  the 
tran.saction,  a  partnership  is  thereby  created,  (g)  But  persons  who  join 
in  the  purchase  of  goods,  not  for  the  purpose  of  selling  them  again 
and  dividing  the  profits,  but  for  the  purpose  of  dividing  the  goods 
themselves,  are  not  partners,  and  are  not  liable  to  third  parties  as  if 
they  were.  Coope  v.  Eyre  (/■)  is  a  leading  case  in  support  of  this 
proposition.  There,  an  agreement  was  come  to  that  one  person  should 
purchase  oil  and  then  divide  it  amongst  himself  and  others,  they  pay- 
ing him  their  proportion  of  the  price.  The  oil  was  bought  accord- 
ingly, and  the  purchaser  becoming  bankrupt,  the  seller  sought  to  make 
the  other  parties  to  the  agreement  pay  for  the  oil.  But  it  was  held 
that  the  purchaser  purchased  as  a  principal  and  not  as  an  agent,  and 
that  as  there  was  no  community  of  profit  or  loss,  the  persons  amongst 
whom  the  oil  was  to  be  divided  could  not  be  *made  liable  as 
-^  partners  or  quasi  partners.  In  Hoare  v.  Dawes  (s)  there  was 
a  similar  agreement,  and  Lord  Mansfield  thought  at  first  that  there 
was  a  quasi  partnership,  but  he  and  Willes,  Ashhurst  and  BuUer,  JJ., 
ultimatelv  decided  that  there  was  not,  there  being  no  agreement  to 
share  profit  or  loss,  and  there  being  no  pretence  for  holding  the  pur- 
chasers liable  for  the  acts  of  each  other  by  reason  of  their  holding 
themselves  out  as  partners. 

So,  in  Gibson  v.  Lupton,  (t)  two  persons  joined  in  the  purchase  of 
some  wheat,  with  the  intention  of  dividing  and  paying  for  it  equally, 
and  it  was  held  that  as  there  was  no  joint  interest  in  profit  or  loss, 
they  could  not  be  considered  partners,  either  as  between  themselves  or 
as  regarded  third  parties.  42 

business  of  making   and    selling  paper;  separate  and  different   instructions,  each 

and  a  promissory  note  given  for  stock,  in  for  his  own  share,  their  interests  are  sev- 

the  name  of  the  company,  by  the  party  ered ;  and  each  may  maintain  an  action 

appointed  to  the  charge  of  that  depart-  in  his  own  name    against  the  consignee 

ment,  was  held  binding  on  all  the  parties  for  a  violation  of  his  instructions.     Hall 

to  the  agreement.  v.  Leigh,  8  Cranch  (U.  S.)  50. 

(g)  Reid  v.  Hollinshead,  4  B.  &  C.  867.  In  Goell  v.  Morse  (126  Mass.  480),  two 

(r)  1  H.  Bl.  37,  persons  bought  a  horse,  each  paying  half 

(s)  1  Doug.  371.  the  price,  under  an  agreement  that  when 

(t)  9  Bing.  297.  either  should  have  possession  of  the  horse 

42.  Joint  purchasers  of  goods  for  re-  he  should  provide  for  his  keeping  without 

sale. — Where  two  joint  owners  of  mer-  cost  to  the  other,  and  that  each  should  try 

chandise  consign  it  for  sale,  informing  the  to  sell  the  horse  and  endeavor  to  procure 

consignee  that  each  owns  a  moiety,  giving  a  purchaser  at  a  profit  over  his  cost,  but 

71 


54*  CO-OWNERS.  [book  I., 

Part  owners  sharing  the  produce  of  their  property. — Moreover,  part 
owners  who  divide  what  is  obtained  by  the  use  or  employment  of  the 
thing  owned  are  not  thereby  constituted  partners.  For  example,  if 
two  tenants  in  common  of  a  house  let  it  and  divide  the  rent  equally 
amongst  them,  they  are  not  partners,  although  they  may  pay  for 
repairs  out  of  the  rent,  before  dividing  it.  (u)  So,  two  persons  who 
are  tenants  in  common  of  a  race-horse,  and  share  his  winnings  on  the 
one  hand  and  the  expenses  of  his  keep  on  the  other,  are  not  partners, 
but  co-owners  only,  (x)  So,  part  owners  of  ships  are  not  usually  part- 
ners, (2/)  although  they  may  be  partners  as  well  as  part  owners,  as  was 
the  case  in  Campbell  v.  Mullett.  (2)  43 

Co-owners  of  mines. — So,  again,  with  respect  to  mines  and  quarries. 
Tenants  in  common  or  joint  tenants  of  a  mine  or  quarry  may  or  may 
not  be  partners,  and  the  mine  or  quarry  itself  may  or  may  not  be  part 
of  a  common  stock.     But  it  is  highly  inconvenient,  if  not  altogether 

that  neither  should  sell  without  the  con-  chine  to  be  used  in  common,  in  payment 

currence  of  the  other.     It  was  held  that  for  which   they  give  to  the  seil'er   their 

they  were  tenants  in  common  of  the  horse,  joint  note,  renders  them  joint  owners,  not 

and  not  partners.  partners.     Ilifft.  Brazil!,  27  Iowa  131. 

(w)  See  per  Willes,  J.,  in  the  case  cited  Joint  owners  of  ships. — It  is  well  set- 
in   the    next    note.     See,   also,   Lyon   v.  tied  that,  joint  ownership  of  a  vessel  or 
Knowles,  3  B.  &  Sm.  556,  where  the  gross  cargo,    in    distinct    proportions,  -without 
receipts  of  a  theatre  were  divided ;  and  any  agreement  to  share  in  the  profit  or 
London  Financial  Assoc,  v.  Kelk,  26  Ch.  loss  which  may  ultimately  arise,  will  not 
D.  107.  make  the   co-owners    copartners    in    the 
(x)  French  v.  Styring,  2  C.  B.  (N.  S.)  property  or  voyage,  but  tenants  in  com- 
357;  qucere,   whether    there  was   in    this  mon.     Thorndike   v.   De  Wolf,    6    Pick. 
case    a    partnership    in    the  profits?     It  (Mass.)  120;  Merrill  ?;.  Bartlett,  Id.  46; 
would  seem  not ;  the  agreement  being  to  French  v.  Price,  24  Id.    13;  Phillips  v. 
divide  the  winnings  as  gross  returns.    See  Purington,  15  Me.  425;    Ward  v.  Bode- 
ante  p.  *18.  man,  1  Mo.  App.  272 ;   Holmes  v.  United 
(y)  Helme  v.  Smith,  7  Bing.  709  ;   Ex  States  Ins.  Co.,  2  Johns.  (N.  Y.)  Cas.  329; 
parte  Young,  2  Ves.  &  B.  242  ;  Ex  parte  Hopkins  v.  Forsythe,  14  Pa.  St.  34  ;  Jack- 
Harrison,  2  Rose  76;  Green  v.  Briggs,  6  son  v.  Robinson,  3  Mason  (U.  S.)  138. 
Hare  395.  Thus,  the  owners  of  whale  ships,  in  the 
(z)  2  Swanst.  551.     See  Id.,  p.  575.  absence  of  special  agreements  to  that  effect, 
43.  Sharing  proceeds  or  earnings  of  are  not  partners,  but  tenants  in  common ; 
joint  property. — A  joint   interest   in   a  the  other  owners  are  not  liable  to  contrib- 
patent  does  not  confer  upon  the  parties  ute  according  to  their  shares  to  one  of 
the  character  of  partners.     Parkhurst  v.  their  number  who  has  been  obliged  to  pay 
Kinsman,  1  Blatchf.  (U.  S.)  488 ;  Pitts  v.  more  tlian  his  share  in  fitting  out  the  ves- 
Hall,3Id.  201;  Hermannsv.Duvigneaud,  sel.     Macy  1;.  De  Wolf,  3    Woodb.  &   M. 
10  La.  Ann.  114.     So,  also,  the  joint  pur-  (U.  S.)  193. 
chase,  by  two  persons,  of  a  threshing  ma-  As  to  what  acts  of  part  owners  of  a  ves- 

72 


CHAP.  I.,  §  VI.]  CO-OWNERS.  55* 

im]30ssible,  for  co-owners  of  a  mine  or  quarry  to  work  it  themselves 
without  becoming  partners,  at  least  in   the   *profits   of  the    p^-^, 
mine;  and  persons  who  work  a  mine  or  quarry  in  common    '- 
are  regarded  rather  as  partners  in  trade  than  as  mere  tenants  in  com- 
mon of  land,  (a)  44 

Three  cases  have  here  to  be  considered : 

1.  Co-owners  partners  in  profits  and  in  mine. — The  co-owners  may 
be  partners,  not  only  in  the  profits,  but  also  in  the  mine  itself  The 
co-owners  are  then  partners  to  all  intents  and  purposes,  and  their 
mutual  rights  and  obligations  are  determined  by  the  law  of  partner- 
ship as  distinguished  from  the  law  of  co-ownership.  (6) 

2.  Co-owners  not  ptartners  at  all. — The  co-owners  may  not  be  part- 
ners at  all,  neither  in  the  profits  nor  in  the  mine.  Their  mutual  rights 
and  obligations  are  then  determined  by  the  law  of  co-ownership  as 
distinguished  from  the  law  of  partnership.  In  this  case  each  owner 
is  entitled  to  an  account  of  what  the  others  have  got  from  the  mine 
more  than  their  share ;  (c)  and  to  transfer  his  share  in  the  mine  with- 
out the  consent  of  the  other  owners  ;  [d)  and  to  have  a  partition  made 
of  the  mine  between  him  and  them.  But  the  writer  conceives  that  in 
the  case  now  supposed  no  owner  is  entitled  to  have  the  mine  sold 
against  the  consent  of  the  others,  (e)  Whether,  if  the  co-owners  can- 
not agree  as  to  the  mode  of  working  the  mine,  an  action  will  lie  for 

sel  will  render  them  liable  to  be  sued  as  the  same.     Bybee   v.  Hawkett,    12   Fed. 

partners,  see  Bacon  v.  Cannon,  2  Houst.  Rep.  649;  S.  C,  15  Cent.   L.  J.  105;    8 

(Del.)  47.  Sawy.  (U.  S.)  176. 

(a)   See  Jefferys  v.  Smith,  1  Jac.  &  W.  (6)   There  is  no   authority  for   saying 

298 ;  Crawshay  v.  Maule,  1  Swanst.  495 ;  that  in  this  case  one  of  the  partners  can, 

Fereday  v.  Wightwick,  1  R.  &  M.  45.  in  the  absence  of  a  special  agreement  or 

44.  Co-owners  of  mines. — Where  custom,  assign  his  share  without  the  con- 
three  persons  agreed  to  operate  together  sent  of  the  other  partners.  That  in  this 
a  "mining  property  as  a  company,"  this  case  the  right  is  to  a  sale,  and  not  to  a 
creates  a  partnership  between  them  from  partition  of  the  mine,  see  Wild  v.  Milne, 
the  date  of  the  agreement,  and  makes  26  Beav.  504;  Crawshay  v.  Maule,  1 
each  of  the  three  liable  for  debts  con-  Swanst.  495;  Lees  v.  Jones,  3  Jur.  (N.  S.) 
traded  in   the  prosecution  of  the  enter-  954. 

prise,    notwithstanding   a   further   provi-  (c)  Denys  v.  Schuckburgh,  4  Y.  &  C. 

sion  in  their  agreement  that  there  shall  Ex.  42. 

be  no  division  of  profits  until  two  of  the  {d)  Bentley  v.  Bates,  4  Y.  &  C.  Ex.  182. 

three  are  reimbursed,  out  of  the  profits,  (e)  /.  e.,  except  under  the  act  31  and  32 

for  money  expended  by  them  in  the  pur-  Vict ,  c.  40,  enabling  a  sale  to  be  made  in 

chase  of  their  shares  of  the  property  from  lieu  of  partition.     See  Steward  v.  Blake- 

the  other  one,  and  the  cost  of  improving  way,  4  Ch.  603,  and  6  Eq.  479. 

73 


5o*-56*  CO-OWN i:rs  of  mines.  [book  i., 

the  appointment  of  a  receiver  and  manager,  is  not  settled.  Lord  Eldon,. 
in  Jeifcrys  v.  Smith,  (/)  is  generally  understood  to  have  intimated  that 
it  will ;  but  the  case  before  him  was  not  of  the  description  now  under 
discussion,  being  one  in  which  the  mines  were  worked  in  partnership  j 
and  in  a  recent  and  care  *fully  considered  case  the  contrary 
'^  -J    rule  was  treated  as  more  correct,  [g) 

3.  Co-owners  i^arlners  in  profits  only. — The  co-owners  of  a  mine 
mav  work  it  together,  bring  the  produce  into  a  common  fund,  and  be 
partners  in  the  profits  of  the  mine,  but  not  in  the  mine  itself  In 
this  case  the  nuitual  rights  and  obligations  of  the  owners  are  deter- 
mined partly  by  the  law  of  partnership  and  partly  by  the  law  of  co- 
ownership,  and  some  curious  anomalies  are  the  consequence.  The 
most  important  of  these  are  as  follows  : 

1.  Each  co-owner  may  transfer  his  interest  in  the  mine  and  in  the 
partnership  working  it  without  the  consent  of  the  other  owners,  (li) 

2.  Each  co-owner  is  entitled  to  maintain  an  action  for  an  account 
against  the  others  without  seeking  for  a  dissolution  of  the  partnership,  [i) 

3.  Upon  a  dissolution  of  the  partnership,  the  mine  itself,  not  beiijg 
partnership  property,  must  be  divided  between  its  several  owners  and 
not  be  sold,  [k)  unless  under  the  statute  enabling  sales  to  be  made  in 
lieu  of  partition,  [l) 

4.  As  between  the  real  and  personal  representatives  of  a  deceased 
partner,  his  share  of  the  mine  will  be  real,  and  not  personal  estate,  (m) 

5.  With  a  view  to  a  dissolution,  the  court  will,  if  necessary,  appoint 
a  receiver  and  manager  to  carry  on  the  mine  for  the  benefit  of  all 
parties  interested,  {n) 

if)   1  Jac.  &  W.302.  Wynget  r.  Heath-  and   6  Eq.  479.     A  sale  was  decreed   in 

cote,  cited  in  4  Y.  &  C.  Ex.  187,  supports  the  cases  referred  to,  ante  note  (h),  but  in 

the  same  view,  but  the  circumstances  of  them  the  mine  was  a  partnership  asset, 

the  case  are  not  sufficiently  known.  Consider  the  analogous  case  of  a  ship. 

(g)    Koberts   v.   Eberhardt,    Kay   148.  {D  31  and  32  Vict.,  c.  40. 

Where  the  mine  lias  been  worked  in  part-  (m)  Steward  v.  Blakeway,  ubi  sup. 

nership,  and  the  partnership  has  been  dis-  (n)  Roberts   v.    Eberhardt,    Kay    148  ; 

solved,  and  the  mine  ordered  to  be  sold.  Lees  v.  Jones,  3  Jur.  (N.  S.)  954  ;  Jefferys 

an  interim  receiver  and  manager  will,  if  v.  Smith,  1  Jac.  &  W.  302 ;  Rowe  v.  Wood, 

necessary,  be  appointed,  Lees  v.  Jones,  3  2  [d.  553 ;  Wynget  v.  Heathcote,  cited  4 

Jur.  (N.  S.)  954.  Y.  &  C.  Ex.  187.      Wliether    a    receiver 

(h)  Betitley  v.  Bates,  4  Y.  &C.  Ex.  182  ;  and  manager  will  be  appointed  if  no  dis- 

Crawshay  v.  Maule,  1  Swanst.  517-519.  solution  is   sought,  see  the  judgment  in 

(i)  Bentley  v.  Bates,  4  Y.  &  C.  Ex.  182.  Roberts  v.  Eberhardt. 

{k)  Steward    v.  Blakeway,   4    Ch.  603, 

74 


CHAP.  I.,  §  VI.]  CO-OWXERS    OF    MIXES.  57* 

6.  The  obligation  of  each  co-owner  to  account  to  the  *others  r.^-- 
is  the  same  as  that  of  one  partner  to  account  to  his  copartners,  ■- 
and  much  more  extensive,  therefore,  than  the  obligation  which  exists  in 
a  case  of  mere  co-ownership.  The  lien  which  each  partner  has  on 
the  shares  of  his  copartners  for  what  is  clue  from  thera  to  tlie  partner- 
ship extends  to  cases  of  this  third  class,  (o)  as  does  also  the  obligation 
which  one  partner  is  under  to  account  to  his  copartners  for  benefits  he 
may  have  received  in  respect  of  the  common  property.  It  has  been 
decided  that  where  two  tenants  in  common  of  a  mine  construct  a  shaft 
at  their  own  expense  in  land  belonging  to  one  of  them  exclusively, 
money  paid  by  a  stranger  for  the  use  of  that  sha'ft  belongs  to  both 
tenants,  and  not  exclusively  to  him  iu  whose  land  the  shaft  is  con- 
structed, ip) 


Note  on  the  remedies  available  by  one  co-owner  against  the  others. 

In  order  still  further  to  understand  the  difierences  between  co-ownership  and  co- 
partnership, it  is  necessary  to  compare  the  rights  and  remedies  of  co-owners  against 
each  other  with  the  corresponding  rights  and  remedies  of  partners.  The  rights  and 
remedies  of  partners  inter  se  will  be  fully  investigated  hereafter;  but  as  there  is  no 
compendious  summary  of  the  rights  and  remedies  of  co-owners  inter  se,  the  following 
note  is  here  appended. 

The  obligation  of  a  partner  to  account  with  iiis  copartner  arises  ex  contracba,  and 
this  obligation  is  not  confined  to  the  partners  themselves,  but  devolves,  with  its  cor- 
relative right,  upon  their  respective  representatives.  The  obligation  of  one  co-owner 
to  account  with  the  other  for  the  profits  which  may  have  arisen  from  the  common 
property  cannot  be  based  upon  contract  where  no  contract  has  been  entered  into ; 
but  it  by  no  means  follows  that  because  there  is  no  contract,  express  or  tacit,  to  share 
profits,  eacli  co-owner  ought  to  be  entitled  to  get  what  he  can  and  to  keep  what  he 
may  get.  This  was  seen  plainly  enough  by  the  Koman  lawyers,  who  properly  held  an 
obligation  to  arise  quasi  ex  contractu,  and  who  found  no  difficulty  in  declaring  that 
every  co-owner  ought  to  account  to  the  others  for  the  profits  received  by  himself,  and 
to  contribute  with  them  to  the  expenses  properly  incurred  for  the  common  benefit,  {q) 
Our  ancestors,  however,  seem  to  have  taken  a  different  view  of  the  matter. 

*By  the  strict  rule  of  the  common  law,  one  co-owner  of  land  was  entitled  to> 

-I  no  account  from  another  unless  the  former  had  made  the  latter  his  bailiff,  or  had 

been  actually  ousted  from  the  land ;  (;•)  and  one  co-owner  of  a  chattel  had  no  remedy 

(o)  Fereday  v.  Wightwick,  1  R.  &  M.  45 ;  [q]  See  Inst.,  lib.  3,  tit.  27,  U  3-5  ;  and 
Eoberts  v.  Eberhardt,  Kay  148  ;  Crawshay  Dig  ,  lib.  X.,  tit.  2,  1.  25,  ?  16,  and  tit.  3,  1. 
V.  Maule,  1  Swanst.  495.  4,  I  3,  and  lib.  XVII.,  tit.  2,  1.  34. 

(p)  Clegg  V.  Clegg,  3  Giff.  322.  (r)  See  Co.  Lit.  200. 

75 


58*  REMEDIES   OF   CO-OWNERS    INTER   SE.  [bOOK    I., 

against  another,  unless  he  had  destroyed  the  common  property,  (s)  The  statute 
4  Anne,  c.  16,  §  27,  has  phiced  co-owners  of  land  in  a  somewhat  better  position  than 
they  were  in  before,  by  enacting  that  an  action  of  account  may  be  maintained  by 
one  co-owner  against  another  for  receiving  more  than  his  share ;  but  nothing  has 
been  done  to  improve  the  law  as  to  co-owners  of  chattels  except  by  the  introduction, 
by  equity  judges,  of  rules  founded  on  the  principles  of  the  Roman  law. 

The  inadequacy  of  the  remedies  available  by  oue  co-owner  against  another  at 
common  law  is  justified  by  early  writers  upon  the  ground  that  each  tenant  in  common 
has  it  in  his  own  power  to  enter  on  the  common  property,  if  it  be  land,  and  to  get 
possession  of  the  common  property,  and  retain  it,  if  it  be  an  ordinary  chattel;  and, 
according  to  the  writers  in  question,  it  is  only  when  one  co-owner  prevents  the  other 
from  entering  in  the  first  case,  and,  by  destroying  the  chattel,  from  getting  possession 
of  it  in  the  other,  that  there  is  any  necessity  for  having  recourse  to  an  action,  {t) 
The  unsatisfactory  nature  of  this  reasoning  is  too  apparent  to  require  comment ;  for, 
admitting  its  force  in  the  case  of  land,  it  is  plainly  in  the  highest  degree  unjust  to 
allow  one  co-owner  of  a  valuable  chattel  to  keep  it  exclusively  in  his  own  possession, 
and  to  tell  the  other  that  his  only  remedy  is  to  take  it  peaceably  when  he  sees  his 
time,  and,  having  got  it,  to  be  careful  not  to  part  with  it.  Unsatisfactory,  however,  as 
the  reasoning  is,  it  affords  the  only  explanation  of  the  actual  state  of  the  law  upon 
the  subject  under  consideration. 

In  order  to  understand  accurately  the  remedies,  which  by  the  law  of  this  country 
are  available  for  one  co-owner  against  another,  it  is  necessary,  in  the  first  place,  to 
distinguish  land  from  chattels. 

1.    With  respect  to  land. 

1.  Co-owners  of  land. — If  land  is  owned  by  several  persons,  jointly  or  in  common, 
each  is  entitled  to  enter  upon  and  occupy  it.  (m) 

2.  If  any  one  of  them  is  actually  excluded  by  the  others,  he  can  bring  an  action 
for  the  recovery  of  his  undivided  share ;  {x)  and,  having  recovered,  he  can  sue  for 
mesne  profits;  (2/)  and,  in  an  action  for  them,  the  jury  are  not  bound  to  confine  the 
damages  to  the  value  of  the  actual  profits  made  by  the  defendant,  (z)  In  cases  of 
actual  exclusion  or  destruction,  an  action  for  *danjages  will  also  lie  by  one 
co-owner  against  the  other;  (a)  and  now  an  injunction  and  a  receiver  can  be  ^ 
obtained,  even  although  there  is  no  actual  exclusion.  (6) 

3.  Subject  to  the  provisions  of  the  act  of  31  and  32  Vict.,  c.  40,  one  co-owner  of  land 
is  entitled  to  have  it  divided  between  himself  and  the  other  owners,  although  they 
may  not  desire  a  partition,  (c) 

(8)  lb.  (z)  lb. 

(0  See  Lit.,  ?  323.  (a)  Cresswell  v.  Hedges,  1  H.  &  C.  421, 

(w)  Lit.,  I  323.     One  is  not  entitled  to  where   the   defendant   paid    money   into 

a  receiver  as  against  the  others  if  they  do  court   in    respect    of  the  damage  to   the 

not  exclude  him.    Sandford  v.  Ballard,  30  plaintiff's  share. 

Beav.  109.     See  infra,  note  (6).  [b)  See  Jud.  Act,  1873,  §  25,  cl.  8.    Por- 

(x)  Lit.,  II  322,  323,  and  Coke's  com-  ter  v.  Lopes,  7  Ch.  D.  358  ;   Sandford  v. 

ments  upon  them.     As  to  evidence  of  ac-  Ballard,  33  Beav.  401. 

tual  exclusion,  see  Doe  i>.  Prosser,  Cowp.  (c)  See  Bac.  Ab.,  "Joint  Tenants,"  I,  7, 

217  ;  Jacobs  v.  Seward,  L.  R,  5  H.  L.  464.  and  Agar  v.  Fairfax,  17  Ves.  533,  and  the 

(y)  Goodlitle  v.  Tombs,  3  Wils.  118.  notes  to  it  in  2  White  &  T.  Lead.  Gas. 

76 


CHAP.  I.,  §  VI.]  CO-OWXERS    OF    MIXES.  59* 

4.  If  one  co-owner  makes  the  other  his  bailiff  or  receiver,  the  latter  can  be  com- 
pelled to  account,  not  only  for  what  he  has  received,  but  also  for  what  he  might  have 
received  without  his  own  willful  default.  ((/) 

5.  And  by  the  statute  of  Anne  (-4  Anne,  c.  19,  §  27),  one  co-owner  who  receives 
more  than  his  share  can  be  made  to  account  to  the  other  owners  for  what  he  has 
received  more  than  he  ought,  (e) 

6.  Bat  it  has  been  decided,  since  the  passing  of  this  statute,  that  one  co-owner 
of  land,  who  merely  occupies  the  whole,  is  not  liable  to  pay  any  rent  to  the  other 
owners.  (/) 

7.  And  it  has  also  been  decided  that  if  one  co-owner  not  only  occupies  the  whole 
land,  but  expends  his  own  industry  and  capital  upon  it,  and  thereby  realizes  profit 
(e.  g.  by  farming),  he  is  not  liable  to  account  to  his  co-owners  for  any  share  of  such 
profit,  {g) 

8.  But  if  one  co-owner  of  land  derives  gain,  not  from  the  mere  use  of  the  land  by 
himself,  but  by  being  paid  for  the  use  thereof  by  others,  he  must  account  to  the  other 
owners  for  what  he  receives  beyond  his  own  share,  {h) 

9.  A  fortiori,  if  one  co-owner  of  land  derives  gain  by  wasting  the  common  prop- 
erty, he  is  liable  to  account  to  the  other  owners  for  their  shares  of  the  money  so 
obtained,  (i)     He  can  also  be  restrained  by  a  co-tenant  from  committing  destructive 

waste,  {k)  but  not  from  cutting  timber  in  a  *proper  and  judicious  manner ; 
-'  nor,  it  is  conceived,  from  mining  in  a  similar  way.  (/) 

10.  If  one  of  several  joint  tenants  or  tenants  in  common  of  a  house  lays  out 
money  in  necessary  repairs,  his  outlays  will  be  taken  into  account  upon  a  partition 
or  sale ;  (m)  but  he  cannot  enforce  contribution  by  an  action  for  damages ;  (n)  nor 
has  he  any  lien  on  the  house  or  on  the  interest  of  his  cotenants  therein  for  their 
shares  of  the  expense,  (o)  ** 

{d)  Co.  Lit.  200  b,  and  172  a.  (i)  Co.  Lit.  200  b;  Martyn  v.  Knowllys, 

(e)  The  remedy  at  law  was  by  an  action  8  T.  R.  145.  See  the  last  sentence  in  the 
of  account  and  not  by  an  action  for  money  judgment.  See,  as  to  injunctions  to  re- 
had  and  received.  Thomas  v.  Thomas,  5  strain  waste,  Twort  v.  Twort,  16  Ves.  128. 
Ex.  28;  Jacobs  v.  Seward,  L.  R.,  5  H.  L.  (k)  Arthur  v.  Lamb,  2  Dr.  &  Sm.  428; 
464.  Wilkinson  v.  Haygarth,  12  Q.  B.  837. 

(/)  Teasdale  v.   Sanderson,   33   Beav.  (I)  Arthur  v.  Lamb,  2  Dr.  &  Sm.  428 ; 

534 ;    Wheeler    v.   Home,    Willes    208  ;  Wilkinson  v.  Haygarth,  12  Q.  B.  837. 

M'Mahon  v.  Burchell,   2  Ph.  127.     But  {m)  See  Leigh  v.  Dickeson,  15  Q.  B.  D. 

see  Drury  v.  Drury,  1  Ch.  49.     In  Tur-  60. 

ner   v.   Morgan,    8  Ves.   145,  there   was  (n)  lb.,  where  the  passages  in  Co.  Lit. 

exclusion.     Where  one  of  the  co-owners  200  a,  and  F.  N.  B.  162,  and  the  old  writ 

is  an  infant,  see  Pascoe  v.  Swan,  27  Beav.  of  contributiou;  are  explained. 

508.  (o)  Re  Leslie,  23  Ch.  D.  552.     See,  also, 

(g)  Henderson  v.  Eason,  17  Q.  B.  701,  Kay  v.  Johnston.  21  Beav.  536;  Teasdale 

and  2  Ph.  308 ;  Jacobs  v.  Seward,  L.  R.,  v.  Sanderson,  33  Beav.  534. 

5  H.  L.  464.  45.  In  an  action  by  one  of  two  tenants 

(h)  Henderson  v.  Eason,  17  Q.  B.  701.  in  common  of  land,  against  the  other,  to 

See,  too,  Clegg  v.  Clegg,  3  Giff.  322,  ante  recover  one-half  the  plaintiff's  outlay  for 

p.  *57,  note  (p)  ;  Carter  v.  Home,  1  Eq.  taxes  and  improvements  made  during  the 

Cas.  Ab.  17,  as  to  sharing  benefits  derived  absence  of  the  defendant,   the   principal 

by  one.  rights  and  duties  of  the  parties,  implied 


QQ*  REMEDIES    OF    CO-OWNERS    INTER   SE.  [bOOK  I., 

2.    With  resptel  to  chattels. 

Co-owners  of  chattels. — Ships  are  by  far  the  most  important  chattels  usually  owned 
in  common.  But  great  care  is  required  in  applying  the  rules  which  govern  ships  to 
other  chattels ;  for,  in  the  first  place,  the  principles  enforced  in  the  Court  of  Admiralty 
differ  in  many  Important  respects  from  those  by  which  the  ordinary  courts  are  gov- 
erned ;  and,  in  the  next  place,  the  stringent  provisions  of  the  ship  registry  acts  have 
frequently  rendered  it  impossible  to  apply  to  ships  those  general  doctrints  of  equity 
which  are  applicable  to  other  kinds  of  property.  For  the  purpose,  therefore,  of  avoid- 
ing error  in  pursuing  the  present  subject  of  inquiry,  ships  must  be  distinguished 
from  other  chattels. 

1.  Ships. — A  considerable  portion  of  the  law  which  regulates  tlie  mutual  rights  and 
obligations  of  part  owners  of  ships  is  based  upon  the  assumption  that  it  is  particu- 
larly for  the  benefit  of  the  public  that  ships  should  not  lie  idle.  ( /))  Hence  it  is  that 
a  majoritv  of  the  part  owners  of  a  ship  can  employ  her  against  the  will  of  the-others, 
upon  giving  them  security  to  the  value  of  their  shares  ;  {q)  a  course  which  cannot  be 
taken  by  a  majority  of  the  part  owners  of  any  other  chattel.  Where  a  ship  is  sent 
on  a  voyage  by  some  of  the  part  owners  against  the  will  of  the  others,  the  dissenti- 
ents are  not  entitled  to  share  the  profits  of  the  voyage,  (r)  nor  are  they  liable  to  con- 
tribute to  its  losses,  (s)  But  where  a  ship  is  employed  by  all  the  part  owners,  or.by 
some  of  them,  but  not  against  the  will  of  the  others,  (t)  they  all  share  her  gross 
earnings,  and  contribute  to  the  expenses  incurred  in  obtaining  them  ;  and  in  such  a 
case  there  is  little  if  any  difference  between  the  account  which  is  taken  between  the 
part  owners  and  that  which  would  be  taken  if  they  w.ere  actually  partners. 

^Before  any  division  of  profits  amongst  the  part  owners,  the  gross  freight  or 
earnings  of  the  adventure  must  be  applied  in  payment  of  the  expenses  of  the  '- 
voyage  yielding  them,  including  the  costs  of  repairs  and  outfit  for  that  voyage,  (u) 
Lord  Hardwicke  went  further,  and  held  that  each  part  owner  had  a  lien  on  the  ship 

by  the  law  from  their  relation  as  tenants  own  risk  and  under  the  obligations  of  an 

in  common,  were  held  to  be  as  follows  :  equitable  restoration.     The  relation  is  not 

The  right  of  partition,  when  either  desires  a  partnership,  but  is  controlled  in  some 

it;  ilie  right  of  mutual  participation  of  respects   by   analogous   rules.      Smith  v. 

the  fruits  and  revenues,  and  the  conse-  Wilson,  10  La.  Ann.  257. 

quent  duty  to  account  to  each  other  there-  {p)  See  Maclachlan  on  the  Law  of  Mer- 

for;    the  duty  of  the  co-proprietor,  who  chant  Shipping  (2d  ed.),  p.  90. 

is    present,  and   in   actual    possession,  to  (q)  Id.,  p.  94. 

take  the  .same  care  of  the  property  as  if  it  (r)  Anon.,  2  Ch.  Cas.  36 ;  Davis  v.  John- 
were  wholly  his  own;  and  the  right  of  ston,  4  Sim.  539. 

incurring  expenses  necessary  for  the  pres-  (s)  Horn  i'.  Gilpin,  1  Amb.  255.    Davis 

ervation    of   the   common    property,  and  v.  Johnston,  4  Sim.  539,  is  not  opposed  to 

consequent    obligations    of    reimbursing  this.     The  marginal  note,  however,  is  cal- 

one  another  for  such  outlays.     The  court  culated  to  mislead. 

further  said  that  where  one  of  the    pro-  (i)  Strelley  v.  Winson,  1  Vern.  296,  as 

prietors  makes  some  change  in  the  prop-  corrected  by  Horn  v.  Gilpin,  1  Amb.  255. 

erty,  in   the  other's  absence,  unnecessary  (w)  Green  v.  Briggs,  6  Hare  395  ;  Lind- 

for  its  pre-servation,  occasioning  loss  to  his  say  i;.  Gibbs,  22  Beav.  522,  and  26  Id.  51, 

cotenant,  or  which  he    has  just  cause  to  and  3  DeG.  &  J.  690  ;  Alexander  ».  Simms, 

disapprove  of,  the  former  does  so  at  his  18  Beav.  80,  and  5  De  G.,  M.  &  G.  57. 

78 


CHAP.  I.,  §  VI.]    REMEDIES    OF    CO-OWNERS    INTER   SE.  61* 

itself,  and  on  the  proceeds  of  its  sale  for  the  balance  due  to  him  from  the  other 
owners  on  the  joint  account,  and  had  a  right  to  a  sale  of  the  ship  as  if  it  were  'part- 
nership property,  (x)  But  Lord  Eldon  thought  this  was  going  too  far,  and  he 
reversed  Lord  Hardwicke's  decision,  and  it  is  now  settled  that  there  is  no  such  lien  or 
right,  iy)     Lord  Eldon's  view,  however,  has  not  prevailed  in  America,  (z) 

Other  chattels.— Ps^sing  from  ships  to  other  chattels,  the  position  of  a  part  owner 
not  in  possession  was  at  law  most  disadvantageous  ;  for,  first,  he  could  not  obtain 
possession  otherwise  than  by  taking  the  thing  itself  if  he  had  the  chance ;  (a)  second, 
he  could  not  obtain  the  value  of  his  share  unless  the  thing  had  been  actually  or 
virtually  destroyed ;  (6)  and,  third,  these  rules  applied  as  well  to  the  produce  of  the 
thing  as  to  the  thing  itself,  (c)  Whether,  if  one  tenant  in  common  of  a  chattel  sold 
it,  the  other  had  any  remedy  at  law  for  his  share  of  the  money  produced  by  the  sale, 
was  doubtful,  (f/)  unless  the  sale  had  conferred  a  good  title  to  the  entirety  upon  the 
purchaser,  when  a  remedy  clearly  existed,  [e) 

The  obligation  of  a  co-owner  of  a  chattel  to  account  for  the  gain  which  he  might 
have  derived  from  its  use  may  therefore  be  said  to  have  been  hardly,  if  at  all,  recog- 
nized at  law.  In  equity  the  case  was  otherwise,  but  it  is  surprising  how  little  direct 
authority  there  is  upon  the  subject  of  co-ownership,  if  the  decisions  relating  to  ships 
and  the  winding  up  of  partnerships  are  excluded  from  consideration.  The  princi- 
ples, however,  upon  which  these  decisions  are  based  may  safely  be  applied  to  other 
cases  if  the  anomalies  introduced  by  the  ship  registry  acts,  and  the  fact  that  the 
rights  of  partners  and  those  claiming  under  them  depend  upon  contract,  are  borne 
in  mind. 

When  the  profits  derived  by  one  part  owner  of  a  chattel  are  not  attributable  to  his 
own  industry  and  exertions,  but  are  simply  what  he  receives  from  others  in  respect 
of  it  (e.  g.,  dividends  of  stock,  or  shares,  or  money  paid  for  hire)— or  where  the  profits 
are  produced  in  the  ordinary  *course  of  nature  (e.  g.,  by  breeding) — tliere  is 
J  no  difficulty  in  coming  to  the  conclusion  that  his  co-owners  are  entitled  to 
make  him  account  to  them  for  their  shares  of  what  their  property  may  have  produced. 
Further,  when  one  co-owner  of  a  chattel  derives  gain  from  its  use,  and  those  gains 
are  attributable,  mainly  or  in  part,  to  his  own  industry  and  exertions,  justice  to  the 
other  owners  and  to  him  requires  either  that  the  gains  made  by  him  shall  be  shared 
by  all,  they  making  him  a  proper  allowance  for  his  trouble  and  reimbursing  him  his 
expenses,  or  that  he  shall  be  allowed  to  keep  the  whole  profits,  paying  the  other 
•owners  a  proper  sum  for  the  use  of  their  property.  Of  these  two  modes  of  adjusting 
the  rights  of  the  parties,  the  first  seems  to  be  most  in  accordance  with  the  course 

(z)  Doddingtoni;.Hallet,  1  Ves.  Sr.  497,  241,  where  a  whale  had    been  converted 

and  see  Attorney-General  v.  Borrodaile,  1  into  blubber  and  oil. 

Price  148,  and  per  Lord  Eldon,  2  Ves.  &  {d)  See  Heath  v.  Hubbard,  4  East  110 ; 

B.  243.  Mayhew  v.  Herrick,  7  C.  B.  229  ;  Morgan 

iy)  Ex  parte  Young,  2  Ves.  &  B.  242 ;  v.   Marquis,   9  Ex.   145;    Barton   ?;.  Wil- 

Ex  parte  Harrison,  2  Rose  76.  liams,  5  B.  &  A.  395;    and  Williams  v. 

(z)  See  Story  on  Part.,  §  444.  Barton,  3  Bing.  139. 

(a)  Lit.,  §  323,  and  see  2  Wms.  Saund.  (e)  See  Jacobs  v.  Seward,  L.  K.,  5  H.  L. 

47  0.  464,  and  the  cases  in  the  last  note,  and  per 

(6)  Co.  Lit.  200 ;  Jacobs  v.  Seward,  L.  Willes,  C.  J.,  in  Wheeler  v.  Horn,  Willes 

JR.,  5  H.  L.  464.  208. 


(c)  See  Fennings  v.  Grenville,  1  Taunt. 


79 


62*  REMEDIES    OF    CO-OWNERS    INTER   SE.  [bOOK    I., 

usually  adopted  in  analogous  cases.  Notwithstanding,  therefore,  the  little  direct 
autliority  upon  the  point,  the  writer  ventures  to  submit  that  as  a  general  rule  where 
one  owner  of  a  chattel  derives  gain  from  its  use,  he  is,  independently  of  any  contract, 
bound  to  account  to  the  other  owners  for  their  respective  shares,  he  being  allowed  all 
proper  charges  and  expenses.  (/)  *• 

Co-owners  of  patents  and  copyrights.— Cases  may,  nevertheless,  arise  in  which  justice 
may  be  done  by  allowing  each  co  owner  to  make  what  he  can  and  to  keep  what  he 
may  get.  This  may  occur  where  the  chattel  is  such  that  each  co-owner  can,  in  fact, 
enjoy  his  rights  to  the  full  extent,  without  the  concurrence  of  the  other  owners  (e.  g., 
where  the  chattel  is  a  patent  for  an  invention).  In  the  case  of  a  patent,  belonging  to 
several  persons  in  common,  each  co-owner  can  assign  his  share  and  sue  for  an  infringe- 
ment, ig)  and  can  also  work  the  patent  himself,  and  give  licenses  to  work  it,  and  sue 
for  royalties  payable  to  him  for  its  use;  {h)  and  it  is  now  settled  that  he  is  entitled  to 
retain  for  his  own  benefit  whatever  profit  he  may  derive  from  the  working,  although 
it  is  perhaps  still  open  to  question  whether  he  is  not  liable  to  account  for  what  he 
receives  in  respect  of  the  licenses,  (i)  The  mutual  rights  of  co-owners  of  a  copyright, 
not  bein"-  partners,  have  not  been  much  discussed ;  but  it  has  been  decided  that  a 
licen.se  to  represent  a  dramatic  entertainment  granted  by  one  only  of  several  co-owners 
of  the  copyright  in  it,  does  not  bind  the  others ;  nor  prevent  them  from  recovering 
their  shares  of  the  penalties  imposed  by  statute  on  persons  who  infringe  the  copy- 
right, (k) 

If  part  owners  of  an  ordinary  chattel  cannot  agree  who  ought  to  have  it,  or  how  it 
ought  to  be  employed,  the  only  remedy  (if  any)  appears  to  be  by  an  action  for  an 
injunction  or  a  receiver  and  a  sale.  (/) 

(/ )  See  the  judgment  of  Wigram,  V.  C,  (g)  See  Dunniclifi"  v.  Mallet,  7  C.  B.  (N. 
in  Green  v.  Briggs,  6  Hare  395,  and  Strel-  S.)  209,  and  Walter  v.  Lavater,  8  Id.  162. 
ley  V.  Winson,  1  Vern.  297.  See,  also,  1  As  to  tenants  in  common  of  trade-marks, 
Story's  Eq.  Jur.,  |  466.  see  Dent  v.  Turpin,  2  J.  &  H.  139. 

46.  In  an  early  Pennsylvania  case  it  is  {h)  Sheehan  v.  Great  East.  Rail.  Co., 
held    that  joint   purchasers,   without    an    16  Ch.  D.  59. 

agreement  of  partnership,  are  not  entitled        (i)  Mathers  v.  Green,  1  Ch.  29,  revers- 
to  the  remedies  nor  subject  to  the  respon-    ing  S.  C,  34  Beav.  170.     The  same  point 
sibilities  of  partners.     Brady  v.  Calhoun,    was  discussed,  but   not  decided,  in  Han- 
1  Pa.  140.     Thus,  two  joint  owners  of  a    cock  v.  Bewley,   Johns.  601.     See,    also, 
horse  who  enter  into  a  written  contract,    Russell's  Patent,  2  De  G.  &  J.  130;  Hors- 
by  which  one  is  to  keep  the  horse  for  a    ley  v.  Knighton's  Patent,  8  Eq.  475. 
certain   time  at  a  certain  price,  half  of        {k)  Powell  v.  Head,  12  Ch.  D.  686.    See 
which  is  to  be  paid  by  the  other,  are  not    some  observations  on  the  indivisibility  of 
partners,  although  so  calling  themselves    copyright  in  4  H.  L.  Cas.  992. 
in  the  contract,  and  an  action  will  lie  on        (1)  See  Jud.  Act,  1873,  §  25,  cl.  8. 
the   contract  by  one   against   the  other. 
Oliver  v.  Gray,  4  Ark.  425. 

80 


CHAP.  II.] 


CONSIDERATION   OF   CONTRACT. 


63* 


^CHAPTER  II. 


[*63 


OF  THE   CONSIDERATION   OF  A   CONTRACT   OF   PARTNERSHIP. 

Consideration  for  a  partner  skip. — Agreements  to  share  profits,  like 
all  other  agreements,  require  to  be  founded  on  some  consideration  in 
order  to  be  binding.  Any  contribution  in  the  shape  of  capital  or 
labor,  or  any  act  which  may  result  in  liability  to  third  parties,  is  a 
sufficient  consideration  to  support  such  an  agreement,  (a) 

A  bona  fide  contract  of  partnership  is  not  invalidated  by  the  unequal 
value  of  the  contributions  of  its  members,  for  they  must  be  their  own 
judges  of  the  adequacy  of  the  consideration  of  the  agreement  into 
which  they  enter. 

As  observed  by  Vice  Chancellor  Wigram,  "  If  one  man  has  skill 
and  wants  capital  to  make  that  skill  available,  and  another  has  capital 
and  wants  skill,  and  the  two  agree  that  the  one  shall  provide  capital 
and  the  other  skill,  it  is  perfectly  clear  that  there  is  a  good  considera- 
tion for  the  agreement  on  both  sides,  and  it  is  impossible  for  the  court 
to  measure  the  quantum  of  value.  The  parties  must  decide  that  for 
themselves."  (6)  1 


(a)  See  The  Herkimer,  Stewart's  Adm.  organize  a  company  and  appoint  a  treas- 

Eep.  23 ;  Anderson's  Case,  7  Ch.  D.  75.  urer,    and,  pursuant    to    agreement,   one 

(6)  Dale  v  Hamilton,  5  Hare  393.  makes  a  promissory  note,  payable  to  the 

1.  Sufficiency  of  the  consideration. —  one  appointed   treasurer,  for    his  unpaid 

Consent  to  continue  a  partnership  is  a  suf-  share,  the   previous  liability  and    agree- 

ficient  consideration  for  a  promise  by  the  ment  constitute  an  adequate  consideration 

other    partner  to  pay  to  the  one  so  con-  for  the  note.     lb. 

senting  a  portion  of  the  profits.    Emery  v.  Where  the  consideration  of  the  contract 

Wilson,  79  N.  Y.  78.  of  partnership   consisted   of  the  mutual 

When  an  agreement  to  become  stock-  covenants  and  promises  of  the  partners, 
holders  in  a  partnership,  in  sp«"cified  and  the  acts  they  respectively  engaged  to 
shares,  and  to  pay  the  amount  subscribed,  perform,  although  the  business  of  the  part- 
is signed  by  several  persons  with  the  num-  nership  was  the  buying  and  selling  of 
ber  of  shares  and  the  aggregate  amount  slaves,  it  cannot  be  said  that  the  consid- 
thereof  annexed  to  their  names,  although  eration  of  the  contract  was  the  purchase 
no  promisee  is  named  in  the  agreement,  of  slaves.  Belcher  r.  Conner,  1  So.  Car.  88. 
each  party,  in  effect,  promises  to  the  On  the  other  hand,  it  is  held  that  a  part- 
others  to  pay  the  amount ;  and  the  promises  nership  agreement  in  which  one  of  the 
of  the  others  are  a  consideration  for  the  partners  promises  to  give  the  other  part- 
promise  of  each.  Kimmins  i-.  Wilson,  8  ner  an  equal  interest  in  the  profits  of  the 
W.  Va.  584.     And  when  such  subscribers  enterprise,  without    any  thing  being  fur- 

81  '          6 


63* 


CONSIDERATION   OF    CONTRACT. 


[book  I., 


Profits  to  be  shared,  hut  losses  not. — It  often  happens  that  persons 
agree  that  all  profits  shall  be  shared  ratably,  and,  nevertheless,  that  all 
losses  shall  be  borne  by  some  or  one  of  them  exclusively.  Such  an 
agreement  is  not  necessarily  invalid  as  a  nudum  pactum,  for  it  is  noth- 
ing more  than  an  agreement  providing,  amongst  otlrer  things,  that 
some  or  one  of  the  partners  shall  indemnify  the  others  against  losses; 
and  the  very  fact  that  these  latter  become,  or  agree  to  become,  partners, 
is  quite  sufficient  consideration  to  give  validity  to  a  contract  that  they 
shall  be  indemnified.  Such  agreements  appear,  moreover,  to  be  reas- 
onable where  the  partners  *indemnified  leave  the  whole  man- 


*64] 


agement  of  the  concern  to  their  copartners,  (c)  2 


nished  by  the  latter  to  accomplish  the  ob- 
ject of  the  copartnership,  is  without  mu- 
tuality and  accordingly  is  void.  Mitchell 
V.  O'Neale,  4  Nev.  504. 

An  agreement  between  two  physicians, 
F.  and  S.,  provided  for  an  equal  division 
of  the  gross  receipts  of  their  joint  business 
in  a  certain  town.  F.  might  be  absent  six 
months  in  the  year,  or  for  any  remain- 
ing portion  tliereof.  S.  might  be  absent 
when  he  pleased,  but  neither,  if  absent 
more  than  two  days  at  a  time,  should 
have  any  part  of  the  income  derived  from 
the  business  of  the  other  during  such  ab- 
sence. Before  either  should  withdraw 
from  the  contract,  any  horse  or  carriage 
purchased  for  the  joint  business  should  be 
sold,  and  the  loss  sustained  by  the  party 
withdrawing.  If  F.  should  withdraw  and 
cease  to  do  business  in  that  town,  without 
having  shared  the  benefit  of  the  business 
at  all,  then  S.  was  to  pay  him  a  certain 
sum.  Held,  that  so  long  as  the  contract 
was  executory,  there  was  no  evidence  of 
any  consideration  for  the  agreement  to 
pay  the  sum  mentioned,  apparent  on  the 
face  of  the  contract  itself.  Frothingham 
V.  Seymour,  118  Mass.  489. 

(c)  Geddes  v.  Wallace,  2  Bligli  270,  is 
an  instance  of  such  an  agreement.  How- 
ever, in  Brophy  v.  Holmes,  2  Moll.  1,  Lord 
Chancellor  Hart  expressed  an  opinion  that 
an  agreement  between  A  and  B  that  A 
should  advance  capital,  that  B  should  be 


sole  manager,  and  that  they  should  divide 
the  profits  equally,  but  that  all  losses  should 
fall  on  B,  was,  as  regards  the  last  stipula- 
tion, void  as  being  nudum  pactum ;  and 
his  lordship  thought  that  under  such  an 
agreement  the  losses  should  be  borne 
equally.  But  see,  as  to  such  partnerships, 
ante  pp.  *15,  et  seq. 

2.  Sharing  profits  only. — While,  as  a 
general  rule,  a  partnership  presupposes  a 
communion  of  profits  and  losses  among 
all  the  members  of  the  firm,  still  a  dispro- 
portionate interest  in  profits  and  losses 
may  be  agreed  upon,  and  such  a  partner- 
ship agreement  will  be  enforced.  Weldon 
V.  Beckel,  10  Daly  (N.  Y.)  472.  Thus,  an 
agreement  by  which  one  participates  in 
the  profits  only  of  a  business  renders  him 
a  general  partner  as  to  third  persons. 
Claflin  V.  Hirsh,  19  Week.  Dig.  (N.  Y.) 
248.  And  a  stipulation  exempting  a  part- 
ner from  losses  for  a  fair  and  just  equiva- 
lent is  valid  as  to  the  partners  inter  se. 
Consolidated  Bank  v.  State,  5  La.  Ann.  44. 

Where  two  agree  to  be  partners  in  a 
business  in  which  they  are  engaged 
together  they  become  partners,  though 
one  of  them  receives  no  part  of  the 
profits.  Le  Roy  v.  Mathewson,  47  N.  Y. 
Super.  Ct.  389. 

Articles  of  partnership  between  A  and 
B  provided  that  A  should  have  and  bear 
forty-five  per  cent,  and  B  twenty-five  per 
cent,  of  the  profits  and  losses,  and  that 


82 


€HAP.  II.]  RETURN   OF   PREMIUMS.  64* 

Of  the  return  of  premiums. 

Premiums. — It  frequently  happens,  when  one  person  is  admitted 
into  partnership  with  another  already  established  in  business,  that  it  is 
agreed  that  the  incoming  partner  shall  pay  the  other  a  premium,  i.  e., 
a  sum  of  money  for  his  own  private  benefit.  Such  an  agreement  is 
valid,  and  if  the  premium  is  not  duly  paid,  it  may  be  recovered  by  an 
action,  provided  the  plaintiff  has  been  ready  and  willing  to  take  the 
defendant  into  partnership  as  agreed,  (d) 

The  consideration  for  the  premium  is  not  only  the  creation  of  a 
partnership  between  the  person  who  takes  and  him  who  parts  with  the 
money,  but  also  the  continuance  of  that  partnership  ;  and  if  a  person 
on  his  entry  into  a  partnership  pays  a  premium  and  then  the  partner- 
ship is  determined  sooner  than  was  expected,  the  question  arises 
whether  any,  and  if  any,  what  part,  of  the  premium  ought  to  be 
returned. 

In  order  to  determine  this  point,  it  is  necessary,  in  the  first  place,  to 
ascertain  whether  the  agreement  for  the  premium  was  or  was  not 
tainted  with  fraud. 

Premiums  returnable  in  cases  of  fraud. — If  a  person  has  been  de- 
luded into  becoming  a  partner  by  false  and  fraudulent  representations, 
and  has  paid  a  premium,  he  may  take  one  of  two  courses,  viz.,  either 
abide  by  the  contract  and  claim  compensation  for  the  loss  occasioned 
by  the  fraud,  which  he  may  do  in  taking  the  partnership  accounts ;  or 
he  may  disaffirm  the  contract,  and  thereby  entitle  himself  to  a  return 

■thirty  per  cent,  should  be  left  undivided,  store,  and,  to  induce  her  husband  to  man- 
but  to  be  divided  pro  rata  if  not  otherwise  age  the  same,  the  other  defendants  agree- 
disposed  of.  B  wrote  to  C  a  letter,  which  ing  to  endorse  her  paper  to  the  same 
was  signed  by  A  in  his  own  name,  offer-  amount,  which  sum  was  to  go  into  the 
ing  him  of  the  contract  between  them  business,  and  they  were  to  have  an  inter- 
*'  thirty  per  cent,  of  the  profits,  of  which  est  at  all  times  in  the  goods  in  the  store 
I  represent  seventy-five  per  cent.,  you  to  to  the  amount  of  their  endorsement,  sub- 
answer  for  any  loss,"  &c.,  which  proposal  ject,  however,  to  no  liability  except  sucli 
C  accepted.  Held,  that  C  became  a  part-  endorsement.  Held,  that  the  agreement 
ner  in  the  firm,  and  not  merely  a  sharer  did  not  make  the  parties  partners  as  to 
in  the  profits  of  A.  Arquimbo  y.  Hillier,  creditors.  Magovern  v.  Robertson,  40 
49  N.  Y.  Super.  Ct.  253.'  Hun  (N.  Y.)  166. 

E.   entered   into   a    written    agreement        {d)  Walker   v.    Harris,    1    Anstr.  245, 

with  the  other  defendants  by  which  she  where  it  was  held  that  no    partnership 

agreed  to   put  a  stock  of  goods  worth  a  deed  need  be  tendered, 
ipecified  amount  of  money  in  a  certain 

83 


65*  EETURN    OF   PREMIUMS.  [bOOK    I.^ 

of  the  whole  of  the  money  he  has  paid.(e)     And  *in  a  case  . 

of  this  sort,  in  the  event  of  the  bankruptcy  of  the  defrauding 
partner,  the  amount  of  the  premium  paid  to  him  is  a  debt  provable 
against  his  estate  in  competition  with  his  separate  creditors.  (/) 

Return  of  premium  where  the  consideration  for  it  has  failed. — But,  if 
the  ao-reement  by  virtue  of  which  the  partnership  was  entered  into^ 
and  the  premium  became  payable,  is  not  tainted  by  fraud,  then  the 
proper  mode  of  dealing  with  the  premium  is  not  so  easy  to  determine. 
[ii  the  first  place,  assuming  the  partnership  to  have  been  in  fact 
created,  it  is  clear  that  there  has  not  been  a  total  failure  of  considera- 
tion for  the  premium,  and,  consequently,  it  cannot  be  recovered  as 
money  paid  for  a  consideration  which  has  failed,  (^r)  In  the  next 
place,  persons  who  enter  into  partnership  know  that  it  may  be  deter- 
mined at  any  time  by  death  and  other  events,  and  unless  they  provide 
ao-ainst  such  contingencies,  they  may  fairly  be  considered  as  content  to- 
take  the  chance  of  their  happening,  and  the  tendency  of  modern  deci- 
sions is  to  act  on  this  principle,  (h) 

Apportionment  of  premium  when  partnership  ceases  sooner  than  was 
expected. — On  the  other  hand,  if  a  person  receives  a  premium  for  taking 
another  into  partnership,  which  is  to  endure  for  a  certain  time,  and 
then  himself  does  anything  which  determines  the  partnership  before 
that  time  has  elapsed,  he  may  be  fairly  considered  as  having  precluded 
himself  from  insisting  on  his  strict  right  to  retain  or  be  paid  his  whole 
premium.  Moreover,  where  there  has  been  no  misconduct,  a  premium 
paid  for  a  partnership  for  a  term  of  years  has  been  held  apportionable 
in  the  event  of  a  premature  determination  of  the  partnership  by  an 
unforeseen  occurrence.  The  fact  that  the  consideration  for  the 
premium  has  partially  failed  has  been  considered  sufficient  to  render  it 
inequitable  to  retain  or  obtain  payment  of  the  whole  premium,  if) 

(e)  See  infra,  pp.  *65,  et  seq. ;    and   as  (A)   Whincup  v.  Hughes,  L.  R,6  C.  P. 

to  rescinding  for  fraud,  infra,  book  III.,  78 ;  Ferns  y.  Carr,  28  Ch.  D.  409.    See,  also, 

P_  10.  Akhurst  r.  Jackson,   1  Swanst.  85 ;  Bond 

(/)  Ex  parte  Turquand,  2  M.,  D.  &  D.  i-.  Milburn,  20  W.  R.  197. 

339;  and  see  Bury  v.  Allen,  1  Coll.  589.  (i)  Similar  views  have  been  taken  with 

The  case  of  Ex  parte  Broome,  as  reported  respect  to  what  is  right  in  cases  of  a  sim- 

in  1  Rose  69,  is  opposed  to  this,  but  see,  on  ilar  kind,  arising  on  the  death  of  a  solici- 

that  case,  the  note  in  1  Coll.  598,  and  the  tor  who  has  been  paid  a  premium  by  an 

observations  at  the  end  of  the  judgment,  articled    clerk.     See  Hirst   v.   Tolson,    2 

Id.,  p.  607.  Macn.  &  G.  134;  Ex  parte  Bayley,  9  B. 

{g)    See  Taylor  v.  Hare,   1    Bos.  cS:  P.  &   C.    691.     But   these   cases    have   been 

N.  R.  260.  since    disapproved.       See     Whincup    v^ 

84 


CHAP.  II.]  (X)NSIDERATION    OF   CONTRACT.  66* 

*The  principles  applicable  to  cases  of  this  description  are 
J    not  even  yet  well  settled,  nor  are  the  decisions  upon  them  easy 
to  reconcile. 

The  following  rules  are,  however,  submitted  to  the  reader  as  guides 
on  this  subject : 

1.  Partnerships  at  loill. — Where  a  partnership  is  entered  into  for  no 
specified  time,  and  there  is  no  agreement  for  a  return  or  an  apportion- 
ment of  the  premium  in  the  event  of  an  unexpected  determination  of 
the  partnership,  no  part  of  the  premium  is  returnable  on  the  happen- 
ino-  of  such  event.  A  case  of  fraud  must  be  dealt  with  on  its  own 
demerits,  and  a  person  taking  another  into  partnership  for  no  definite 
time  cannot,  as  soon  as  he  has  received  the  premium,  dissolve  the  part- 
nership and  retain  what  has  been  paid  as  the  consideration  for  it.  {k) 
But  laving  aside  fraud,  and  supposing  there  to  be  nothing  except  a 
partnership  created  for  no  specified  time  and  determined  soon  after  its 
creation,  it  is  difficult  to  hold  that  it  was  in  fact  entered  into  for  a 
longer  time,  and  that  the  person  who  came  in,  paying  a  premium,  has 
not  got  all  for  which  he  stipulated,  [l] 

2.  Partnerships  for  a  time.  Agreements  to  dissolve. — Where  a  part- 
nership is  entered  into  for  a  specified  time  and  is  determined  prema- 
turely, the  first  matter  for  consideration  is  whether  the  parties  have 
come  to  any  agreement  on  the  dissolution.  If  they  have,  and  if  they 
have  also  provided  for  the  premium,  it  must  be  dealt  with  according  to 
the  agreement;  but  if  the  agreement  on  dissolution  is  silent  with 
respect  to  the  premium,  the  inference  is  that  the  parties  did  not  intend 
to  deal  with  it,  nor  to  vary  their  rights  to  it  under  the  original  agree- 
ment for  its  payment,  (m) 

*  Where,  however,  no  agreement  is  come  to  on  the  dissolution, 
then  the  cause  of  dissolution  must  be  considered. 

Premature  termination,  a.  By  death. — Death  is  a  contingency  which 
all  persons  entering  into  partnership  know  may  unexpectedly  put  an 
end  to  it.  If,  therefore,  they  do  not  expressly  guard  against  this  risk, 
they  may  reasonably  be  treated  as  content  to  incur  it ;  and  if  death 

Hughes,  L.  R.,  6  C.  P.  78,  and  Ferns  v.  Groote,  2  Bos.  &  P.  134. 

Carr,  28  Ch.  D.  409.  (m)  See  Lee  v.  Page,  30  L.  J.  Ch.  357, 

{k)    Featherstonhaugh    v.    Turner,    25  and  7  Jur.  (N.  S.)  768.     A  mere  consent 

Beav.  382.     See,  also,   Hamil  v.  Stokes,  to  dissolve  may  leave  all  questions  of  this 

Dan.  20,  and  Burdon  v.  Barkiis,  4  De  G.,  sort  open,  as  in  Astle  v.  Wright,  23  Beav. 

F.  &  J.  42,  per  Turner,  L.  J.  77  ;    Wilson  v.   Johnstone,   16    Eq.  606  ; 

(0  See  per  Lord  Eldon,  in  Tattersall  v.  Bury  v.  Allen,  1  Coll.  589. 

85 


67*  RETURN   OF    PREMIUMS.  [bOOK   I.^ 

should  unexpectedly  happen,  no  return  of  premium  not  expressly  pro- 
vided for  can,  it  is  apprehended,  be  demanded,  {n)  But  even  in  this 
case,  if  a  person  knows  himself  to  be  in  a  dangerous  state  of  health 
and  conceals  that  fact,  and  indnces  another  to  enter  into  partnership 
with  him,  and  to  pay  him  a  premium,  and  shortly  afterwards  dies,  the 
fraud  so  practiced  will  entitle  the  partner  paying  the  premium  to  a 
return  of  part  of  it,  and  he  can  obtain  such  return  in  an  action  for  a 
partnership  account ;  he  need  not  rescind  the  contract  in  toto.  (o) 

b.  By  bankruptcy. — Bankruptcy  of  the  partnership,  as  distinguished 
from  the  bankruptcy  of  one  of  the  partners,  cannot,  it  is  apprehended, 
be  a  ground  for  apportioning  a  premium,  for  it  is  a  contingency  which 
every  one  may  fairly  be  taken  as  contemplating,  {p)  But  the  bank- 
ruptcy of  a  partner  receiving  a  premium  is  a  ground  for  its  apportion- 
ment if  he  was  e*iibarrassed  when  the  partnership  commenced,  and  thi& 
fact  was  not  known  to  his  copartner ;  {q)  but  not  if  it  was.  (r)  What 
the  effect  would  be  if  he  became  embarrassed  after  the  commencement 
of  the  partnership,  has  not  been  decided.  The  bankruptcy  of  the- 
partner  paying  the  premium  cannot  entitle  him  or  his  trustee  to  a 
return  of  any  part  of  it,  unless  he  has  been  made  bankrupt  by  his  co- 
partner who  has  received  the  premium,  (s) 

c.  Lunacy. — The  lunacy  of  a  partner  causing  a  dissolution  would 
perhaps  be  considered  as  a  ground  for  apportioning  the  premium. 

*d.  Disagreements. — Disagreements  between  the  partners 
^  resulting  in  a  dissolution  have  given  rise  to  much  difficulty. 
The  tendency  of  modern  decisions  is  to  apportion  the  premium  in 
these  cases,  not  only  where  neither  partner  is  to  blame,  {t)  but  a  fortiori 
where  the  partner  receiving  the  premium  has  so  misconducted  himself 
as  to  give  the  partner  paying  it  a  right  to  have  the  partnership  dis- 
solved, (w)  and  it  matters  not  that  the  latter  may  himself  not  h& 
altogether  free  from  blame ;  {x)  nor  is  tiie  rule  altered  by  the  fact  that 

(n)  See  Whinciip  v.  Hughes,  L.  R.,  6  and  4  Price  161.     In  this  case  it  is  to  be 

C.  P.  78 ;  Ferns  v.  Carr,  28  Ch.  D.  409.  observed  that  the  contract  of  partnership 

(o)  Mackenna  v.  Parkes,  36  L,  J.  Ch.  was  not  rescinded  on  the  ground  of  fraud. 

366,  and  15  W.  K.  217.  (t)  Atwood  v.  Maude,  3  Ch.  369. 

(p)  See  Akhurst  V.  Jackson,  1  Swanst.  (u)  Bullock    v.  Crockett,    3   Giff.   507. 

85,  See,  also,  Rooke  v.  Nisbet,  50  L.  J.  Ch.  588^ 

(g)  Freeland  v.  Stansfeld,  2  Sm.  &  G.  where  the  partner  dissolving  was  in  fault, 

479.  and    was   the   party  to   receive   the   pre- 

(r)  Akhurst  v.  Jackson,  1  Swanst.  85.  mium. 

(s)  As   in   Hamil  v.  Stokes,  Dan.  20,  (z)  Atwood  v.  Maude,  3  Ch.  369  (where 

86 


CHAP.   II.]  CONSIDERATION    OF    CONTRACT.  68*-69* 

the  partners  have  consented  to  clissolv«e  since  the  institution  of  legal 
proceedings,  (y) 

Misconduct. — But  where  a  partner  has  paid  or  agreed  to  pay  a  pre- 
mium, and  has  so  misconducted  himself  as  to  induce  the  court  to  dis- 
solve the  partnership  on  that  ground,  he  cannot  recover  any  part  of  the 
premium  if  he  has  paid  it,  nor  avoid  paying  it  if  it  is  due  and  it  is 
still  unpaid,  (s)  In  Wilson  v.  Johnstone,  (a)  Wickens,V.  C,  held  that 
the  misconduct  must  be  such  as  to  amount  to  a  complete  repudiation 
of  the  contract  of  partnership,  but  he  did  not  lay  down  any  rule  for 
determining  what  misconduct  amounts  to  such  a  repudiation,  and  the 
statement  in  the  text  is  in  accordance  with  the  latest  decision  on  the 
subject.  (6) 

3.  Amount  to  be  returned. — There  is  no  definite  rule  for  deciding  in 
any  particular  case  the  amount  which  ought  to  be  returned.  The  time 
for  which  the  partnership  was  entered  into,  and  the  time  for  which  it 
has  in  fact  lasted,  are  the  most  important  matters  to  be  considered,  but 
other  circumstances  must  often  be  taken  into  *account  in  order 
to  decide  what  is  ftiir  between  the  parties,  {c)  At  the  same 
time,  the  rule  generally  adopted  is  to  apportion  the  premium  with 
reference  to  the  agreed  and  actual  duration  of  the  partnership,  (d) 

The  proper  time  for  obtaining  the  decision  of  the  court  upon  the 
question  whether  any  part  of  a  premium  is  returnable  or  not,  is  the 
hearing  of  the  action.  An  inquiry  on  this  point  will  not  be  added 
afterwards  except  under  special  circumstances,  (e) 

the   partner    paying    the    premiuna    was  {b)  Bluck  v.  Capstick,  12  Ch.  D.  863. 

plaintiff) ;  Astle  v.  Wright,  23  Beav.  77  ;  (c)  Lyon  v.  Tweddell,  17  Ch.  D.  529, 

Pease  v.  Hewitt,  31  Beav.  22.     Compare  which  shows  that  the  court  has  a  wide 

Airey   v.   Borham,    29  Beav.   620,  where  discretion  in  this  matter, 

nothing  was  returned.  {d)  See  Wilson  v.  Johnstone,  16  Eq. 

(y)  Bury  v.  Allen,  1  Coll.  589;  Astle  v.  606  ;  Atwood  v.  Maude,  3  Ch.  369  ;  Bury 

Wright,   23   Beav.   77  ;  Wilson  v.  John-  v.  Allen,  1  Coll.  589 ;  Astle  v.  Wright,  23 

stone,  16  Eq.  606.     Compare  Lee  v.  Page,  Beav.  77  ;  Pease  v.  Hewitt,  31  Beav.  22. 

7  Jur.  (N.  S.)  768,  and  30  L.  J.  Ch.  857.  Compare  Bullock  i.  Crockett,  3  Giff.  507; 

(2)  See  Bluck  v.   Capstick,   12    Ch.  D.  Freeland  v.  Stansfeld,  1   Sm.  &  G.  479; 

868;  Wilson    v.  Johnstone,  16  Eq.  606;  Hamil  t;.  Siokes,  Dan.  20,  where  this  rule 

Airey  v.  Borham,  20  Beav.  620;  Atwood  was  not  adhered  to. 

V.  Maude,  3  Ch.  369.  (e)  Edmunds  v.  Kobinson,  29  Ch.  D. 

(a)  16  Eq.  606.  170. 

87 


70*  NUMBER  OF   PARTNERS.  [bOOK   I., 

*70]  *CHAPTER  III. 

OP  THE  PERSONS  CAPABLE  OF  ENTERING  INTO  PARTNERSHIP. 


Section  I. — Of  the  Number  of  Partners,  *70. 
Section  II.— Of  the  Capacity  of  Partners,  *71. 

1.  Aliens,  *72. 

2.  Felons  and  Outlaws,  *73. 

3.  Li/ants,  *74. 

4.  Lunatics,  *76. 

5.  Married  Women,  ^11 . 

6.  Corporations  and  Companies,  *78. 


The  parties  to  a  contract  of  partnership  may  be  considered  with 
reference  to 

1.  Their  number. 

2.  Their  capacity. 


SECTION    I. OF   THE    NUMBER    OF   PARTNERS. 

Statutes  regulating  the  number  of  persons  who  may  be  partners. — By 
the  common  law  of  this  country  there  is  no  limit  to  the  number  of 
persons  who  may  be  associated  together  in  partnership,  (a) 

But  from  time  to  time  various  statutes  have  been  passed  declaring 
that  certain  partnerships  shall  be  either  altogether  illegal,  or,  at  all 
events,  deprived  of  some  important  rights,  or  exposed  to  serious  pen- 
alties, if  their  members  exceed  a  prescribed  number.  Of  these  statutes 
the  Companies  act,  1862,  is  the  only  one  of  present  practisal  import- 
ance. This  act,  by  section  4,  limits  the  greatest  number  of  persons 
who  can  carry  on  business  as  partners,  otherwise  than  under  its  pro- 
visions, to  ten,  if  the  business  is  that  of  bankers,  and  to  twenty  in 
other  cases.  (6)  But  this  enactment  does  not  apply  to  partnerships 
formed  before  the  2d  of  November,  1862  (see  section  2),  nor  to  those 

(a)  As  to   the  supposed   illegality  of    volume  on  Companies, 
partnerships  so  large  as  to  be  incapable  of        (6)  See,  on  this  subject,  the  volume  on 
practically  suing  and  being  sued,  see  the    Companies. 

88 


CHAP,  III.,  §  II.]  PERSONS   NOT    PARTNERS.  70* 

formed  in  pursuance  of  some  other  act  of  parliament,  or  of  letters 
patent,  nor  to  companies  engaged  in  working  mines  within  and  sub- 
ject to  the  jurisdiction  of  the  stannaries. 

All  the  other  statutes  relating  to  this  subject,  except  the  Banking 
act  of  7  Geo.  IV.,  c,  46,  have  been  repealed  ;  (c)  and  *although 
that  act  is  still  in  force,  no  partnership  or  company  can  now 
be  formed  under  it.     That  act  limited  the  number  of  persons  who 
could  lawfully  carry  on  business  as  bankers  in  partnership  and  issue 
notes  (except  under  certain  restrictions),  to  six.  {d) 


SECTION   II. — OF   THE   CAPACITY   OF   PARTNERS. 

Persons  who  cannot  be  partners. — By  the  law  of  this  country,  a 
valid  contract  of  partnership  can  be  entered  into  between  any  persons 
who  are  not  under  the  disabilities  of  minority  or  unsoundness  of  mind, 
and  are  not  convicts  within  the  meaning  of  33  and  34  Vict.,  c.  23. 
As  will  be  seen  hereafter,  when  treating  of  illegal  partnerships,  there 
are  certain  trades,  businesses  and  professions  which  cannot  be  lawfully 
carried  on,  either  solely  or  in  partnership,  unless  some  statutory  requi- 
site has  been  complied  with.  But  now  that  the  disabilities  under 
which  spiritual  persons  formerly  lay  have  been  removed,  (e)  the  writer 
is  not  aware  that  there  is  any  class  of  persons  (except  convicts)  who, 
being  of  sound  mind  and  over  twenty-one,  are  rendered  incapable  of 
becoming  members  of  a  partnership.  Married  women  may  be  part- 
ners, as  will  appear  later  on. 

Agreements  entered  into  between  several  persons,  some  of  whom  are 
by  law  incompetent  to  contract,  are  not  wholly  null  and  void,  but  are 
only,  in  some  respects,  less  eltective  than  if  all  the  parties  to  them  were 
competent.  Hence,  there  is  nothing  to  prevent  a  person  who  is  not 
sui  juris  from  being  a  partner.     But  if  any  such  person  is  a  partner, 

(c)  A  list  of  them  will  be  found  in  the  enacted  that  contracts  entered  into  con- 
«econd  edition  of  this  treatise,  vol.  I.,  trary  to  them  shall  not  be  void  (see  Lewis 
p.  82.  V.  Bright,  4  E.  &  B.  917).     Consequently 

(d)  See,  on  this  subject,  infra,  book  I.,  the  disabil'ity  under  which  the  clergy 
c.  5,  ^  1.  formerly   lay,    and    which    rendered    all 

(e)  The  law  relating  to  the  clergy  is  partnerships  and  companies  of  which 
now  1  and  2  Vict.,  c.  106,  ^§  29-31,  and  4  they  were  de  facto  members  illegal  (Hall 
Vict.,  c.  14.  Although  a  violation  of  v.  Franklin,  3  M.  &  W.  259),  exists  no 
those  laws  is  attended  with  the  risk  of  longer. 

suspension  and  deprivation,  it  is  expressly 

89 


7l*-72*  ALIEN    PARTXERS.  [bOOK    I.^ 

his  or  her  want  of  capacity  to  contract  will  necessarily  give  rise  to- 
consequences  deserving  special  notice.  These  may  be  considered  as 
they  affect,  first,  aliens ;  second,  felons  and  outlaws ;  third,  infants ; 
fourth,  lunatics ;  fifth,  married  women  ;  and  sixth,  corporations  and 
companies. 

Alien  friends. — There  is  nothing  to  prevent  an  alien,  not  an  enemy, 
from  being  a  partner.  (/)  But  a  public  minister  of  a  foreign  state, 
accredited  to  and  received  by  the  queen,  cannot  be  sued  here  even  in 
respect  of  commercial  transactions  in  which  he  may  have  engaged,  (g) 

Alien  enemies  stand  in  a  very  different  position  from  alien  friends. 

Effects  of  loar  on  the  rights  of  partners. — When  two  supreme 
powers  are  at  war,  all  persons  who,  for  the  time  being,  are  the  subjects 
of  either,  become,  in  contemplation  of  the  civil  tribunals  of  both,  hos- 
tile to  the  subjects  of  the  other,  and  so  long  as  the  war  lasts,  the  sulv 
jects,  for  the  time  being,  of  the  one  country  are  incapable  of  entering 
into  any  valid  contract  with  the  subjects  of  the  other,  and  all  remedies 
available  for  the  one  against  the  other,  in  respect  of  transactions  before 
the  war,  are  suspended,  (li)  Consequently  no  partnership  can  subsist 
between  the  subjects  of  hostile  powers ;  (i)  and  if  two  partners  are 
resident  in  two  different  countries,  their  partnership  is  determined  by 
a  war  between  those  countries.  (A;) 

These  doctrines,  however,  are  only  recognized  and  enforced  by  the 
belligerent  powers.  Neutrals  do  not  apply  them  to  the  determination 
of  commercial  questions  arising  between  the  subjects  of  belligerent 
states. 

It  is  to  be  remembered  that  whether  a  person  is  or  is  not  to  be  con- 
sidered as  an  enemy  depends,  not  on  whether  there  is  war  between  this 
country  and  his  native  land,  but  upon  whether  *there  is  war    ^ 
between  this  country  and  the  country  in  which  he  is  volun-    ^ 

(/)  Co.  Lit.  129  6;  Bac.  Ab.,  "Alien,"    v.  Bell,   8   T.  R.  548.     See   the   note  to 

D.  See,  generally,  as  to  aliens,  33  Vict.,    Clemonston  v.  Blessig,  11  Ex.  141. 

c.  14.  (i)  See  Evans  v.  Richardson,   3  Mer. 

{g)  Taylor  v.  Best,  14  C.  B.  487 ;  Mag-  469 ;  and  infra,  the  chapter  on   Dissolu- 

dalena  Steam  Nav.  Co.  v.  Martin,  2  El.  &  tion. 

E.  94.  [k)  See   Griswold    v.    Waddington,    15 
(A)   Albretcht  v.  Sussmann,  2  Ves.  &  B.  Johns.    (N.    Y.)    57,    and    16    Id.    438. 

323;  Willison  ?;.  Patteson,  7  Taunt.  440;  Whether  peace  operates  retrospectively, 
Ex  parte  Boussmaker,  13  Ves.  71  •  Potts    see  New  York  Life  Ins.  Co.  v.  Statham, 

90 


CHAP.  III.,  §  II.]  FELON    PARTNERS.  73''^ 

tarily  resident.  It  is  the  place  of  his  residence  or  trading,  and  not  the 
place  of  his  birth,  which  is  of  importance  in  these  matters ;  (J)  and 
therefore,  if  a  foreigner  comes  over  here,  enters  into  partnership  here, 
and  dwells  here,  and  then  w^ar  breaks  out  between  this  country  and 
that  of  which  he  is  a  native,  the  partnership  will  not,  nor  will  his 
rights  as  a  partner,  be  affected  by  the  war,  any  more  than  if  he  were 
an  Englishman,  (m)  On  the  otiier  hand,  if  a  partnership  consists 
wholly  of  Englishmen,  some  of  whom  reside  here  and  some  in  another 
country,  and  war  breaks  out  between  that  country  and  this,  the  part- 
ners become  enemies  for  all  purposes  of  trade  and  commerce,  just  as 
much  as  if  those  abroad  were  natives  of  the  country  in  wdiich  they 
reside,  (n)  The  same  is  true,  even  in  the  absence  of  any  fixed  residence 
in  the  belligerent  country,  if  some  of  the  partners  go  over  there  and 
trade  there  during  the  war.  (o) 

2.  Felons  and  outlaws. 

Felons  and  outlaws. — Formerly  a  felon's  or  outlaw's  share  in  a  part- 
nership vested  in  the  crown  ;{p)  and  although  a  felon  or  outlaw  could 
contract, -he  could  not  sue  in  his  own  right  until  his  disability  had  been 
removed ;  i.  e.,  in  the  case  of  felony  until  pardon  or  expiration  of  the 
term  of  punishment,  and  in  case  of  outlawry,  until  its  reversal,  (q) 
But  no  person  could  plead  his  own  attainder  or  outlawry  as  a  defence 
to  an  action  against  him.  (r)     As  regards  outlaws,  the  law  in  these 

,.„,-,  respects  ^remains  unchanged;  the  law,  however,  respecting 
-^  felons  was  materially  altered  by  33  and  34  Vict.,  c.  23.  This 
act  abolished  forfeiture  for  felony,  (.s)  and  empowers  the  cr®wn  to  com- 
mit the  custody  and  management  of  the  property  of  any  convict  (i.  e., 

3  0Uo  (U.  S.)  24;  and  Parsons  on  Part.,  P.   113;    O'Mealey  v.  Wilson,   1    Camp, 

c.  3,  II  1,  3.  482,  and  compare  Eoberts  v.  Hardy, 3  Mau. 

(/)  See  Albretcht  v.  Sussmann,  2  Ves.  &  &  S.  533,  and  Ex  parte  Baglehole,  18  Ves. 

B.   323;   Willison  v.  Patteson,  7   Taunt.  525,  and  1  Rose  271. 

440  ;    Houriet  v.   Morris,  3  Camp.  303  ;  (o)  See  The  Yonge  Klassina,  5  Ch.  Eob. 

Bell  V.  Eeid,  1  Man.  &  S.  726.  303  ;  The  Indian   Chief,  3  Id.  12  ;  The 

(m)  See  Wells  i'.  Williams,  1  Ld.  Raym.  Portland,  Id.  41. 

282,  and  1  Salk.  46,  in  which  it  was  held  ( p)  Bac.  A.b.,  "Felony  and  Outlawry;" 

that  a  plea  of  alien  enemy  was   no  de-  Co.  Lit.  128. 

fence  to  an  action  brought  by  a  foreigner  (5)  lb.,  and  see  Bullock  v.  Dodds,  2  B, 

domiciled  here,  though  there  was  war  be-  &  A.  258. 

tween  his  country  and  this.  (r)  Foster's  Cr.  L.  61. 

(n)  See  McConnell  v.  Hector,  3  Bos.  &  (s)  Section  1. 

91 


74*  INFANT    PARTNERS.  [bOOK   I., 

a  person  sentenced  to  death  or  penal  servitude  (t) )  to  an  administra- 
tor, (u)  in  whom  all  the  convict's  property,  both  real  and  personal,  then 
becomes  vested,  (x)  Moreover,  a  convict  is  absolutely  disabled  from 
alienating  any  property  or  making  any  contracts,  and  from  suing,  (y) 
except  when  lawfully  at  large  under  a  proper  license,  (s)  Provision  is 
also  made  for  the  appointment  of  an  interim  curator  of  a  convict's 
property,  (a)  Practically,  this  act  facilitates  the  dissolution  and  wind- 
ing up  of  a  partnership  in  the  event  of  a  member  being  convicted  of 
felony.  But  it  is  unnecessary  to  allude  further  to  this  statute  in  the 
present  place. 

3.  Infants. 

Infant  partners. — An  infant  may  be  a  partner.  But,  speaking  gen- 
erally, whilst  he  is  an  infant  he  incurs  no  liability  and  is  not  responsi- 
ble for  the  debts  of  the  firm  ;  and  when  he  comes  of  age,  or  even 
before,  he  may,  if  he  chooses,  disaffirm  past  transactions.  (6) 

The  irresponsibility  of  an  inflmt  for  the  debts  of  a  partnership  of 
which  he  is  a  member  is  an  obvious  consequence  of  his  general  inca- 
pacity to  bind  himself  by  contract,  and  does  not  require  to  be  sup- 
ported by  any  special  authority,  (c)  It  might,  perhaps,  be  thought 
that  an  infant  who  held  himself  out  as  a  partner  would  be  liable  to 
persons  trusting  to  his  representations  if  they  did  not  know  him  to  be 
under  age ;  but  this  is  not  so  ;  (d)  and  as  an  infant  is  not  responsible 
for  the  torts  of  *his  agent,  an  inflmt  partner  cannot  be  held  ^ 
liable  for  the  misconduct  of  his  copartners.  The  irresponsi-  *-  . 
bility  of  an  infant  as  a  partner  seems,  therefore,  to  be  complete,  except 
in  cases  of  fraud. 

But  an  infant  who  was  guilty  of  fraud  was  not  so  free  from  liability 
in  equity  as  he  was  at  law,  (e)  and  equitable  as  distinguished  from  legal 

(«)  Section  6.  3  Taunt.  307  ;  and  Burgess  v.  Merrill,  4 

(u)  Section  9.  Id.  468,  show  that  an  infant  partner  ought 

(z)  Section  10.  not  to  be  joined  as  a  defendant  in  an  ac- 

iy)  Section  8.  tion  against  the  firm, 

(z)  Section  30.  (d)  See   Price   v.  Hewitt,  8   Ex.   146  ; 

(a)  Section  21,  et  seq.  Johnson  v.  Pye,  Vin.  Ab.,  ''Enfant,"  H,  2, 

(6)  See  Goode  v.  Harrison,  5  B.  &  A.  pi.  16;  Glossop  v.  Colman,  1  Stark.  25; 

157-159 ;    Ex  parte  Taylor,  8  De  G.,  M.  Green  v.  Greenbank,  2  Marsh.  485. 

<&  G.  254.  (e)  See  Wright  v.  Snowe,  2  De  G.  &  S. 

(c)  Chandler  v.  Parkes,  3  Esp.  76  ;  Jaf-  321. 

fray  v.  Frebain,  5  Id.  47  ;  Gibbs  v.  Merrill, 

92 


CHAP.  III.,  §  II.]  INFANT   PARTNERS.  75* 

relief,  e.  g.,  rescission  of  contract,  may  be  obtained  against  him.  (/) 
In  accordance  with  these  principles,  although,  as  a  rule,  an  infant  can- 
not be  made  bankrupt,  {g)  yet  if  he  fraudulently  represents  himself  as 
of  age,  and  obtains  credit  by  his  false  representations,  and  is  made  bank- 
rupt, the  adjudication  against  him  will  not  be  superseded,  and  his 
deceived  creditors  will  be  paid  out  of  his  estate,  (/i) 

Re])udiation  by  infant. — Moreover,  notwithstanding  the  general  irre- 
sponsibility of  an  infant,  he  cannot,  as  against  his  copartners,  insist 
that  in  taking  the  partnership  accounts  he  shall  be  credited  with  profits, 
and  not  be  debited  with  losses.  The  infant  partner  must  either 
repudiate  or  abide  by  the  agreement  under  which  alone  he  is  entitled 
to  any  share  of  the  profits,  (i) 

Time  for  avoidance  of  infantas  contract. — An  infant  partner  may 
avoid  the  contract  into  which  he  has  entered,  either  before  or  within  a 
reasonable  time  after  he  has  come  of  age.  {k)  If  he  avoids  the  con- 
tract and  has  derived  no  benefit  from  it,  he  is  entitled  to  recover  back 
any  money  paid  by  him  in  part  performance  of  it,  (T)  but  he  cannot  do 
this  if  he  has  already  obtained  advantages  under  the  contract,  and  can- 
not restore  the  party  contracting  with  him  to  the  same  position  as  if 
no  contract  had  been  entered  into,  {m) 

^Ratification  by  infant  of  his  contract. — If,  when  an  infant 
■^  partner  comes  of  age  he  is  desirous  of  retiring  from  the  firm, 
he  should  express  his  determination  speedily  and  unequivocally.  It  is 
true  that  by  the  Infants'  Relief  act,  1874,  (?i)  promises  made  by  a 
person  who  has  attained  twenty-one  to  pay  debts  contracted  before 
that  age  cannot  be  enforced ;  but  a  person  who  retains  a  share  in  a 
partnership  cannot  retain  it  without  its  incidental  obligations,  (o)  and 

(/)  Lempriere  v.  Lange,  12  Ch.  D.  675.  lin  and  Wicklow  Rail.  Co.  v.  Black,  8  Ex. 

(g)  Ex  parte  Jones,  18  Ch.  D.  109 ;  Ex  181. 

parte  Henderson,  4  Ves.  163 ;   Ex  parte  [1)  Corpe  v.  Overton,  10  Bing.  253. 

Lees,  1  Deac.  705  ;   Belton  v.  Hodges,  9  (m)  Holmes  v.  Blogg,  8  Taunt.  508  ;  Ex 

Bing.  365.  parte  Taylor,  8  De  G.,  M.  &  G.  254.    Com- 

(h)  See  Ex  parte  Watson,  16  Ves.  265 ;  pare  Mann's  Case,  3  Ch.  459,  and  Curtis' 

Ex  parte  Bates,  2  Mont.,  D.  &  D.  337  ;  Case,  6  Eq.  455,  where  the  infant  had  sold 

Ex  parte  Unity  Banking  Assoc,  3  De  G.  some  shares,  but  not  the  rest. 

&  J.  63.  (n)  37  and  38  Vict.,  c.  62,  §  2. 

(i)  See  Lon.  &  N.  W.  Rail.  Co.  v.  Mc-  (o)  See  Lon.  &  N.  W.  Rail.  Co.  v.  Mc- 

Michael,  5  Ex.  114,  and  other  cases  of  Michael,  5  Ex.   114;  Cork  and  Bandon 

that  class,  in  the  volume  on  Companies.  Rail.  Co.  v.  Cazenove,  10  Q.  B.  935,  per 

{k)  Co.  Lit.  380  b.  Newry  and  Enniskil-  Coleridge  and  Erie,  JJ. ;  Ebbett's  Case,  5 

len  Rail.  Co.  v.  Coombe,  3  Ex.  565  ;  Dub-  Ch.  302.  Compare  Baker's  Case,  7  Ch.  115. 

93 


76*  INFANT   PARTNERS.  [bOOK    I.j 

the  doctrine  of  holding  out  is  itself  sufficient  to  impose  liability  upon 
an  adult,  although  he  may  not  long  have  attained  his  majority.  This 
is  well  exemplified  in  Goode  v.  Harrison,  {p)  There  an  infant  was  a 
member  of  a  firm,  and  he  was  known  to  be  a  member.  After  he  had 
attained  twenty-one  he  did  not  expressly  either  affirm  or  disaffirm  the 
partnership.  He  was  held  liable  for  debts  incurred  by  his  copartners 
subsequently  to  that  time.  A  person  who,  before  he  comes  of  age, 
represents  himself  as  a  partner,  must,  when  he  comes  of  age,  take  care  to 
notify  that  he  has  ceased  to  be  a  partner  if  he  desires  to  avoid  liability.  1 

( p)  5  B.  &  A.  147.  A  fatlier  invested   his  own  funds   and 

1.  Infant  partners. — An  infant's  part-  personal  services,   and   tlie  funds  of   his 

nership  agreement  is  not  void,  but  voida-  chihiren  in  his  hands  as  guardian,  arising 

ble  only.     Denton  v.  Brown,  31  Mich.  182.  from  an  unauthorized  sale  of  their  prop- 

An  infant  may  be  a  partner,  and  his  erty,  in  a  partnership  for  their   benefit, 

father,    though    indebted    and    insolvent,  The  children  afterwards  sought  to  enforce 

may  release  to  his  son  all  claim  to  his  ser-  the  partnership  in  equity.     Held,  that  the 

vices;  and  the  consent  of  the  father  to  the  other  partner  could  not  avail  himself  of 

son's  becoming  a  partner  is  a  release  of  these  facts  to  avoid  the  contract.     Stein  v. 

his    services.      Penn    v.    Whitehead,    17  Kobertson,  30  Ala.  286. 

Gratt.  (Va.)  503.  Tiiat  the  entering  into  a   commercial 

In  Massachusetts  it  is  held  that  an  in-  business  by  an  infant  is,  in  effect,  a  decla- 

fant  who  enters  into  a  partnership,  con-  ration  to  all  who  deal  with  him  that  he  is 

tributes   capital    and   does  work  for   the  of  full,  age,  see  Studwell  t;.  Shapter,  54  N. 

firm,  cannot,  afterwards,  by  rescinding  the  Y.  249. 

contract,  recover  the  money  so  contribu-  A    widow    and   natural    tutrix   of    her 

ted,  or  recover  for  the  work  so  done,  in  minor   children,    having   the    possession 

the  absence  of  an  express  promise.     Page  and  administration  of  the  property  of  her 

t'   Morse,  128  Mass.  99.  husband's  succession  during  her  life,  en- 

The  New  York   courts,  however,  hold  tered  into  a  partnership  with  the  heirs, 

that  an  infant  partner,  on  rescinding  his  who  were  of  full  age,  and  slaves  and  other 

partnership  contract,    may  recover  from  property  of  the  succession  were  employed 

the  adult  partner,  individually,  the  capi-  and  used  by  the  partnership.     Held,  that 

tal   pkid  to  him.     Sparman  v.  Keim,  83  the  infant  heirs  were  not,  and  could  not 

N.  Y.  245 ;  reversing  44  Super.  Ct.  163.  be  made,  by  her  act,  members  of  the  part- 

A  bill  for  the  dissolution  of  a  partner-  nership ;  and  that  they,  consequently,  af- 
ship  will  not  abate  on  the  filing  by  the  ter  her  death,  had  the  right  to  sue  for  and 
defendant  of  a  plea  of  infancy,  where,  on  recover  from  the  surviving  partners  a  debt 
complainant's  motion  to  reject  the  plea,  it  due  them  by  the  partnership,  before  a  set- 
appears  that  defendant  deceived  him  in  tiement  and  liquidation  of  partnership 
respect  to  his  age.  Bush  v.  Linthicnm,  affairs.  Cuill4  i).  Gassen.  14  La.  Ann.  5. 
59  Md.  344.  But  such  infant  partner  is  An  infant  entered  into  partnership  in 
not  individually  liable  for  firm  debts,  S.  county,  with  two  others,  and  put  in 
aside  from  the  amount  contributed  by  him,  $1000.  Before  his  majority  the  partner- 
in  the  absence  of  ratification  after  major!-  ship  was  dissolved,  he  receiving  his  $1000 
ty,  nor  is  he  amenable  to  the  costs  of  the  back  again.  After  this  he  removed  to  H. 
bill  to  dissolve.     lb,  county,  and  one  A  recovered  a  judgment 

94 


•CHAP.  III.,  §  II.]  LUNATIC   PARTNERS.  76* 

4.  Lunatics. 

Lunatic  pai-tners. — If  a  lunatic  enters  into  a  contract  with  a  person 
who  acts  bona  fide,  and  who  does  not  know  of  the  incapacity  under 
which  the  hinatic  hibors,  the  lunatic  is  so  far  bound  by  the  contract, 
that  if  it  has  been  executed  he  cannot  avoid  it.  (5)  So,  if  a  person 
ionafide  contracts  with  a  lunatic,  without  kno\ving  him  to  be  so,  and 
performs  the  contract,  lunacy  affords  no  defence  to  an  action  for 
remuneration  for  what  has  been  done,  (r)  It  is  not,  therefore,  possible 
to  lay  down  as  a  universal  proposition  that  contracts  entered  into  by 
persons  who  are  lunatics  are  void,  nor  consequently  that  such  persons 
are  incapable  of  being  partners. 

*Any  doubt,  however,  which  might  exist  upon  this  subject  p^„_ 
in  point  of  principle  is  removed  by  those  decisions  which  have 
settled  that  an  existing  partnership  is  not  dissolved  by  the  mere  fact 
tliat  one  of  its  members  has  become  lunatic,  and  that,  notwithstanding 
his  lunacy,  he  is  entitled  to  share  the  profits  made  subsequently  by  his 
copartners,  (s)  To  these  authorities,  which  will  be  examined  hereafter, 
may  be  added  the  case  of  Sadler  v.  Lee,  {t)  in  which  it  was  held  that 
if  a  member  of  a  going  partnership  becomes  imbecile,  he  is  neverthe- 
less responsible  for  the  subsequent  misconduct  of  the  other  members. 
It  seems,  therefore,  that  by  the  law  of  this  country  a  lunatic  is  capable 
of  being  a  partner,  but  all  dealings  and  transactions  with  him  when 
his  lunacy  is  known  are  lial)le  to  be  impeached. 

5.  Married  ivomen. 

Married  women  partners. — A  married  woman  who  has  no  separate 
estate  is  incapacitated  from  entering  into  any  contract  binding  on  her- 

against   the   firm,    including    the   infant,  back,  2  Halst.  (N.  J.)  Eq.  234. 

without   his   knowledge.      A    transferred  {q)  See  Molton  v.  Camroux,  2  Ex.  487, 

the  judgment  to  B.     Three   years  after-  and  4  Id.  17  ;  Beavan  v.  M'Donnell,  9  Id. 

wards,  B  sued  on  the  judgment,  and  re-  309,  and  10  Id.  184. 

covered  a  second  judgment,  no  process  be-  (r)  See  Drew  v.  Nunn,  4  Q.  B.  D.  661 ; 

ing  served  on  the  infant.      B  issued  an  Baxters  The  Earl  of  Portsmouth,  5  Barn. 

execution    to  the   sheriff  of   H.    county,  &  C.  170;  Brown  d.  Jodrell,  3  Car.  &  P. 

which  was  levied  on  the  property  of  the  30.     See,  as  to  the  onus  of  proof  where  the 

infant  there.     He  filed  a  bill,  stating  the  lunatic  has  been  so  found  by  inquisition, 

foregoing  facts,  charging  fraud,  &c.,  and  Snook  v.  Watts,  11  Beav.  107. 

an  injunction  staying  proceedings  on  the  (s)  Jones  v.  Noy,  2  Myl.  &  K.  125. 

-execution  was  issued.     Vansyckle  v.  Ror-  (<)  6  Beav.  324. 

95 


77*  MAKRIED    WOMEN    PARTNERS.  [BOOK    I.^ 

self"(w)  except,  fir«t,  when  the  husband  is  a  convicted  felon  ;  (x)  second, 
when  the  husband  and  wife  are  judicially  separated ;  (y)  third,  where 
the  wife  is  protected  from  her  husband  by  an  order  obtained  under  the 
divorce  acts ;  (z)  fourth,  when  the  husband  is  an  alien  enemy  and 
abroad,  (a)  In  these  cases  the  wife  is  as  capable  of  contracting  as  if 
she  were  unmarried.  By  the  custom  of  London,  moreover,  a  married 
woman  may  be  a  trader,  and  contract  as  if  she  were  not  married.  (6) 
Neglecting  these  exceptions,  it  seems  clear  that  a  married  woman  with- 
out separate  estate,  having  no  capacity  to  contract,  cannot  l^e  a  partner. 
She  may,  however,  be  the  agent  of  other  people  and  bind  them, 
although  not  herself  Moreover,  as  in  the  case  of  infants,  so  in  the 
case  of  married  women  having  no  separate  estate,  holding  themselves 
out  as  partners  does  not  subject  them  to  the  responsibilities  which  are 
incurred  by  other  persons  who  act  in  a  similar  way.  (c) 

^Position  of  married  women  with  separate  estate. — But  a 
'  -'  married  woman  who  has  separate  estate,  which  she  is  not 
restrained  from  anticipating,  is  as  to  such  estate  regarded  as  a,  feme  sole^ 
and  debts  and  obligations  incurred  by  her,  either  expressly  or  impliedly, 
on  the  credit  of  that  estate,  can  be  enforced  against  it,  although  not 
against  her  personally,  (d)  Supposing,  therefore,  that  a  married 
woman  partner  has  such  separate  estate,  it  will  be  liable  for  the  debts 
of  the  partnership,  and  to  that  extent  she  will  be  a  partner,  (e)  But 
her  husband  will  not.  A  married  woman  having  separate  estate  may 
lend  money  to  her  husband,  but  if  lent  to  him  for  purposes  of  trade 
and  he  becomes  bankrupt,  she  is  postponed  to  his  other  creditors ;  (/) 
but  a  loan  by  her  to  a  partnership  of  which  her  husband  is  a  member, 
is  payable  out  of  its  assets  like  any  other  joint  debt,  (g) 

A  married  woman  having  separate  property  and  carrying  on  busi- 
ness separately  from  her  husband,  is  liable  to  the  bankruptcy  laws,  (h) 

{u)  Marshall  v.  Kutton,  8  T.  R.  545.  {d)  See  45  and  46  Vict.,  c.  75,  §g  1,  12, 

(X)  See  Ex  parte  Franks,  7  Bing.  762.  19;  Re  Shakespear,  30  Cli.  D.  169;  Pal- 

iy)  20  and  21  Vict.,  c.  85,  U  25,  26.  User  v.  Gurney,  19  Q.  B.  D.  519. 

(z)  20  and  21  Vict.,  c.  85,  §  21,  and  21  (e)  See  Matthewman's  Case,  3  Eq.  781, 

and  22  Vict.,  c.  108,  'i'i  6-10.  where  she  was  held  a  contributory.     See, 

(a)  Derry  v.  Mazarine,  1  Ld.  Raym.  147 ;  as  to  a  married  woman's  separate  trade, 

Barden  v.  Keverberg,  2  Mees.  &  W.  61.  Ashworth  v.  Outrara,  5  Ch.  D.  923. 

(6)  See,  as  to  this.  Beard  v.  Webb,  2  (/)  45  and  46  Vict.,  c.  75,  §  3. 

Bos.  &  P.  93.  iu)  Ex  parte  Nottingham,  1 9  Q.  B.  D.  88. 

(c)  See  The  Liverpool  Adelphi   Loan  (A)  45  and  46  Vict.,  c.  75,  §  1  (5) ;  Ex 

Assoc.  V.  Fairhurst,  9  Ex.  422.  parte  Gilchrist,  17  Q.  B.  D.  521. 

96 


CHAP.  III.,  §  II.]     CORPORATIONS  PARTNERS. 


78*-79* 


But  her  position,  if  she  carries  on  business  in  partnership  with  him, 
is  not  defined.  There  is,  however,  no  reason  why  she  should  not  do 
so ;  (i)  her  liability  to  the  extent  of  her  separate  estate  for  his  contracts 
and  his  liability  for  hers  would,  in  such  a  case,  be  governed  by  the 
principles  of  agency,  {k)  2 

6.    Corporations  and  companies. 

Corporations,  &c.,  may  he  partners. — There  is  no  general  principle 
of  law  which  prevents  a  corporation  from  being  a  partner  with  another 
corporation  or  with  ordinary  individuals,  except  the  principle  that  a 
corporation  cannot  lawfully  employ  its  funds  for  purposes  not  author- 
ized by  its  constitution.  (/)  Having  regard,  however,  to  this 
*principle,  it  may  be  considered  as  prima  facie  ultra  vires  for  |-^„q 
an  incorporated  company  to  enter  into  partnership  with  other 
persons,  (m)  3 


(z)  See  Butler  v.  Butler,  16  Q.  B.  D.  Erhard,  8  Daly  (N.  Y.)  311 ;  affirmed,  83 
374.  N.  Y.  74;  S.  C,  38  Am.  Kep.  396. 

(k)  A  husband  is  liable  for  his  wife's  In  South  Carolina,  married  women  are 
torts.  Seroka  v.  Kattenburg,  17  Q.  B.  D.  allowed  to  become  feme  sole  traders  after 
177.  the  manner  of   the   custom  of   London. 

2.  Married  women  as  partners. — In  Newbiggin  v.  Pillans,  2  Bay  (S.  C.)  162; 
Massachusetts,  a  husband  and  wife  cannot  Surtell  v.  Brailsford,  Id.  333;  Dial  v. 
enter  into  a  partnership  contract  (Pub.  Neufi'er,  3  Rich.  (S.  C.)  78;  Hobart  v. 
Stat.,  c.  147,  §  2) ;  and  she  is  not  liable  for  Lemon,  Id.  131.  See,  also,  Wallace  v. 
the  rent  of  a  store  hired  by  him  in  their  Rippon,  2  Bay  (S.  C.)  112;  1  ouillier  v. 
joint  names  as  partners.  Bowker  v.  Wernicki,  3  E.  D.  Smith  (N.  Y.)  310; 
Bradford,  140  Mass.  521.  But  a  feme  Wieman  v.  Andeison,  42  Pa.  St.  311. 
covert  may  be  bound  by  a  note  given  in  (l)  See  Gill  v.  Manchester,  Sheffield, 
the  name  of  a  trading  partnership  of  &c.,  Kail.  Co.,  L.  R.,  8  Q.  B.  186,  as  to  one 
which  she  is  a  member,  if  her  husband  company  being  the  agent  of  another,  if 
is  not  a  member  of  the  firm.     Plumer  v.    not  its  partner. 

Lord,  5  Allen  (Mass.)  460.  Otherwise  if  (m)  See  the  American  cases,  Sharon 
her  husband  is  also  one  of  the  firm.  Lord  Coal  Corp.  ?>.  Fulton  Bank,  7  Wend.  (N.Y.) 
V.  Parker,  3  Id.  127.  412;  Catskill  Bank  v.  Gray,  14  Barb.  (N. 

In  New  Hampshire,  the  coverture  of  a  Y.)  479.  As  to  holding  out,  see  Holmes  t). 
female  member  of  the  defendant  firm  at  Old  Colony  R.  R.  Co.,  3  Gray  (Mass.)  58. 
the  time  of  contract  may  be  given  in  evi-  3.  Corporations  as  partners. — At 
dence  to  defeat  the  action.  Brown  v.  common  law,  one  corporation  was  held 
Jewett,  18  N.  H.  230.  competent  to  become  a  member  with  an- 

In  New  York,  a  husband  and  his  wife  other  (Grant  on  Corporations  5),  and 
may  be  partners,  under  the  firm  name  of  upon  principle  there  would  seem  to  be 
the    husband    "  &   Co."     Zimmerman   v.    no  question  but  that  it  may  be  a  partner 

97  7 


CORPORATIONS    PARTNERS.  [bOOK    I., 

with  another  corporation  (Dalton  City  Co.  business  and  purposes  for  which  it  was 
V.  Dalton  Manuf.  Co.,  33  Ga.  243),  or  established,  is  perhaps  questionable,  but 
with  an  individual  (Holmes  v.  Old  Colony  it  is  believed  that  whatever  might  be  the 
R.  R.  Co.,  5  Gray  (Mass.)  58;  Allen  v  rule  as  to  the  rights  of  the  corporation  in 
Woonsocket  Co.,  11  E.  I.  288),  in  any  such  a  firm,  it  might  render  itself  liable 
purpose  connected  with  or  incident  to  its  as  a  partner  to  those  who  dealt  with  the 
business.  Whether  it  can  become  a  part-  firm  in  ignorance  of  the  scope  and  extent 
ner,  and  assume  all  the  rights  and  liabili-  of  its  corporate  rights  and  powers.  Coil- 
ties  as  such  in  a  matter  foreign  to  the  yer  on  Part.,  p.  25. 

98 


CHAP.  IV.J  EVIDENCE   OF    PARTNERSHIP.  80'' 


*80]  *CHAPTER  IV. 

OP  THE  EVIDENCE   BY   WHICH   A   PARTNERSHIP   OR   QUASI   PARTNERSHIP 
MAY   BE    PROVED. 

Evidence  by  tvhioh  a  partnership  or  quasi  j^artnership  may  be 
proved. — The  contract  of  partnership  is  one  of  those  which  does  not 
require  to  be  entered  into  with  any  particular  formalities.  By  the 
common  law  of  this  country,  a  partnership  may  be  constituted  without 
any  official  act,  such  as  registry,  without  any  instrument  under  seal, 
and  even  without  any  writing  whatever  ;  and  this  is  the  law  at  the 
present  time,  except  so  far  as  it  has  been  altered  by  the  statute  of 
frauds,  by  the  acts  relating  to  marine  insurance,  (a)  and  by  the  various 
statutes  relating  to  companies.  But  although  a  partnership  may  be 
constituted  without  any  deed  or  writing,  still,  a  person  who  has  entered 
into  a  mere  verbal  agreement  for  a  partnership  with  another,  will  not 
be  able  to  sustain  an  action  for  its  breach,  unless  he  can  prove  the 
terms  upon  which  the  partnership  was  to  be  entered  into.  (6) 

Statute  of  frauds. — The  only  statutory  enactment  applicable  to 
ordinary  partnerships  is  the  statute  of  frauds,  the  fourth  section  of 
which  enacts,  amongst  other  things  : 

"That  no  action  shall  be  brought  whereby  to  charge  any  person  upon  any  contract 
or  sale  of  lands,  tenements  or  hereditaments,  or  any  interest  in  or  concerning  them, 
or  upon  any  agreement  that  is  not  to  be  performed  within  the  space  of  one  year  from 
the  making  thereof,  unless  the  agreement  upon  which  such  action  shall  be  brought, 
or  some  memorandum  or  note  thereof,  shall  be  in  writing,  and  signed  by  the  party 
to  be  charged  therewith,  or  some  other  person  thereunto  by  him  lawfully  authorized." 

Future  partnerships,  &o. — This  enactment  applies  as  well  to  an 
agreement  for  a  partnership  to  commence  more  than  a  year  from  the 
date  of  the  agree* ment  (c)  as  to  an  agreement  for  a  present 
partnership  to  last  more  than  a  year  from  its  comhiencement.  (d)    '- 

(a)  By  30  Vict.,  c.  23,  §  7,  agreements        (c)  See  per  Holroyd,  J.,  in  Williams  v. 

for  marine  insurance  must  be  in  writing  Jones,  5  Barn.  &  C.  108. 
and  stamped ;  and  a  mutual  marine  in-        (cZ)  lb. ;  and  see  Britain  v.  Rossiter,  11 

Burance  society  which  infringes  these  en-  Q.  B.  D.  123.     But  see,  as  to  this,  McKay 

actments  is  an  illegal  society.     See  infra,  v.  Rutherford,  6  Moore  P.  C.  414,  and  13 

book  I.,  c.  5,  I  1.  Jur.  21. 

(6)  Figes  V.  Cutler,  3  Stark.  139. 

99 


81*  STATUTE    OF    FRAUDS.  [BOOK    I.^ 

But  if  in  either  case  the  parties  have  acted  on  tlie  agreement  and 
become  partners,  they  must  be  treated  as  such,  and  tlie  statute  will  not 
be  applicable,  (e)  1 

Partnerships  in  land. — With  respect  to  that  part  of  the  fourth  sec- 
tion of  the  statute  of  frauds  which  relates  to  lands,  it  is  held,  first, 
that  a  partnership  constituted  without  writing  is  as  valid  as  one  con- 
stituted by  writing ;(/)  and  second,  that  if  a  partnership  is  proved  to 
exist,  then  it  may  be  shown  by  parol  evidence  that  its  property  con- 
sists of  land.  This  was  first  clearly  laid  down  in  Forster  v.  Hale,  {(/} 
where  a  person  attempted  to  obtain  an  account  of  the  profits  of  a 
colliery  on  the  ground  that  it  was  partnership  property,  and  it  was 
objected  that  there  was  no  signed  writing  such  as  the  statute  required. 
But  to  this  the  Lord  Chancellor  observed  : 


"That  was  not  the  question  ;  it  was  whether  there  was  a  partnership.  The  subject 
being  an  agreement  for  land,  the  question  then  is  whether  there  was  a  resulting  trust 
for  that  partnership  by  operation  of  law.  The  question  of  partnership  must  be  tried 
as  a  fact,  and  as  if  there  was  an  issue  upon  it.  If  by  facts  and  circumstances  it  is 
established  as  a  fact  that  these  persons  were  partners  in  the  colliery,  in  which  land 
was  necessary  to  carry  on  the  trade,  the  lease  goes  as  an  incident.  The  partnership 
being  established  by  evidence  upon  which  a  partnership  may  be  found,  the  premises 
necessary  for  the  purpose  of  that  partnership  are  by  operation  of  law  held  for  the  pur- 
poses of  that  partnership." 

The  principle  here    stated   was    carried    to    its    extreme    limit  by 
Vice  Chancellor  Wigram  in  Dale  v.  Hamilton.  (A)     He  held  that  an 

(e)  See  Baxter  v.  West,  1  Dr.  &  Sm.  them,  on  a  contract  made  by  one  of  them 

173,  where  the  partners  had  acted  on,  and  with  another  party  in   the  name  of  the 

were  held  bound  by,  an  unsigned  niemor-  firm.     Drennen  v  House,  41  Pa.  St.  30. 

andum,    continuing     a     partnership    for  Evidence  of  an  agreement  between  a 

seven  years.     See,  also,  Williams  i'.  Wil-  surviving  partner  and  the  brother  of  a  de- 

liaras,  2  Ch.  294,  and   per  Turner,  L.  J.,  ceased  partner   that   upon   the  death  of 

in  Bunion  v.  Barkus,  4  De  G.,  F.  &  J.  47.  the  deceased   jjartner   the  brother  should 

1.  Future  partnerships. — Where  two  become  a  partner  in  the  concern,  and  be 

persons,  as  intended  partners,  purchase  a  entitled  to  a  share  of  the  profits,  is  not 

stock  of  goods  and  agree  to  give    their  sufficient     to     establish     a    partnership, 

notes  therefor,  and  on  receiving  the  goods  Brink  v.  New  Amsterdam  Fire  Ins.  Co., 

at  the  time  fixed,  one  of  them,  the  other  5  Robt.  (N.  Y.)  104. 

being  absent,  signs  and  delivers  the  notes  (/)  Essex  v.  Essex,  20  Beav.  449. 

in  their  joint  names,  the  notes  thus  given  (g)  5  Ves.  309. 

are  firm  notes,  and  the  agreement  and  its  (A)  5  Hare  369 ;  S.  C,  on  appeal,  2  Ph. 

consummation  present  a  strong  prima  facie  266. 
case  of  partnership  in  an  action  against 

100 


€HAP.  IV.]  EVIDENCE    OF   PARTNERSHIP.  82* 

agreement  to  fonu  a  partnership  for  the  purpose  of  buying  and  selling 
land  might  be  proved  by  parol ;  that  it  might  then  be  shown  by  parol 
that  certain  land  had  been  '''bought  for  the  purposes  of  the 
''■^  partnership,  and  consequently,  that  the  plaintiff  was  entitled 
to  a  share  of  the  profits  obtained  by  its  resale.  The  Vice  Chancellor 
•directed  an  issue  as  to  the  fact  of  partnership,  but  his  decision  is  an 
authority  for  the  proposition  that  the  statute  of  frauds  does  not  pre- 
clude a  person  from  establishing  by  parol  an  agreement  to  form  a 
partnership  for  the  purpose  of  buying  and  selling  land  at  a  profit,  (i) 

This  is  certainly  going  a  long  way  towards  repealing  the  statute 
of  frauds.  Dale  v.  Hamilton  was  appealed  from,  and  the  plaintiff 
obtained  a  decree  without  any  issue  as  to  the  fact  of  partnership. 

Both  in  Forster  v.  Hale  and  in  Dale  v.  Hamilton  there  was  a  signed 
writing  showing  a  trust  in  the  plaintiff's  favor;  and  this  circumstance 
was  relied  on  by  Sir  William  Grant  in  the  former  case,  (J)  and  by 
Lord  Cottenham  in  the  latter  ;(^)  but,  curiously  enough,  the  signed 
writing  was  not  made  the  foundation  of  the  decision  of  Lord  Ross- 
lyn  in  Forster  v.  Hale,  and  was  not  considered  sufficient  by  Vice 
Chancellor  Wigram  in  Dale  v.  Hamilton. 

His  decision  is  difficult  to  reconcile  with  sound  principle,  or  with 
the  more  recent  decision  of  Caddick  v.  Skidmore.  (^)  There,  the 
plaintiff  alleged  that  it  had  been  agreed  between  him  and  the  de- 
fendant that  they  should  become  partners  in  a  colliery  and  share  the 
profits  equally.  The  plaintiff  sought  to  enforce  that  agreement.  The 
defendant  denied  the  alleged  agreement,  and  asserted  that  the  true 
agreement  was  that  the  plaintiff  and  the  defendant  should  share  the 
royalties  obtained  from  the  colliery.  The  defendant  also  set  up  the 
statute  of  frauds  as  an  answer  to  the  plaintiff's  claim.  In  this  case, 
no  partnership  in  fact  was  proved,  and  there  was  no  agreement  for  a 
partnership  as  distinguished  from  the  agreement  to  share  the  profits 
of  the  colliery  in  question.  The  terms  of  that  agreement  were  not  in 
writing  and  were  in  dispute.  Under  these  circumstances,  the  statute 
of  frauds  was  properly  held  to  be  a  defence  to  the  action. 

^Pdvt  'performance. — In  considering  cases  of  this  descrip-    p^^^j 
tion,  the  equitable  doctrines  of  part    performance    must    be    ^ 
borne  in  mind.    They  may  enable  a  plaintiff  to  prove  a  parol  agree- 

[i]  See,  too,  Cowell  v.  Watts,  'I  Hall  &        {k)  Dale  v.  Hamilton,  2  Ph.  266. 
T.  224.  {I)  2  De  G.  &  J.  52. 

( j)  Forster  v.  Hale,  3  Ves.  696. 

101 


83*                                      EVIDENCE    OF  PARTXERSHIP.                        [BOOK    I., 

ment  for  sharing  the  profits  arisuig  from  land,  notwithstanding  the 
statute  of  frauds,  (m)  2 

Question  of  partnership  or  no  partnership,  a  mixed  question  of  law 
and  fact — The  question  whether  a  partnership  does  or  does  not  sub- 
sist between  any  particular  persons  is  a  mixed  question  of  law  and 
fact,  and  not  a  mere  question  of  fact.     If  it  comes  before  a  jury,  the 

(m)  See  Cowell  v.  Watts,  2  Hall  &  T.  and  after  having  received  the  full  benefit 

224,  where  the  phiintifF  succeeded  on  this  of  the  transaction,  and  availed  himself  of 

point,  although  by  reason  of  his  laches  he  all  tlie  advantages  arising  from  the  ser- 

failed  to  obtain  a  decree.  vices  rendered  by  his  copartner,  the  other 

2.  Partnerships  in  land. — A  partner-  partner  cannot  be  heard  to    charge  bad 

ship  for  the  purchase  and  sale  of  land  may  faith  on  the  part  of  his  copartner  in  mak- 

be  created  and  proved  by  parol.    Chester  v.  ing  a  purchase  of  land.    Hunter  v.  Wiiite- 

Dickerson,  54  N.  Y.  1 ;  S.  C,  13  Am.  Eep.  head,  42  Mo  524. 

550.     S.  P.,  Traphagen  v.  Burt,  67  N.  Y.  The  fact  that  real  estate  is  treated  in 

30;  Getty  t;.  Devlin,  54  Id.  403;  Tomp-  the   firm   books    like    other    partnership 

kins  V.  Lee,  2  Thomp.  &  C.  (N.  Y.)  589;  property,  is  controlling  as   between    the 

Bissell  V.  Harrington,   18   Hun    (N.  Y.)  partners  tliemselves,  as  respects  intention, 

81.    Co?i<ra  in  California.    Gray  t'.  Palmer,  where  ihe  question  is  whether  the  real 

9  Cal.  616.     But  an  oral  contract  for  the  estate  is  partnership  property.     Fairchild 

joint  purchase  of  land  will  not  constitute  v.  Fairchild,   64  N.  Y.  471;  affirming  a 

a  partnership.     Levy  v.  Bush,  45   N.  Y.  Hun  407. 

589;  reversing  1  Sweeney  653.  If  a  partnership  be  proved  to  exist  by 

While  a  partnership  in  growing  crops  any  memorandum  in  writing,  or  by  the 

may  be  formed  and  proved  by  parol,  a  books  and  other  written    transactions  of 

partnership  in  the  crops,  arising  out  of  an  the  parties,  that  will  suffice  to  establish  a 

alleged   particular   partnership  in    lands  partnershi)p  trust  in  lands,  intended  and 

and  negroes,  cannot  be.     The  latter  is  not  treated  by  Uiem  as  partnership  property, 

a  partnership  by  contract,  but  by  conse-  however  the  lands  be   held    in  law,  and 

quence  of  an  alleged  partnership  in  im-  will  not  be  incompatible  with  the  condi- 

movabies.     Gantt  v.  Gantt,  6    La.  Ann.  tions  of  the  statute  of  frauds.     Fall  Elver 

677.     See,  also,  Dimbar  v.  Bullard,  2  La.  Whaling   Company  v.   Borden,  10  Cush. 

Ann.  810  ;  Benton  v.  Roberts,  4  Id.  216.  (Mass.)  458. 

A   partnership  entered  into  and  com-  In  Alabama  it   has  been   held  that  a 

menced  immediately,  is  not  void,  although  parol  agreement  of  copartnership,  for  the 

one  of  the  declared  objects  is  the  purchase  purchase  of  lands,  is  within  the  statute  of 

of  real  estate  for  the  purposes  of  the  firm,  frauds,  and  will  not  be  enforced  in  equity, 

and  as  a  site  for  the  transaction  of  its  busi-  Larkins  v.  Rhodes,  5  Port.  (Ala.)  195. 

ness.     Smith  v.  Tarleton,  2  Barb.  (N.  Y.)  In  North  Carolina  a  parol  contract  for 

Ch.  336.  the  formation  of  a  partnership,  by  which 

Where  a  proposition  to  form  a  partner-  one  partner  agrees  to  sell  land  to  the  firm,, 
ship  for  tlie  buying  and  selling  of  lands  is  is  void  in  toto,  at  the  ot)tion  of  either  par- 
accepted  and  acted  upon,  and  the  contract  ly.  Clancy  v.  Craine,  2  Dev.  (N.  C.)  Eq. 
is  fully  executed,  it  is  too  late  to  deny  the  363. 

existence  of  the  contract,  or  complain  of  M.  and  S.   being  partners,  the  former 

the  manner  in  which  it  was  entered  into;  purchased  a  tract  of  land  of  R.  which  was 

102 


CHAP.  IV.]                    EVIDENCE   OF   PARTNERSHIP.  83* 

question  must  be  decided  by  them.  They,  taking  their  own  view  of 
the  eifect  of  the  evidence  before  them,  are  bound  to  apply  to  the  facts 
established  to  their  satisfaction  those  legal  principles  which  the  court 
may  lay  down  for  their  guidance,  (w)  3 

occupied  by  both  for  the  uses  of  the  firm.  not.     Everitt  v.  Chapman,  6  Conn.  347 ; 

In  a  suit  against   E.,  to  compel   him  to  Terrill  t).  Richards,  1  Nott  &  M.  (S.  C.)  20. 

convey  the  land  to  S.,  and  the  heirs  of  M.  Where  the  question  as  to  whether,  in  a 

after  the  latter's  decease,  it  was  held  that  given  case,  a   copartnership  existed,  de- 

parol   evidence  was   admissible  to  prove  pends  upon  inferences  to  be  drawn  and  is 

the   partnership,  and   that  the   property  a  matter  of  doubt,  the  question  is  one  of 

was  purchased  with  firm  funds,  and  for  fact  for  the  jury,  under  proper  instruc- 

the  use  thereof,  and  in  pursuance  of  the  tions.     Butler  v.  Finck,  10  N.  Y.  Week, 

partnership  agreement.     Scruggs  v.  Eus-  Dig.  163. 

sell,  McCahon  (U.  S.)  39.  Where  two  creditors  claimed  the  same 

What  is  suflBcient  proof  of  a  partnership  fund,  one  as  the  creditor  of  A,  B,  C  &  Co., 

to  deal  in  land,  see  Chester  v.  Dickerson,  and  the  other  under  D  and  C,  and  there 

54  N.  Y.  1 ;  affirming  52  Barb.  349.  was  evidence  that  they  were  composed  of 

{n)  See   Fox  v.  Clifton,  9    Bing.   117.  the  same  persons,  and  known  under  the 

Formerly  the  Court  of  Chancery  used  to  different  names,  it  was  left  to  the  jury  to 

direct  an  issue  to  try  a  disputed  question  decide  that  fact.     McDufBe  v.  BartleK,  3 

of  partnership  or  no  partnership,  if  there  Pa.  St.  317. 

was  any  real  difficulty  about  it.  See  Mc-  Where  B  and  A  purchased  lands  in  the 
Gregor  v.  Bainhridge,  7  Hare  164,  note,  firm  name,  and  so  sold  to  C,  and  there 
and  the  cases  there  cited,  but  this  is  no  was  evidence  that  they  had  acted  to- 
longer  the  practice.  gether  in  the  purchase  and  sale  of  lands, 
3.  The  question  a  mixed  one  of  law  B  acting  for  the  firm,  and  that  A  was  sat- 
and  fact. — What  is  a  partnership,  is  a  isfied  with  the  sale  to  C  of  the  land  in 
question  of  law ;  its  existence  is  a  ques-  controversy,  the  evidence  was  held  suffi- 
tion  of  fact.  Beecham  v.  Dodd,  3  Harr.  cient  to  justify  the  submission  of  the 
(Del.)  485;  Gilpin  v.  Temple,  4  Id.  190;  questioa  of  partnership  to  the  jury,  and 
Doggett  V.  Jordan,  2  Fla.  541 ;  Drake  v.  of  the  consent  of  B  on  behalf  of  the  firm, 
Elwyn,  1  Cai.  (N.  Y.)  184.  that  the  deeds  should  be  made  to  C's 
Whether  a  partnership  existed  between  vendees.  Bonner  v.  Campbell,  48  Pa.  St. 
two  or  more  persons  is,  after  the  facts  are  286. 

ascertained,  a  question  of  law  ;  but  a  wit-  The  defendant's  evidence  tended  to 
ness  who  knows  the  fact  may,  neverthe-  show  that  B.  and  W.  were  not  members  of 
less,  state,  in  so  many  words,  that  they  an  association.  Evidence  tending  to  show 
were  partners.  The  party  against  whom  that  they  were  members  was  introduced 
the  testimony  is  offered,  if  he  thinks  the  by  the  plaintiffs.  Held,  that  it  was  prop- 
Btatement  is  founded  on  opinion  merely,  erly  submitted  to  tlie  jury,  as  a  matter  of 
should  interrogate  the  witness  as  to  the  fact,  to  determine  whether  or  not  they 
sources  of  his  knowledge.  McGrew  v.  were  members,  and  that  in  determining 
Walker,  17  Ala.  824.  the  question  their  intent  and  understand- 
Where  the  terms  of  the  agreement  and  ing  in  relation  thereto,  at  the  time  they 
the  facts  are  admitted,  it  is  a  question  of  were  alleged  to  have  become  members,  as 
law  whether  there  was  a  partnership  or    gathered  from  the  evidence,  was  a  material 

103 


*84] 


83*  EVIDENCE   OF   PARTNERSHIP.  [bOOK    I,, 

la  considering  the  evidence  which  it  is  necessaiy  to  adduce  in  order 
to  establish  the  existence  of  a  partnership,  two  perfectly  distinct  ques- 
tions immediately  suggest  themselves,  viz.: 

1.  What  is  to  be  proved? 

2.  How  is  it  to  be  proved? 

1.  What  has  to  be  proved  in  order  to  establish  the  existence  of  a 
partnership. — With  reference  to  the  first  question,  the  distinction  be- 
tween partnerships  and  quasi  partnerships  is  all  important,  for  it  by 
no  means  follows  that  persons  who  are  not  partners  are  not  liable  as 
if  they  were;  nor  does  it  follow  that  persons  who  are  liable  as  if  they 
were  partners  are  partners  in  reality.  This  has  been  already  ex- 
plained, and,  in  fact,  the  answer  to  the  first  of  the  above  two 
questions  will  be  found  in  that  portion  of  the  present  work  in 
which  the  nature  of  the  contract  of  partnership  was  discussed,  (o) 

Proof  of  such  a  state  of  things  as  is  sufficient  to  establish  a  quasi 
partnership  is  p^ima  facie  evidence  of  a  real  partner*ship,  (y:») 
but  evidence  which  is  insufficient  to  establish  a  quasi  part- 
nership must,  a  fortiori,  fail  to  establish  a  real  partnership  between 
the  same  persons. 

Sharing  profits  is  only  evidence  of  quasi  partnership  where  agency 
may  be  inferred,  and  where  the  recent  act  28  and  29  A^ict.,  c.  86,  does 
not  apply,  (q) 

The  distinction  between  existing  and  contemjjlated  partnerships 
must  not  be  overlooked ;  and  it  is  obvious  that  if,  in  attempting  to 
establish  a  quasi  partnership,  a  real  partnership  should  be  shown  to 
exist,  the  liability  of  the  persons  sought  to  be  charged  will  only  be 
established  the  more  completely.  4 

consideration    for    the    jury.      Smith   v.  Gray  v.  Palmer,  9  Cal.  616. 

Hollister,  32  Vt.  695.  One  who  seeks  to  prove  a  parol  contract 

(o)  See  ante  p.  *7,  et  seq.  of  partnership  against  the  representatives 

(p)  See  Peacock  v.  Peacock,  2  Camp,  of  a  deceased    person,   is  held    to   strict 

45.  proof  both  of  the  existence  of  the  part- 

(g)  See,  as  to  this,  ante  p.  *31.  nership  and  of  its  terms.     Kelly  v.  Devlin, 

4.  What  must  be  proved  to  establish  47  N.  Y.  Super.  Ct.  555. 

a   partnership. — To    prove   partnership,  Evidence   that   a   person    was    "  inter- 

the  evidence  must  be  stronger  as  between  ested"  in  a  certain  business  is  not  suffi- 

partners  than  others.     Robinson  v.  Green,  cient   to   prove   a  partnership.     Levy  v. 

5  Harr.  (Del.)  115.  McDowell,  45  Tex.  220. 

The  evidence  to  support  the  existence  Tiiat  A  and  B  kept  a  public  house,  and 

of  a  universal  partnership  alleged  by  a  that  they  both  made  purchases  and  bills 

surviving   partner   must    be   very   clear,  in  the  management  thereof  in  the  name 

104 


CHAP.  IV.]  EVIDENCE    OF    PARTNERSHIP.  84* 

2.  Means  of  proof . — With  reference  to  the  means  of  proof,  it  is  the 
province  of  a  writer  on  evidence  to  discuss  the  method  by  whicli  facts 
to  be  established  may  be  proved ;  and  it  is  not  consistent  with  the  plan 
of  this  work  to  examine  the  principles  relative  to  the  production  or 
admissibility  of  evidence.  At  the  same  time,  a  few  observations  on 
some  points  of  practical  importance  with  respect  to  the  mode  of  prov- 
ing the  existence  of  a  partnership  are  laid  before  the  reader,  in  the 
hope  that  they  may  be  found  of  use.  5 

of  "A  &  B,"  is  not  sufficient  proof  that  and   losses,  &c.     Cogswell  v.  Wilson,  11 

they  were  partners.     Banchor  v.  Cilley,  Oreg.  371. 

38  Me.  553.     Compare  Ripley  v.  Colby,  For  the  right  to  show  that  a  pretended 

23  N.  H.  438.  special   partnership  on   the   part  of   the 

5.  Means  of  proof,  generally. — Part-  plaintiffs  is  a  mere  sham,  in  order  that 

nership  must  be   proved  like  any  other  defendant  may  prove  a  set-ofT  against  the 

fact,  and  cannot  be  established  by  mere  one  claiming  to  be  the  general  partner, 

surmise  or  innuendo.     Hudson  v.  Simon,  see  Rosenberg  v.  Block,  102  N.  Y.  255. 

6  Cal.  453.     But  it  may  be  implied  from  The    alleged    partner    may   be    asked 

circumstances    (Kelleher   v.    Tisdale,    23  whether   his  alleged  associates  requested 

111.405;  Gilpin  D.  Temple,  4  Harr.  (Del.)  him    to   join    them    as    a    partner,    and 

190)  ;  and  evidence  that  the  parties  are  whether  he  declined,  and  whether  he  had 

constructively  partners  supports  the  alle-  or  had  not  any  interest  in  the  capital  or 

gation.     Rippey  v.  Evans,  22  Mo.  157.  stock  of  the  alleged  firm.     Adee  v.  Cor- 

Proof  that  two  persons  have  been  en-  nell,  25  Hun  (N.  Y.)  78. 
gaged  together  in  the  same  undertaking,  Usage  may  make  an  incidental  business 
that  they  have  sold  goods,  sued  and  been  so  far  the  regular  business  of  a  partner- 
sued,  jointly,  is  sufficient.  Winslow  v.  ship  as  to  make  all  the  partners  in  a  firm 
Cheflelle,  1  Harp.  (S.  C.)  Ch.  25.  So  bound  by  the  contract  of  one  in  such  in- 
is  proof  of  an  arrangement  for  carrying  cidental  business.  As,  for  example,  the 
on  business  for  a  share  in  the  profits,  pur-  usage  among  the  boatmen  on  a  certain 
suant  to  an  advertisement  for  a  partner,  river  to  undertake  to  sell,  as  well  as  to 
Wilcox  V.  Matthews,  44  Mich.  192.  carry,  cotton,  may  make  a  firm  engaged 

The  plaintiff  in  an  action  on  a  promis-  in  the  carrying  trade  responsible  for  the 

•sory  note,  alleged  to  have  been  executed  selling  and  bringing  back  the  proceeds,  as 

by  the  defendants  as  partners,  may  testify  well  as  carrying  cotton,  upon  a  contract 

that  when  he  accepted  the  note  he  be-  made   between  the  owner  of  the  cotton 

lieved    them  to  be  partners.     Seekell  v.  and  one  of  the  firm  of  boatmen.     Gallo- 

Fletcher,  53  Iowa  330.  way  v.  Hughes,  1  Bailey  (S.  C.)  553. 

Where  an  attempt  is  made  to  charge  In  an  action  for  goods  sold  and  deliv- 
one  as  a  partner  he  may  deny  the  fact  of  ered,  the  defendant  introduced  evidence 
partnership,  and  his  denial  is  admissible  to  prove  a  partnership  between  the  plain- 
in  evidence.  Chambers  v.  Grout,  63  Iowa  tiff  and  anotlier  not  named  in  the  writ. 
342.  But  such  denial  will  be  ineffectual  A  question  by  the  plaintiff  to  his  clerks, 
where  the  evidence  discloses  the  essential  "  whether,  from  the  manner  in  which  his 
elements  of  a  partnership,  such  as  com-  books  were  kept,  and  his  conversations 
munity  of  interest,  the  sharing  of  profits  with  the  supposed  partner,  they  had  any 

105 


84*  EVIDENCE    OF    PARTNERSHIP.  [bOOK    I., 

Where  there  is  no  writing. — As  partnerships,  even  for  long  terms 
of  years,  very  often  exist  in  this  country  without  any  written  agree- 
ment, the  absence  of  direct  documentary  evidence  of  any  agreement  for 
a  partnership  is  entitled  to  very  little  weight.     As  between  the  alleged 


knowledge  of  such   partnership,"  is  im-  Hill  (N.  Y.)   333;    Joseph    v.  Fisher,  3 

proper,    because   leading.      Snodgrass   v.  Scam.    (111.)   137 ;  Goddard  v.   Pratt,   16 

Broadweli,  2  Litt.  (Ky  )  353.  Pick.    (Mass.)    412;    Carlton   v.   Ludlow 

In  assumpsit  against  several  persons  as  Woollen  Mills,  27  Vt.  496.  But  see  Hal- 
partners,  a  part  of  the  defendants  filed  a  liday  v.  McDougall,  22  Wend.(N.  Y.)  264. 
plea  denying  the  partnership;  and  on  the  Nor  can  evidence  of  the  contents  of 
trial  the  court  permitted  to  be  read  in  evi-  printed  cards  be  given  unless  traced  to 
dence  a  paper  in  the  handwriting  of  a  the  defendants.  Wilson  v.  Colman,  1 
former  clerk  of  the  association,  purporting  Cranch  (U.  S.)  C.  C.  408. 
to  contain  a  list  of  stockholders  in  a  mer-  However,  in  Benjamin  v.  Covert  (47 
cantile  association,  in  which  list  the  names  Wis.  375),  it  was  held  that  if  plaintiff 
of  the  defendants  appeared.  No  proof  was  shows  that  a  partnership  existed  between 
offered  that  the  defendants  had  any  knowl-  the  parlies  sought  to  be  charged  as  part- 
edge  of  such  paper,  or  that  it  was  in  the  riers  at  a  certain  time,  and  was  known  to 
handwriting  of  the  clerk  of  the  defend-  the  public  at  the  place  of  business  of  the 
ants.  Held,  that  the  paper  was  inadmis-  firm,  and  that  no  notice  of  dissolution  was 
sible  in  evidence.  Yocum  v.  Benson,  45  ever  given,  he  may  further  show  that  at 
111.  435.  the  time  of   the  transaction   in  question 

The  fact  that  C.  and  8.  entered  into  a  such  partnership,  to  plaintiff's  knowledge, 

written  contract  with  F.  and  P.  to  exca-  was  generally  reputed  to  continue,  and  that 

vate  a  certaia   tunnel    is    not  conclusive  the  debt  was  contracted  in  the  firm  name 

evidence  that  S.  was  a  member  of  the  as-  and  upon  the  credit  of  the  firm,  though 

sociation  known  as  C.  &  Co.,  who  did  ac-  after  a  dissolution  in  fact,  it  being  then 

tually  prosecute  the  work  on  the  tunnel;  for  the  jury  to  determine  whether  the  retir- 

C.  &  Co.  may  have  been  subcontractors  ing  partner  had  so  acted  after  the  dissolu- 

under  C.  and  S.    Sargent  v.  Collins,  3  Nev.  tion  as  to  hold  himself  out  as  still  a  part- 

260.  ner,  and  had  thus  rendered  himself  liable. 

General    reputation. — As    a    genei'al  In  this  case  the  firm  name  was  the  same 

rule,  evidence  of  general  reputation  is  not  as  the  individual  name  of  the  person  who 

admissible  to  prove  a  partnership.     Wil-  continued  the  business,  and  the  plaintiff 

son?;.  Coleman,  1  Cranch  (U.  S.)  C.C.  408  ;  had  never  done  business   with   the  firm 

Campbell  v.  Hastings,  29  Ark.  512;  Sin-  during  its  actual  existence, 

clair  V.  Wood,  3  Cal.  98  ;  Turner  v.  Mcll-  And  it  has  been  held  that  such  evidence 

haney,  8  Cal.  575 ;   Brown  v.  Crandall,  11  is  admissible   in    corroboration  of  other 

Conn.  92;  Earl  i).  Hurd,  5  Blackf.   (Ind.)  evidence  tending   to   prove  one  to   be  a 

248  ;  Grafton  Bank  v.  Moore,  13  N.  H.  99  >  partner  in  a  certain  firm.     Rizer  v.  James, 

McGuiret).  O'llallaran,  Hill  <St  D.  (N.  Y.)  26   Kan.  221.     So,  also,  it  is  competent 

85;    Inglebright  v.  Hammond,   19    Ohio  upon  the  issue  as  to  whether  a  member  of 

337;  Scott  v.  Blood,  16  Me.  192;  Halliday  a  firm  is  a  dormant  partner.     Metcalf  v. 

V.  M'Dougal,  20  Wend.  (N.  Y.)  81 :  Lock-  Officer,  2  Fed.  Rep.  640. 

ridge  v.    Wilson,  7   Mo.   560;    Carter  v.  Again,  evidence  that  it  was  not  gener- 

Douglass,  2  Ala.  499;  Smith  v.  Griffith,  3  erally  known,  in  the  place  of  the  partner- 

106 


CHAP.  IV.]  EVIDENCE    OF    PARTNERSHIP.  84* 

partners  themselves,  the  evidence  relied  on,  where  no  written  agreement 
is  forthcoming,  is  their  conduct,  the  mode  in  which  they  have  dealt 
with  each  other,  and  the  mode  in  which  each  has,  with  the  knowledge 
of  the  other,  dealt  with  other  people.  This  can  be  shown  by  books 
of  account,  by  the  testimony  of  clerks,  agents  and  other  persons,  by 


ship,  that  the  defendant  was  a  partner  of  missible    in    connection   with    other    evi- 

a  certain  house,  is  admissible,  where  the  dence.     Fleshman  v.  Collier,  47  Ga.  253. 

question    is  whether   the   plaintiff  knew  In  an  action  upon  a  note,  an  issue  being 

that  the  defendant  was  a  partner  in  order  whether  a    partnership  existed    between 

to  make  him  liable.     Bernard  v.  Torrance,  the  defendants,  partnership  articles  were 

5  Gill  &  J.  (Md.)  383.     And  when  a  wit-  offered  in  evidence.     Held,  that  they  were 

ness    has   stated   what   he    has   seen    and  not  inadmissible  because  they  only  showed 

heard,  which  tended  to  show  the  existence  a  partnership  in  January,  1857,  when  the 

of  a  partnership,  he  may  be  asked  what  note  was  made  in  October,  1858,  as  it  was 

he  has  seen  and  heard  to  the  effect  that  proper  for  the  jury  to  have  the  articles 

there    was   no   partnership,    in    order    to  before  them,  uiat  they  might  decide  when 

prove  negatively  that  he  had  no  informa-  the   partnership  terminated.     Pursley  v. 

tion  or  knowledge  that  there  was  no  part-  Kamsey,  31  Ga.  403. 

nersiiip.      Conklin    v.    Barton,    43    Barb.  Indirect   evidence  of  partnership.— 

(N.  Y.)  435.  Where  the  existence  of  the  partnership 

What  is  insufBcient   proof  of  partner-  may  be  inferred  from  indirect  evidence,  a 

ship  by  general  reputation,  see  Gulke  v.  finding  to  that  effect  will  not  be  disturbed 

Uhlig,  55  How.  (N.  Y.)  Pr.  434.  for  want  of  direct  evidence.     Henshaw  v. 

Presumption  that  partnership  shown  Root,  60  Ind.  220. 

to    have    once    existed    continued    to  Thus,  where  plaintiff  sues  several  per- 

exist. — Where    a    partnership    has   been  sons  upon  an  account  arising  out  of  stock 

proved   to  have  existed    its  continuance  transactions  claimed  by  him  to  have  been 

will  be  presumed,  in  the  absence  of  proof  jointon  the  part  of  defendants,  but  claimed 

or  presumption  to  the  contrary.     Irby  v.  by  one  of  them  to  have  been  several,  evi- 

Brigham,    9    Humph.    (Tenn.)    750.     In  dence  that  the  defendant  so  claiming  had 

such  case,  it  will  be  presumed  to  continue  a   private  account  running  at  the  same 

iintil  a  dissolution  is  proved,  and  to  have  time  is  competent  as  tending  to  show  that 

been  on  equal  terms  until  the  contrary  is  the  other  account  was  joint  and  not  sever- 

shown.     Key  bold  v.  Dodd,  1  Harr.  (Del.)  al.     Quincey  v.  White,  63  N.  Y.  370. 

401.  But  one  cannot  be  made  a  partner  in 

Thus,  upon  the  question  whether  the  fiict  or  appearance,  so  as  to  bind  him,  un- 

defendants   are    partners    here,    evidence  less  by  his  consent,  admissions  or  acts, 

that  they  were  partners  in  Europe  is  not  Tt^  declarations   or   acts    of  others    can 

so  entirely  irrelevant  that  its  admission  have  no  such  effect  unless  authorized  or 

vitiates  the  verdict.     Martin  v.  Ehrenfels,  ratified  by  him      Bishop  v.  Georgeson,  60^ 

24  111.  187.  111.  484.     Thus,  the  manner  in  which  the 

So,  also,  where  the  matter  to  be  proved  books  of  a  third  person,  seeking  to  charge 
is  that  a  certain  partnership  existed  at  a  one  as  a  partner,  were  kept,  is  not  corn- 
given  time,  evidence  of  its  existence  petent  evidence.  McNamara  v.  Draft,  40 
some  three  months  after  that  time  is  ad-  Iowa  413. 

107 


So' 


EVIDENCE    OF    PARTNERSHIP. 


[book  I., 


letters  and  admissions,  and,  in  short,  by  any  of  tlie  modes  by  which 
facts  can  be  establislied.  (r)  6 

*Jnformal  documents. — An    agreement    for   a   partnership    ^ 
may  be  evidenced  by  informal  documents ;  as,  for  example, 
an  unsi2;ned  memorandum  or  draft  agreement  acted  on  by  the  part- 


(r)  As  to  the  presumption  arising  from 
the  joint  retainer  of  solicitors,  see  Kobin- 
fion  V.  Anderson,  20  Beav.  98,  and  7  De  G., 
M.  &  G.  239 ;  Webster  v.  Bray,  7  Hare 
159;  McGregor  v.  Bainbrigge,  Id.  164. 
And  for  cases  in  which  a  partnership  has 
been  inferred  from  a  number  of  circum- 
fitances,  see  Kerot  v.  Burnand,  4  Russ.  247, 
and  2  Bligh  (N.  S.)  215;  Jacobsen  v. 
Henneiiinius,  5  Bro.  P.  C.  482;  Nich- 
olls  V.  Dowding,  1  Stark.  81 ;  Peacock  v. 
Peacock,  2  Camp.  45.  See,  as  to  obtain- 
ing evidence  from  the  solicitors  of  the 
alleged  partners,  Williams  v.  Miidie,  1 
Car.  &  P.  158. 

6.  Proof  of  partnership  where  there 
are  no  articles. — Written  articles  are  not 
necessary  to  constitute  a  copartnership 
which  is  to  take  effect  immediately.  Smith 
V.  Tarlton,  2  Barb.  (N.  Y.)  Ch.  336 ;  Ran- 
dell  V.  Yates,  48  Miss.  685;  Buffum  v. 
Buffum,  49  Me.  108;  Yorkw.  Clemens,  51 
Ind.  358 ;  Villa  f .  Jonte,  17  La.  Ann.  9. 
Where  the  partnership  is  to  commence 
immediately,  there  need  be  no  written 
agreement,  even  though  it  be  agreed  that 
the  partnership  shall  continue  longer  than 
a  year.     Smith  v.  Tarleton,  supra. 

The  fact  that  persons  conduct  business 
as  copartners  is  prima  facie  evidence  of 
such  copartnersliip,  either  as  between  the 
copartners  or  as  to  third  persons,  and  no 
written  articles  are  required  to  be  shown 
until  they  are  proved  to  exist.  Forbes  v. 
Davison,  11  Vt.  660. 

So,  also,  a  partnership  may  be  proved 
by  parol  evidence  that  the  alleged  part- 
ners severally  admitted  the  fact,  or  held 
themselves  out  !is  such,  and  although  it 
appear  on  the  trial  that  there  was  a  writ- 
ten agreement,  and  no  notice  to  produce  it 
is  proved.     Bryor  v.  Weston,  16  Me.  261 ; 

1 


Anderson  v.  Levan,  1  Watts  &  S.  (Pa.) 
334;  Gilbert  v.  Whidden,  20  Me.  367; 
Dixon  V.  Hood,  7  Mo.  414 ;  King  v.  Ham, 
4  Mo.  275  ;  Field  v.  Tenney,  47  N.  H. 
513;  Widdifield  v.  Widdifield,  2  Binn. 
(Pa.)  245.  To  the  contrary,  see  Thornton 
V.  Kerr,  6  Ala.  823.  And  the  amount  of 
capital  furnished  by  each  partner,  and  the 
manner  of  paying  it  in,  may  be  proved  by 
other  evidence  than  the  articles.  Boyers 
V.  Elliott,  7  Humph.  (Tenn.)  204. 

Even  after  notice  to  produce  the  arti- 
cles, creditors  have  a  right  to  prove  the 
existence  of  a  partnership,  by  parol,  but 
the  partners  must  produce  the  written 
agreement,  and  cannot  offer  parol  proof 
of  its  contents  by  the  creditors'  deponent, 
either  as  cross-examination  or  as  a  con- 
tinuation of  his  deposition.  Hastings  v. 
Hopkinson,  28  Vt.  108.  Thus,  where  part- 
ners, when  sued,  seek  to  eetablish  the  ex- 
istence of  the  partnership,  they  must  pro- 
duce t4ie  letters  of  partnership,  or  give  a 
legal  excuse  for  their  non-production,  be- 
fore the  partnership  can  be  proved  by 
other  evidence.  Bonnaffee  v.  Fenner,  6 
Smed.  &  M.  (Miss.)  212.  And  in  such  an 
action  parol  evidence  to  show  that  articles 
of  copartnership  executed  by  the  defend- 
ants were  to  go  into  operation  only  upon 
a  contingency,  is  inadmissible.  Dix  v, 
Otis,  5  Pick.  (Mass.)  38. 

In  Wilson  v.  Lovelace  (49  Iowa  558), 
^V.  entered  into  a  parol  contract  of  copart- 
nership with  defendants,  but  when  the 
articles  were  prepared,  his  son  was,  at  his 
request,  permitted  to  sign  them  upon  his 
assurance  that  he  was  to  remain  the  real 
party  to  the  agreement,  the  son's  name 
being  used  only  to  conceal  his  association 
with  tiie  firm.  The  conditions  of  the  parol 
contract  were  fully  performed,  while  the 

08 


CHAP.  IV.] 


EVIDENCE    OF    PARTNERSHIP. 


85* 


ners,  (s)  or  a  series  of  letters.  Moreover,  an  agreement  between  A 
and  B  may  disclose  a  trust  for  C,  and  be  evidence  for  him,  and  show 
him  to  be  a  partner,  {t)  7 

A  prospectus  or  advertisement,  issued  by  one  person  and  assented 
to  by  another,  is  abundant  evidence  of  a  contract  upon  the  terms  con- 
tained in  the  prospectus  or  advertisement,  (u) 

Acts  of  alleged  copartner. — When  it  is  sought  to  make  a  person 
liable,  as  if  he  were  a  partner,  evidence  must  be  adduced  of  his  acts, 
or  of  what  has  been  done  by  other  people  with  his  knowledge  or  with 
his  consent,  and  the  plaintiff  must  prove  a  holding  out  to  hims'^lf.  {x) 
The  statements  and  acts  of  the  defendant's  alleged  copartners  are  no 


son's  connection  with  the  partnership  was  the  number  who  shall  sign  the  agreement 

in  fact  treated  as  a  nullity.     Held,  that  to  make  it  valid,  it  is  sufficient  to  prove 

W.  was  liable  as  a  partner.  the  signatures  of  those  associates  who  are 

(s)  Baxter  v.  West,  1  Drew.  &  S.  173  ;  parties  to    the  suit   against    whom   it   i» 

Worts  V.  Pern,  3  Bro.  P.  C.  548  (vol.  1,  p.  offered  in  evidence.   Beach  v.  Vandewater, 

270,  in  folio  ed.)  ;  Williams  v.  Williams,  1  Sandf.  (N.  Y.)  265. 

2  Ch.  294.     See,  as  to  mutual  insurance  In    California   no    particular   form    of 

societies,  ante  p.  *80,  note  (a).  acknowledgment  to  a  certificate  of  part- 

[t]  As  in  Dale  v.  Hamilton,  2  Ph.  266.  nership  is  required.     Fabian  v.  Callahan, 

See,  also,  Murray  v.  Flavell,  25  Ch.  D.  89  ;  .56  Cal.  159. 

Page  V.  Cox,  10  Hare  163.  A  and  B  cannot  be  proved  to  be  part- 

7.  Informal  documents. — A  partner-  ners,  generally,  by  the  production  in  evi- 

nership    agreement   in    writing,   but   not  dence  of  an  agreement  between  them  to 

executed,  is  not  evidence  of  the  terms  and  do  a  particular  piece  of  work  together, 

conditions  of  the  partnership.     Tweed  v.  unless  the  plaintifi"  can  show  that  when 

Lowe,  1  Ariz.  T.  488.     But  see,  to   the  he  sold  the  goods  for  the  price  of  which 

contrary.  Eager  v.  Crawford,  76  N.  Y.  97.  he  sues,  he  knew  of  the  agreement  and 

But   a   written    agreement,  which    alone  acted  on  the  faith   of  it.     Denithorn    v. 

would   not  constitute  a  partnership,  may  Hook,  112  Pa.  St.  240. 

be  put  in  evidence,  together  with  proof  Where  one  has  not  in  any  manner  been 

that  the  parties  have  considered  it  to  con-  held   out  as  a  partner,  and  a   plaintiff, 

stitute  one,  and  have  acted  accordingly,  seeking  to  charge  him  as  such,  produces  a 

Williams  v.  Soutter,  7  Iowa  435.     And  in  written  agreement  between  the  parties  to 

a  suit  against  several  defendants  as  co-  prove  the  partnership,   the   whole  of   it 

partners  it  is  the  privilege  and   duty  of  must  be  read  together.     Plaintiff  cannot 

the  plaintiff  to  establish   the  connection  be  permitted  to  use  such  parts  of  the  agree- 

of  each  one  of  the  defendants  with  the  ment  as  tend  to  establish  a  partnership, 

firm,  and   for  this  purpose  an  unsigned  and  reject  such  parts  as  tend  to  show  the 

partnership    agreement   between  the  de-  contrary.     Manhattan    B.   Manuf.  Co.  v. 

fendants,  and  in  the  handwriting  of  one  Sears,  1  Sweeney  (N.  Y.)  426. 

of  them,  is  admissible  against  him.    Beall  {«)  Fox  i;.  Clifton,  6  Bing.  797,  798. 

V.  Poole,  27  Md.  645.  U)  Dickinson  v.  Valpy,  10  Barn.  &  C. 

In  proving  articles  of  association,  where  140,  ante  p.  *42. 
there  is  no  provision  or  condition  as  to 

109 


85*  EVIDENCE   OF    PARTNERSHIP.  [bOOK    I., 

evidence  against  him  until  he  and  they  are  shown  to  have  been  con- 
nected in  some  way  with  each  other;  and  it  is  obviously  reasoning  in 
a  circle  to  infer  a  partnership  from  acts  of  theirs,  unless  he  and  they 
can  be  connected  by  other  evidence  admissible  against  him.  (y)  8 

(y)  See  1  Tay.  on  Ev.  (8th  ed.),  ?  753  ;    proper  evidence  to  be  left  to  the  jury  in 
Edmundson  v.   Thompson,  2  Fost.  &  F.    determining  the  fact  of  partnership  at  that 
564,  and  8  Jur.  (N.  S.)  235  ;  Grant  v.  Jack-    time.     Gilbert  v.  Whidden,  20  Me.  367. 
son,  Peake  268.  But  proof  that  a  person  was  frequently 

8.  Acts  and  declarations  of  alleged  seen  in  the  counting-house  of  another, 
copartners. — The  assent  of  eacJi  mem-  transacting  business  as  principal,  and  that 
ber  of  a  copartnership  is  necessary  to  he  was  generally  supposed,  believed  and 
bind  him  as  a  member  of  a  new  firm,  but  understood  to  be  a  partner  in  the  house 
his  express  assent  need  not  be  proved  to  of  such  other,  was  held  insuflBcient  to 
bind  him;  it  is  sufficient  to  si  ow  that  he  prove  that  he  was  a  partner  with  such 
knew  of  such  new  arrangement  and  made  other  person.  Bryden  v.  Taylor,  2  Har.  & 
uo  objection  thereto  ;  and  though  a  part-    J.  (Md.)  396. 

ner,  in  fact,  withdraws  from  the  old  firm  The  acts  and  declarations  of  a  person 
before  the  formation  of  the  new,  but  gives  not  a  partner  are  not  admissible  to  charge 
no  notice  thereof,  and  suffers  his  name  to  him  as  a  partner,  without  showing  that 
remain  in  the  firm,  he  may  be  held  for  the  they  were  brought  home  to  the  plaintiff's 
contracts  of  the  new  concern.  Tabb  v.  knowledge.  Fitch  v.  Harrington,  13  Gray 
Gist,  1  Brock.  (U.  S.)  33.  (Mass.)  468. 

Evidence  of  specific  acts  of  intermed-  On  proof  that  subscribers  for  the  capital 
dling  in  the  affairs  of  a  firm  is  admissible  stock  of  an  unincorporated  joint  stock 
to  prove  a  partnership;  but  the  general  company  paid,  without  objection,  assess- 
evidencethat  a  person  has  intermeddled  ments  for  the  shares  set  opposite  their 
is  not  admissible.    Lewis  v.  Post,  1  Ala.  65.    names,  there  being  no  showing  by  whom 

A  note  payable  to  partners  in  their  in-  their  names  were  subscribed,  such  sub- 
dividual  names,  and  assigned  by  one  of  scribers  are  liable  as  copartners  for  the 
the  partners  in  the  name  of  the  firm,  may  debts  of  the  company.  Tyrrell  v.  Wash- 
be  given  in  evidence  by  the  assignee  in  a  burn,  6  Alien  (Mass.)  466  ;  Spear  v.  Craw- 
suit  against  the  maker,  without  proof  of  ford,  14  Wend.  (N.  Y.)  20;  Frost  v. 
the  authority  of  the  partner  who  assigned    Walker,  60  Me.  468. 

it,  although  "non-assignment"  is  pleaded.  The  fact  that  one  did  not  assert  to  a 
Mick  V.  Howard,  1  Ind.  250.  boarder  in  a  hotel  that  he  was  a  partner 

Thus,  where  two  persons  carry  on  the  in  the  business  of  keeping  the  hotel  is  in- 
smithing  business  together,  this  is  prima  competent  to  disprove  the  partnership. 
facie  sufficient  evidence  of  a  partnership  Marvin  v.  Dutcher,  26  Minn.  391. 
between  them.  McMullan  v.  Macken-  The  acts  and  declarations  of  a  defend- 
zie,  2  Gr.  (Iowa)  368.  But  the  declara-  ant,  sued  as  a  partner,  but  on  whom  the 
tions  of  the  alleged  partners,  unaccom-  writ  has  not  been  served,  may  be  given  in 
panied  by  acts,  and  unconnected  with  any  evidence  to  prove  him  to  be  a  partner, 
of  their  declarations  proved  by  the  other  Grafton  Bank  v.  Moore,  14  N.  H.  142. 
party,  are  inadmissible  in  their  own  favor.  Evidence  that  one  was  often  in  the 
Phillips  t).  Purington,  15  Me.  425.  store  conducted  in  the  name  of  another; 

Proof  that  alleged  partners  acted  as  such  that  he  bought,  sold  and  bartered  goods 
before  and   after  the  date  of  a   note  is    there;  inspected    the    books    and    made 

110 


•CHAP,  IV.]  EVIDENCE   OF  PARTNERSHIP.  85* 

Registers,  &c. — Upon  this  principle  it  has  been  held  that  the  regis- 
ters of  ships  are  no  evidence  of  ownership,  except  as  against  the  per- 

charges,  and  went  to  Boston  and  bought  written  in  the  name  of  the  firm  by  L.,  and 

goods  for  the  store,  is  evidence  to  prove  entries  made  by  him  in  the  books  of  L.  & 

that  he  was  a  partner,  he  having  formerly  B.,  are  prima  facie  admissible  in  evidence 

been  a  partner,  and  the  old  sign  of  the  to  charge  him  as  a  partner.  Lewis  v.  Post, 

firm  still  remaining   upon  the  building.  1  Ala.  65. 

State  V.   Wiggin,   20  N.   H.   449.     S.  P.,         When  it  was  proved  that  A  was  in  a 

Dobson  V.  Chambers,  78  N.  0.  334.  store  and  sold  goods  for  cash  and  on  credit, 

Partnership,  or  joint  liability  between  in  order  to  raise  the  presumption  that  A 
two  persons  living  together  upon  a  farm,  was  a  partner — Held,  that  it  was  proper 
may  be  inferred  from  evidence  that  one  to  ask  witness  if  it  is  not  customary  for 
of  them  has  been  in  the  habit  of  ordering  clerks  to  sell  in  this  way,  as  well  as  princi- 
goods  for  their  common  use,  labor  and  pals.  Perry  v.  Butt,  14  Ga.  699. 
materials  for  the  improvement  of  buildings  A  and  B  held  themselves  out  as  part- 
in  their  joint  occupancy,  and  mechanics'  ners  by  advertisements.  A  purclMsed  of 
work  ordinarily  incident  to  farming  oper-  one,  who  supposed  them  to  be  partners, 
.ations  ;  and  that  the  debts  contracted  by  goods  within  the  business  of  the  pretended 
him  have  in  various  instances  been  paid  firm,  though  as  matter  of  fact,  A  did  not 
by  the  products  of  the  farm,  in  the  sale  of  intend  to  bind  B  by  the  purchase.  Held, 
which  both  participated  ;  and  from  the  that  B  was  liable,  unless  the  vendor  knew 
admission  of  one  of  them  that  on  some  that  B  was  not  concerned  in  the  purchase, 
occasions  the  other  had  authority  to  act  Booe  v.  Caldwell,  12  Ind.  12. 
for  both,  although  he  reserved  the  right  Where  ii  was  sought  to  charge  defend- 
to  disavow  such  acts  as  he  might  deem  ants  as  partners  owning  a  mill,  plaintiff" 
disadvantageous.  Farr  v.  Wheeler,  20  N.  introduced  evidence  tending  to  show  that 
H.  569.  one  of  them  exercised  authority  about  the 

Where  the  acts  and  declarations  of  a  mill.  Held,  that  by  way  of  rebutting  the 
defendant  have  been  shown,  in  order  to  inference  that  he  was  interested  as  a  co- 
charge  him  as  a  partner,  he  may  testify  partner,  it  was  proper  to  show  that  others 
what  his  motive  was  in  doing  what  he  gave  like  directions ;  but  not  to  prove  his 
did  ;  e.  g.,  to  aid  two  of  his  relatives  who  statements  disclaiming  such  interest, 
were  members  of  the  firm.  Tracy  v.  Mc-  Sager  v.  Tupper,  38  Mich.  259.  See,  also, 
Manus,  58  N.  Y.  257.  Caliender  v.  Swett,  14  Vt.  160. 

In  determining  whether  a  partnersliip        In  Rube  v.  Burnell  (121  Mass.  450),  on 

as  to  third  persons  exists,  all  the  declara-  the  issue   whetlier  two  persons  were  part- 

tions  by  word  or  act,  of  the  supposed  part-  ners    at    the  date  of  an    alleged  sale  of 

ners,  the  rights  they  have  exercised,  and  goods  to  them,  evidence  of  writings  there- 

every  circumstance  attending  the  transac-  after  executed  between  them,  and  of  one's 

tion,    may  be  proved    by  third   persons,  declaration  to  the  other,  were  held  inad- 

and  must   be  considered   in  determining  missible. 

what  is  the  true  relation  between  the  sup-        When,  in  an  action  to  charge,  with  a 

posed  partners.     Pierson  v.  Steinmyer,  4  firm  debt,  one  who  has  held  himself  out 

Rich.  (S.  C.)  309.  to  be  a  member  of  the  firm,  the  declara- 

Instances    and    illustrations. — In    a  tions   of  the  person    to  whom  the  goods 

suit   against   L.    as    a  partner  in  a   firm  were  sold  are  admissible  as  against   the 

known  by  the  name  of  L.  &  B.,  letters  person  sought  to  be  charged,  see  Green- 

111 


85*  EVIDENCE    OF    PARTNERSHIP.  [bOOK    I., 

sons  upon  whose  affidavit  the  entries  in  the  registers  were  made ;  (2) 
that  entries  in  the  office  in  Somerset  House  for  licensing  stage-coaches 
are  no  evidence  to  prove  that  the  persons  named  in  the  license  are  the 
owners  of  the  coach ;  (a)  and  that  the  acts,  letters  and  statements  of 
one  promoter  of  a  company  are  no  evidence  against  another,  who 
cannot  be  shown  to  have  autliorized  th(!m.  {b)  9 

wood  V.  Sias,  21  Hun  (N.  Y.),  391.  sional  services,  evidence  that  the  defend- 

(z)  Tinkler  v.  Walpnle,  14  East    226 ;    ants  were   described    in    the  writ   in   the 

Flower  v.  Young,  3  Camp.  240;   and  see    former  suit  as  partners  is  not  sufficient  to 

Mclveru  Humble,  16  East  174.  charge  them  jointly  in  the    piesent  case, 

(a)  Strother  v.   Willan,    4  Camp.   24  ;    without  proof  that  they  had  notice  of  the 

Weaver  v.  Prentice,  1  Esp.  369.  existence   of  the  former  suit  during    its 

(6)  See  Drouet  v.  Taylor,  16  C.  B.  671 ;    pendency.    Prentiss  t>.  Kelley,  41  Me.  436. 

Burnside  v.  Dayrell,  3  Ex.  224;   Watson        On  the  trial  of  an  action  brought  against 

V.  Charlemont,  12  Q.  B.  8-56.     This  will    several  as  partners,  only  one  of  whom  has 

be  again  alluded  to  in  a  subsequent  chap-    been  served  with  process,  on  the  question 

iQj.  who  constituted  the  partnership,  the  record 

9    Judgments  and  records  of  former    of  a  former  action  against  the  defendant 

suits. — A  former  judgment  between  the    served  with  process,  in  which  he  pleaded 

same  parties  on  both  sides,  in  which  the    in  abatement  the  non-joinder  of  the  pres- 

defendants  were  described  as  partners  un-    ent   defendants,    is    competent    evidence. 

der  a  given  firm  name,  is  competent  evi-    M'Clelland  v.  Lindsay,  1  Watts  &  S.  (Pa.) 

dence,  in  a  subsequent  suit,  to  prove  the   360. 

defendants  partners  under  the  same  name.  In  a  suit  against  a  firm  on  a  promissory 
Button  V.  Woodman,  9  Gush.  (Mass.)  255.  note,  purporting  to  be  signed  by  the  firm 
And  where  an  action  is  brought  against  name,  a  copartner  pleaded  that  he  was  not 
several  persons  as  partners,  and  they  omit  a  member  of  the  firm  at  the  time  the  note 
to  make  any  defence,  and  allow  judgment  bore  dale.  Held,  th-at  evidence  of  suits 
to  be  taken  against  them  by  default,  the  and  judgments,  in  which  he  was  joined  as 
record  of  such  judgment  is  proper  evi-  a  partner,  by  and  against  the  copartner- 
dence  of  the  existence  of  the  partnership,  ship,  prior  to  the  date  of  the  note,  was 
in  another  action  afterwards  brought  inadmissible  to  rebut  this  plea.  Collier  w. 
against    the   same    persons    by   different    Cross,  20  Ga.  1. 

plaintifls.  Marks  v.  Sigler,  3  Ohio  St.  Books  and  accounts  of  alleged  firm. 
358;  Cragin  v.  Carleton,  21  Me.  492;  —The  firm  books  are  not  alone  competent 
Fogg  V.  Greene,  16  Me.  282 ;  Ellis  v.  evidence  to  prove  the  partnership ;  but 
Jameson,  17  Me.  235.  they  are  evidence  in  connection  with  other 

But  it  is  held  that  a  verdict,  and  judg-  proof  of  partnership,  and  of  access  to  and 
ment  thereon,  are  not  admissible  evidence  knowledge  of  their  contents.  Bryce  v. 
of  a  copartnership,  even  where  that  fact  Joynt,  63  Cal.  375  ;  S.  C,  49  Am.  Rep. 
was  expressly  put  in  issue  by  tiie  plead-  94.  Entries  in  the  books  are  not  evidence 
ings,  unless  the  action,  in  which  such  evi-  against  any  one  to  show  him  to  be  a  part- 
dence  is  offered,  is  between  both  the  parties  ner  in  the  firm.  Kobins  v.  Warde,  111 
to  the  former  suit.  Burgess  v.  Lane,  3  Mass.  244  ;  Abbott  z).  Pearson,  130  Id.  191. 
Greenl.  (Me.)  16-5.  But  the  books  may  be  given  in  evidence 

In  an  action  by  an  attorney  for  profes-    to  fortify  or  discredit  a  witness  who  swears 

112 


CHAP.  IV.] 


EVIDENCE    OF    PARTNERSHIP. 


86^ 


^  -.  *It  need  scarcely  be  observed  that  the  principle  now  under 
discussion  does  not  apply  to  exclude  the  testimony  of  a  person 
deposing  to  the  existence  of  a  partnership  between  himself  and  another. 
Such  testimony  was  not  excluded  even  before  the  alteration  of  the  law 
relating  to  the  competency  of  witnesses,  (c)  and  there  is  no  pretence 
for  excluding  such  testimony  now.  If  a  partnership  is  alleged  to  exist 
between  A  and  B,  and  A  is  called  to  prove  it,  and  he  denies  it,  then, 
although  the  person  calling  A  as  a  witness  cannot  adduce  evidence  to 
show  that  his  testimony  is  generally  unworthy  of  credit,  yet  such  per- 
son may  adduce  other  evidence  to  show  that  the  partnership  denied  by 
the  witness  does,  in  point  of  fact,  exist,  (d) 

Acts  of  copartners  after  prima  facie  evidence  of  partner  skip  has  been 

to  the  partnership.  Moyes  v.  Brumeaux,  has  been  introduced,  the  plaintiff's  books, 
3  Yeates  (Pa.)  30.  containing  original  entries,  may  be  given 

Where,  however,  a  person  has  suffered  in  evidence.  Johnstons.  Warden,  3  Watts 
his  name  to  be  held  out  to  the  world  as  a  (Pa.)  101  ;  Richter  v.  Selin,  8  Serg.  &  R. 
member  of  a  mercantile  firm,  and  permit-    (Pa.)  425. 

ted  persons  to  deal  on  the  credit  of  the  The  headings  in  a  measurer's  abstract 
firm,  he  cannot  object  to  the  admission  in  book,  showing  that  the  defendant  was 
evidence,  as  proof  of  the  partnership,  of  charged  for  the  work  measured,  as  debtor 
books  kept  and  accounts  rendered  in  the  to  the  plaintiff  and  another,  are  inadmis- 
name  of  the  firm.  Chidsey  v.  Porter,  21  sible  as  evidence  for  the  defendant  for  the 
Pa.  St.  390.  purpose  of  proving  a  technical  partner- 

The  continuance  of  the  partnership  re-  ship  between  the  plaintiff  and  such  other 
lation  may  be  proved  notwithstanding  the  party,  there  being  no  offer  to  connect  them 
publication  of  a  notice  of  dissolution  ;  and  with  other  evidence  going  to  show  the  ex- 
enlries  made  thereafter  in  the  partner-  istence,  at  any  time,  of  such  partnership, 
ship  books  are  admissible  to  charge  the  Green  v.  Caulk,  16  Md.  556. 
partner  making  them.  Gilchrist  ii.  Brande,  Where  a  creditor  seeks  to  charge  a  de- 
58  Wis.  184.  fendant   as   a  member  of  a  debtor  firm, 

Where  an  administratrix  of  one  estate  neither  the  reports  of  a  Hiercantile  agency, 
brought  a  claim  against  another  estate,  nor  declarations  of  other  third  persons, 
and  the  defence  gave  evidence  tending  to  are  competent  evidence  to  charge  such 
show  that  the  decedents  were  in  partner-  defendant  as  a  partner.  Cook  v.  Penrhyn 
ship,  and  that  defendant's  intestate  kept  Slate  Co.,  36  Ohio  St.  135. 
the  accounts,  a  book  of  accounts  in  the  Such  reports  are  not  admissible,  unless 
latter's  handwriting  and  containing  en-  knowledge,  or  means  of  knowledge,  of 
tries  purporting  to  have  been  made  in  the  them  is  brought  home  to  tte  party  at- 
presence  of  the  other  partner,  was  held  tempied  to  be  charged.  Campbell  v. 
admissible  as  tending  to  prove  the  copart-  Hastings,  29  Ark.  512;  Bonnell  v.  Cliam- 
nership  and  the  condition  of  the  accounts,    berlain,  26  Conn.  487. 


Howard   v.  Patrick,  38  Mich.  796.     See, 
also,  Hale  v.  Brennan,  23  Cal.  511. 

Plaintiff's  books,  and  books  of  third 
parties. — After  evidence  of  partnership 

113 


(c)  Hall  V.  Curzon,  9  Barn.  &  C.  646; 
Blackett  v.  Weir,  5  Id.  385. 

{(l)  Ewer  V.  Ambrose,  3  Barn.  &  C.  746. 


8 


86^ 


EVIDENCE   OF   PAKTNERSHIP. 


[book 


given. — Further,  it  is  to  be  observed  that  notwithstanding  the  prin- 
ci])le  above  stated,  after  sufficient  evidence  has  been  given  to  raise  a 
presumption  that  several  persons  are  partners,  then  the  acts  of  each 
of  those  persons  are  admissible  as  evidence  against  the  others,  for  the 
purpose  of  strengthening  the  prima  facie  case  already  established. 
Thus,  in  Norton  v.  Seymour,  (e)  in  order  to  prove  a  partnership 
between  the  defendants,  Seymour  and  Ayres,  the  plaintiff  called  a 
witness,  who  deposed  that  Ayres  had,  in  conversation,  admitted  the 
partnership,  and  then  the  p-laintiiFgave  in  evidence  a  circular  and  invoice 
issued  by  Seymour,  and  headed  ''  Seymour  and  Ayres,"  and  stating 
that  the  business  would  in  future  be  carried  on  in  those  names.  Ayres 
objected  to  the  admissibility  of  tiiis  document,  there  being,  as  she 
contended,  no  evidence  to  connect  her  with  it ;  but  the  court  held  it 
to  be  admissible ;  for,  before  the  document  was  put  in,  evidence  of  a 
partnership  had  been  given,  and  the  document  tended  to  confirm  that 
evidence.  So,  in  Nicholls  v.  Dowding,  (/)  prima  facie  evidence  of  a 
j)artnership  having  been  given,  the  declarations  of  one  of  the  defend- 
ants were  inquired  into  for  the  purpose  of  binding  the  others,  and  it 
was  held  that  such  evidence  was  admissible,  a  foundation  for  it  having 
been  previously  laid.  (^.)  10 


(e)  3  C.  B.  792. 

(/)  1  Stark.  81. 

{g)  See,  too,  Alderson  r.  Clay,  1  Stark. 
405. 

10.  Acts  of  copartners  after  prima 
facie  proof,  &c. — A  partnership  must 
first  be  proved  aliunde,  before  the  declara- 
tions of  one  partner  can  affect  the  other ; 
and  evidence  to  sliow  a  continuance  of  a 
partnership,  after  it  has  been  dissolved, 
with  notice  to  the  parties,  must  be  as 
satisfactory  as  that  required  to  show  its 
establishment.  AUcott  v.  Strong,  9  Cush. 
(Mass.)  323.  But  after  pj-ima  facie  evi- 
dence of  partnersliip,  the  declarations  of 
one  of  the  partners  are  evidence  to  bind  the 
firm,  although  made  on  oath  voluntarily 
by  him,  under  the  South  Carolina  sum- 
mary process.  Allen  v.  Owens,  2  Spears 
(S.  C.)  170. 

Accordingly,  evidence  that  legal  ser- 
vices were  rendered  in  the  joint  names  of 
an  attorney-at-law  and  anotlier  person,  is 


not  sufficient  to  prove  a  partnership  be- 
tween them,  and  thus  defeat  an  action 
for  such  services  brought  by  the  attorney 
alone.  Bishop  v.  Hall,  9  Gray  (Mass.) 
430. 

(So,  also,  the  rescission  or  modification 
of  a  partnersliip  agreement  cannot  be 
proven  by  loose  declarations  or  conversa- 
tions, especially  when  the  subsequent  con- 
duct of  the  parties  accords  with  their 
original  contract.  Autrey  v.  Frieze,  59 
Ala.  587. 

Where  one  was  a  partner  in  1855  and 
1857,  but  claimed  that  for  1856  he  was 
not,  his  withdrawal  being  evidenced  by  a 
deed  which  was  lost,  and  it  turned  out 
that  he  himself  had  destroyed  the  deed, 
and  he  answered  delusively  about  it,  and 
it  appeared  that  he  had  acquiesced  in 
certain  acts  of  his  partner,  treating  him 
as  such,  it  was  held  that  he  was  to  be  con- 
sidered as  a  partner  in  1856  also.  Clem- 
ents V.  Mitchell,  6  Jones  (N.  C.)  Eq.  171. 


114 


€HAP.  IV.]  EVIDENCE   OF    PARTNERSHIP.  87* 

*Proof  of  articles,  &g.,  not  necessary. — A  person  may  be  p^^_ 
made  liable  as  if  he  were  a  partner  without  the  proof  of  any 
partnership  articles  or  deed  which  he  may  have  executed.  (A)  And 
although,  in  order  to  prove  an  actual  partnership,  it  may  be  neces- 
sary, by  the  law  of  some  other  country,  to  show  that  some  formality 
has  been  observed,  the  non-observance  of  that  formality  will  not  pre- 
vent persons  who  in  fact  trade  as  partners  from  being  so  treated  in 
this  country  in  questions  arising  between  them  and  third  parties,  (i)  H 

Admissions. — An  admission  made  by  any  one  that  he  is  a  member 
of  a  particular  partnership  is  evidence  of  that  fact  against  him ;  {k) 
and  such  an  admission  renders  it  unnecessary  for  the  purpose  of  fixing 
him  with  the  liabilities  of  a  partner,  to  show  that  he  executed  any 
document  whereby  he  became  a  partner.  (I) 

Admissions,  however,  are  not  necessarily  conclusive,  and  little  weight 
ought  to  be  attached  to  them  if  it  is  shown  that  they  were  made  under 
erroneous  suppositions.  This  seems  to  have  been  the  true  ground  of 
the  decision  in  the  much  debated  case  of  Vice  v.  Anson,  (m)  There 
the  defendant  supposed  herself  to  be  a  shareholder  in  a  mine ;  she  had, 
in  private  letters  and  in  private  society,  written  and  spoken  of  herself 
as  a  shareholder ;  she  had  received  certificates  stating  that  her  name 

A  sued  B  and  C,  as  the  owners,  in  part-  11.   Proof  of  articles,  &c.,  not  neces- 

nersliip  of  a  race-course,  for  work  done  sary. — After   receiving    the   services   of 

thereon.     C  denied,  under  oath,  the  part-  one  as  a  partner,  and  recognizing  him  as 

nership,    and    after    proof    of    a   written  such  for  several  years,  it  is  too  late  to  set 

agreement  between  B  and  C,  for  the  con-  up  either  the  non-payment  of  his  portion 

struction  of  the  course  at  joint  expense  of  the  capital  stock  or  the  non-execution 

and    profit,    A    offered     to     prove    that  of  articles  of  partnership  as  proof  that  no 

although  he  was  employed   by   B  to  do  partnership  existed.     Campbell  v.  Whit- 

the  work,  yet  that  C  was  often  present,  ley,  39  Ala.  172. 

giving  orders  and  directions  concerning  {k)   Sangster    v.   Mazarredo,    1    Stark. 

it,  and  shared  the  profits  of  the  course  161 ;   Studdy  v.  Saunders,  2  Dowl.  &  K. 

after  it  was   completed.     Held,  that  the  347 ;  Clay  v.  Langslow,  1  Moo.  &  M.  45. 

proof  was  admissible  as  tending  to  estab-  (/)  Harvey  v.  Kay,  9  Barn.  &  C.  356 ; 

lish    the    partnership,    and    their    joint  Ealph  v.  Harvey,  1  Q.  B.  845;  and  see 

liability  as  partners  for  the  work.     Perry  Tredwen  v.  Bourne,  6  Mees.  &  W.  461. 

V.  Randolph,  14  Miss  335.  (m)  7  Barn.  &  C.  409,  and  Moo.  &  M.  98. 

{h)  Alderson    v.    Clay,    1    Stark.    405,  See,  on  this  case,  Owen  v.  Van  Uster,  10 

where  a  person  was  proved  to  be  a  mem-  C.  B.  318,  and  qu.  if  it  is  law  ;  for  though 

ber  of  a  company  without  the  production  the  defendant  had  no  legal  interest  in  the 

of  the  company's  deed.  mine,  was  she  not  entitled  as  a  partner  to 

(i)  Shaw  V.  Harvey,  Moo.  &  M.  526 ;  share  the  profits  obtained  by  working  the 

Maudslay  v.  Le  Blanc,  2  Car.  &  P.  409,  mine?    And  what  more  was  necessary  to 

note.  make  her  liable  to  the  supplier? 

115 


87*  EVIDENCE   OF    PARTNERSHIP.  [bOOK    I., 

was  registered  in  the  act-book  of  the  mine,  and  that  she  was  entitled 
to  share  the  profits  of  it ;  and  lastly,  she  had  paid  deposits  on  her  shares. 
But  Lord  Tenterden  held  that  she  had  not,  in  point  of  fact,  any 
interest  in  the  mine,  and  that  as  she  never  represented  to  the  plaintiff 
that  she  was  a  shareholder  therein,  she  could  not  be  made  liable  to  him 
simply  because  of  her  erroneous  suppositions  and  admissions, 

*The  inconclusive  nature  of  an  admission  was  distinctly 
-•  recognized  in  Ridgway  v.  Philip,  (n)  where  Parke,  B.,  said : 
"  It  frequently  happens  in  cases  where  the  liability  of  persons  as 
partners  comes  in  question,  that  juries  are  induced  to  give  too  much 
effect  to  slight  evidence  of  admissions.  An  admission  does  not  estop 
the  party  who  makes  it ;  he  is  still  at  liberty,  as  far  as  regards  his  own 
interest,  to  contradict  it  by  evidence."  In  that  case,  one  of  the  defend- 
ants was  allowed  to  explain  an  admission  made  by  him  to  the  effect 
that  he  was  in  partnership  with  the  others,  (o)  So,  where  the  freighters 
of  a  ship  addressed  a  letter  to  the  captain  instructing  him  on  his 
arrival  at  the  Cape  to  call  upon  their  managing  partner,  Mr.  AV.  G. 
Anderson,  it  was  held  competent  to  the  freighters  to  show  that  Mr. 
Anderson  was  not  a  partner  of  theirs.  ( p) 

Even  where  a  person  has  executed  a  deed  describing  him  as  a  part- 
ner, the  admission  is  not  necessarily  conclusive  against  him.  (g) 

An  admission  by  one  person  that  he  and  another  are  partners,  may 
be  open  to  the  explanation  that  they  are  partners  to  some  limited  ex- 
tent, or  with  respect  to  some  particular  transaction,  but  not  to  the  ex- 
tent or  with  resj)ect  to  the  business  necessary  to  sustain  the  case  made 
against  him.  (/•)  12 

(n)  1  Cr.,  M.  &  R.  415.  12.    Admissions. — The    separate    ad- 

(o)  See,  too,  Newton  v.  Belcher,  12  Q.  mission  of  each   member  of  an    alleged 

B.  921;  Newton  v.  Liddiard,  Id.  92-5,  as  partnership  is  competent  evidence  against 

to  the  admissions  made  by  promoters  of  him,  but  not  against  the  other  supposed 

companies  as  to  tlieir  liabilities.  members,  to  prove  the  partnership.     Cur- 

(p)  Brockbank  v.  Anderson,  7  Man.  &  rier  v.  Silloway,  1  Allen  (Mass.)  19;  Gor- 

G.  29-5.     The  real  question  was  whetlier  don  v.  Bankard,  37  111.  147 ;  Drennen  v. 

Anderson  was  an  intere.sted  witness,  wiiich  House,  41  Pa.  St.  30  ;  King  v.  Barbour,  70 

he  would  have  been  had  he  been  a  part-  Ind.  3-5.     See,  also,  Filley  v.  McHenry,  71 

ner.     See  Mant  v.  Mainwaring,  8  Taunt.  Mo.  417;    Brown  v.  Rains,  53  Iowa  81; 

139;  Brown  v.  Brown,  4  Id.  752.  Fick  v.  MulhoUand,  48  Wis.  413  ;  Flour- 

(>])   See    Radcliffe    v.    Rushworth,    33  noy  v.  Williams,  68  Ga.  707.    Thus,  where 

Beav.  485  ;  Emp.son's  Case,  9  Eq.  597.  three   partners    are   sued,    one   of  whom 

(r)  See  Ridgway  v.  Philip,  1  Cr.,  M.  &  pleads,  the  plaintiff  cannot  give  the  decla- 

R.  415,  and  De  Berkora  v.  Smith,  1  Esp.  29.  rations  of  the  others  to  prove  the  partner- 

116 


€HAP.  IV.]  EVIDENCE    OF    PARTNERSHIP.  88* 

Retrospective  articles,  &c. — Again,  persons  may  agree  that  as  between 
themselves,  the  partnership  between  them  shall  be  deemed  to  have 
commenced  at  some  time  before  its  actual  commencement.     Proof  of 


ship.     Nelson  v.  Lloyd,  9  Watts  (Pa.)  22 ; 
Sherman  v.  Kelton,  2  R.  I.  532. 

But  it  is  lield  tliat  the  successive  acts 
and  declarations  of  each  of  several  de- 
fendants, sho.wing  their  partnership,  are 
equivalent  to  a  joint  declaration  to  that 
effect  by  all,  and  may  be  given  in  evi- 
dence. Hiiughey  v.  Strickler,  2  Watts  & 
S.  (Pa.)  411  ;  Welsh  v.  Speakman,  8  Id. 
257. 

The  true  rule  is  that  the  declarations 
of  one  of  several  alleged  partners  cannot 
be  given  in  evidence  to  prove  a  partner- 
ship, except  as  against  the  party  making 
them  (M'Pherson  v.  Rathbone,  7  Wend. 
(N.  Y.)  216;  Yancey  v.  Mariott,  1  Sneed 
(Tenn.)  28),  until  independent  proof  of 
the  partnership  has  been  made.  Cross  v. 
Langley,  50  Ala.  8;  Converse  v.  Sham- 
baugh,  4  Neb.  376.  And  such  declara- 
tions, if  made  at  the  time  the  debt  of 
plaintiff  was  contracted,  are  admissible  to 
prove  that  plaintiff  relied  on  the  exist- 
ence of  the  alleged  partnership.  Green- 
wood V.  Sias,  21  Hun  (N.  Y.)  .391. 

Where  the  question  before  the  jury  is 
whether  the  defendant  is  a  member  of  a 
certain  partnership,  it  is  proper  for  the 
court  to  exclude  the  declarations  of  the 
defendant  not  made  in  the  presence  of 
the  plaintiffs  or  their  agent.  Teller  v. 
Patten,  20  How.  (U.  S.)  125.  But  where 
the  pleadings  show  that  the  several  de- 
fendants were  jointly  employed  by  the 
plaintiff,  the  admission  of  one  of  the  de- 
fendants is  competent  to  charge  the  other 
defendants  as  his  copartners,  and  it  is  im- 
material whether  such  admission  is  made 
in  a  judicial  proceeding  or  otherwise. 
And  objection  to  such  evidence  on  the 
ground  of  want  of  previous  proof  of  part- 
nership is  removed  by  subsequent  testi- 
mony tending  to  prove  that  fact.  Fogerty 
■V.  Jordan,  2  Robt.  (N.  Y.)  319. 

1 


Upon  the  question  what  amounts  to 
such  an  admission  of  the  existence  of  a 
partnership  as  to  be  admissible,  it  has 
been  held  that  if  defendants,  sued  as  co- 
partners, introduce  in  evidence  a  receipt 
taken  by  them,  in  their  copartnership 
name,  of  the  plaintiffs,  this  is  an  admis- 
sion of  the  copartnership.  M'Farland  v. 
Lewis,  2  Scam.  (III.)  344. 

And  that  where  the  suit  is  on  an  account 
stated,  evidence  that  defendants  admitted 
that  they  were  partners  should  be  allowed 
to  go  to  the  jury,  even  though  not  specifi- 
cally confined  to  the  time  within  which 
the  account  accrued.  Sager  v.  Tupper,  38 
Mich.  258. 

On  the  other  hand,  it  has  been  decided 
that  an  inventory  filed  by  one  partner 
after  the  death  of  the  other,  which  imports 
to  contain  the  assets  of  the  firm,  is  no 
more  than  an  implied  admission  of  the 
partnership,  made  after  its  dissolution. 
Such  inventory  is  not  evidence  either  to 
prove  the  partnership  as  against  the  dece- 
dent, or  to  bind  the  partnership  creditors 
as  against  the  individual  creditors  of  the 
decedent.     Bond  v.  Nave,  62  Ind.  506. 

So,  also,  it  is  held  that  under  the  plea 
of  71071  est  factum,  involving  the  existence 
of  a  partnership,  the  declaration  of  the 
defendant  to  third  persons,  before  the  exe- 
cution of  the  instrument  in  question,  that 
no  partnership  existed,  is  not  evidence. 
What  the  defendant  said  when  the  note 
was  offered  to  him  for  payment  would  be 
evidence,  such  declaration  being  a  part  of 
the  res  gestae.  England  v.  Burt,  4  Humph. 
(Tenn.)  399. 

The  following  admissions  have  been  held 
admissible  and  sufficient  to  prove  partner- 
ship : 

An  admission  by  one  that  a  note  was 
signed  by  his  partner,  and  an  offer  to  pay 
it  if  the  holder  would  take  goods.    Thomas 

17 


8S*  EVIDENCE   OF  PARTNERSHIP.  [bOOK    I., 

such  an  agreement  as  this  would  not  enable  a  stranger  to  make  the 
parties  to  it  liable  to  him  as  partners  for  what  took  place  before  the 
partnership,  in  point  of  fact,  began.     As  to  third  parties,  such  an  agree- 

V.  Wolcott,  4  McLean  (U.  S.)  3G5.  had   been  started  on  the  same  road,  and 

The  unexplained  failure  of  one  sought  that  in   consequence  of  the  competition 

to  be  charged  as  a  partner  to  reply  to  a  the  charge  for  passengers  had  been  greatly 

letter  written  ai  the  time  of  a  sale  of  goods  reduced.     Held,  that  this  latter  evidence 

to  the  alleged  firm,  in  which  he  was  ad-  did  not  impair  the  weight  of  the  declara- 

dressed  as  a  partner.     Humes  v.  O' Bryan,  tions   last   made   by  defendant,   but    was 

74  Ala.  64.  irrelevant  and  was  rightly  rejected.     An- 

The  defendant's  acknowledgment  of  the  derson  v.  Snow,  9  Ala.  247. 
partnership  of  the  plaintiffs.  Bisel  v.  Where  A  and  B  were  sued  as  partners^ 
Hobbs,  6  Blackf.  (Ind.)  479.  A  was  defaulted,  and  B  pleaded  the  geu- 
Proof  of  frequent  admissions,  in  conver-  eral  issue.  Held,  that  letters  written  by 
sations,  of  the  existence  of  a  copartner-  A,  in  the  firm  name,  could  nol;  be  read  in 
ship,  supported  by  entries  in  books  kept  evidence  by  B,  to  show  that  he  was  not  a 
by  the  parties.  Wallace  v.  Berger,  14  partner  with  A,  but  that  the  letters  of  the 
Iowa  183.  plaintiff  were  good  evidence  to  show  that 
The  testimony  of  a  witness  that  he  has  he  did  not  consider  B  as  such  partner, 
paid  notes  to  the  firm,  in  which  were  the  Charaplin  v.  Tilley,  3  Day  (Conn.)  303. 
individual  names  of  the  members,  and  Where  A  subscribed  to  a  contract  of 
the  declarations  of  the  members  made  sale  the  name  of  a  firm,  of  which  he 
prior  to  the  institution  of  the  suit.  Woods  claimed  to  be  a  member,  and  B,  the  other 
V.  Quarles,  10  Mo.  170.  partner,  afterwards  ratified  the  act,  by  re- 
The  admission  of  a  party  that  "he  was  ceiving  the  purchase  money,  &c.  Held^ 
one  of  the  proprietors  of  the  firm  of  that  this  confirmation  of  B  being  estab- 
Adams  &  Co.'s  Express,"  and  that  the  lished,  A's  declarations  as  to  the  partner- 
signature  of  a  receipt  was  that  of  one  of  ship,  made  when  the  contract  was  execu- 
their  clerks.  Fenn  v.  Timpson,  4  E.  D.  ted,  may  be  given  in  evidence.  Drum- 
Smith  (N.  Y.)  276.  right  v.  Philpot,  16  Ga.  424. 

The  following   have   been   held   inadmis-        A  told  B  that  he  was  in  partnership  with 
sible :  C,  and  B  so  informed  C,  who  did  not  re- 
Admissions  by  one  partner,  after  disso-  ply.     Held,  suflicient  proof  that  A  and  C 
lution,  not  made  in  the  winding  up,  or  in  were  partners.     Slade  v.  Paschal,  67  Ga. 
relation   to   the   dissolution.     Nichols   v.  541. 

White,  85  N.  Y.  551.  In  an  action  against  V.  and  B.  upon  a 
A  letter  of  one  partner,  admitting  the  note  signed  "  V.  &  Co.,"  the  testimony  of 
existence  of  the  partnership.  Porter  v.  a  witness  that  he  presented  the  note  for 
Wilson,  13  Pa.  St.  641.  payment  to  B.,  who  stated  that  the  de- 
Instances  and  illustrations. — Plain-  mand  was  just  and  that  he  would  pay  it 
tiff  sought  to  charge  a  defendant  as  a  in  a  short  time,  is  sufficient  evidence  for 
partner  in  a  stage-line,  by  evidence  of  the  court  to  infer  that  B.  was  a  partner  of 
his  declarations  at  different  periods,  the  V.  Vance  v.  Funk,  2  Scam.  (111.)  263. 
earliest  declarations  admitting  the  part-  Two  persons  purchased  a  mill  and 
nership,  and  tiie  later  ones  denying  it.  house,  which  they  commenced  to  remove. 
Plaintiff  also  offered  to  show  that  at  the  but,  before  the  removal  was  completed, 
time  of  defendant's  denial,  another  line  one  of  them  died.     Held,  that  the  general 

118 


CHAP. 


IV.] 


EVIDENCE   OF    PARTXERSHIP. 


89* 


ment  is  res  inter  alios  acta,  which  does  not  affect  them  iu  any  way  ;  (s) 

and  it  is  obvious  that  an  admission  of  *the  existence  of  a    ^ 

r*89 
partnership  might  be  explained  as  true  only  iu  this  limited    '- 

sense,  in  which  case  the  admission  might  be  worth  nothing. 

Usual  evidence  of  partnership. — The  following  is  the  kind  of  evi- 
dence usually  had  recourse  to  for  the  purpose  of  proving  the  existence 
of  an  alleged  partnership  or  quasi  partnership : 

Agreements  in  writing  and  deeds  showing  the  right  to  share  profits.  If  the  signa- 
ture to  a  deed  is  proved,  its  due  execution  is  inferred.  (<)  To  prove  who  constituted 
a  firm  of  A  &  Co.,  the  attorney  of  B  &  Co.  cannot  be  compelled  to  produce  an  agree- 
ment made  between  A  &  Co.  and  B  &  Co.,  if  he  objects  on  the  ground  of  professional 
confidence,  (u)  ^' 

Admissions,  (x)  as  to  which,  see  ante  pp.  *87,  ^SS. 


declarations  of  the  deceased  that  the  two 
had  bought  the  mill  in  partnership,  no 
terms  of  partnership  being  stated,  were 
not  sufficient  evidence  of  a  partnership,  as 
such  declarations  might  well  consist  with 
the  existence  of  no  more  than  a  tenancy 
in  common.    Gregory  v.  Martin,  78  III.  38. 

Plaintiffs  advised  defendants  of  a  pur- 
chase made  by  one  A,  claiming  to  be 
a  partner  in  their  firm.  Defendants 
answered,  promising  to  settle  plaintiff's 
account,  saying,  "  We  will  make  the 
arrangement,  &c.  We  thought  it  settled 
before,  as  we  sent  the  money  by  A  last  win- 
ter," &c.  Held,  that  these  admissions,  as 
tending  to  show  a  partnership,  were  suf- 
ficient to  entitle  the  plaintiffs  to  recover. 
Cleghorn  v.  Johnson,  11  Iowa  292. 

Where,  on  a  trial  involving  the  ques- 
tio-n  whether  A  was  the  partner  of  B,  it 
appeared  that  on  one  occasion  A  was 
asked  whether  he  was  "  in  company  in 
the  store  with  B,"  and  answered  "  Yes ;" 
and  the  jury  returned  a  verdict  negativ- 
ing the  fact  of  a  partnership,  the  court  set 
aside  the  verdict,  and  granted  a  new  trial. 
Palmer  v.  Pinkham,  33  Me.  32. 

Although  the  bare  declarations  of  B 
and  C  that  A  was  their  partner  are  in- 
sufficient to  charge  him,  their  acknowledg- 


ments that  articles  of  copartnership  ex- 
isted between  them  and  A,  which  they 
refused  to  produce  upon  the  trial,  after 
due  notice,  were  held  evidence  from  which 
a  jury  might  reasonably  infer  that,  if  pro- 
duced, they  would  have  shown  the  fact  of 
a  partnership.  Whitney  v.  Sterling,  14 
Johns.  (N.  Y.)  215. 

(s)  Wilsford  v.  Wood,  1  Esp.  182; 
Vere  v.  Ashby,  10  Barn.  &  C.  288.  The 
subject  will  be  more  fully  examined  in 
book  II.,  eh.  2, 1  3. 

(<)  Grellier  v.  Neale,  1  Peake  198. 

(w)  Harris  v.  Hill,  DowJ.  &  R.  N.  P. 
Cas.  17. 

13.  A  mortgage  deed  of  a  partnership, 
relating  to  partnership  business,  executed 
by  one  of  the  firm,  in  the  firm  name,  is 
evidence  competent  to  be  given  to  prove 
the  existence  of  the  partnership,  though 
the  deed  was  for  a  purpose  foreign  to  the 
particular  transaction  or  contract  in  the 
suit,  where  such  evidence  is  sought  to  be 
introduced.  Crowell  v.  Western  Reserve 
Bank,  3  Ohio  St.  406.  See,  also,  Thomas 
V.  Moore,  71  Pa.  St.  1,93. 

[x)  Sangster  v.  Mazarredo,  1  Stark.  161 ; 
Harvey  v.  Kay,  9  Barn.  &  C.  356 ;  Ralph 
V.  Harvey,  1  Q.  B.  845 ;  Clay  v.  Langslow, 
1  Moo.  &  M.  45, 


119 


89^ 


EVIDENCE   OF    PARTNERSHIP. 


[book 


Advertisements,  prospectuses,  &c.,  containing  the  names  of  tlie  alleged  partners,  (3/) 
and  names  over  doors,  (z)  and  on  carts,  (a)  ^  * 

A7iswers  in  chancery  containing  admissions,  (i) 

Bills   to   customers,  J 

Circulars,  V  containing  the  names  of  tlie  alleged  partners,  (c)  ^® 

Invoices,  ) 

Bills  of  exchange.  The  mode  in  which  these  have  been  drawn,  accepted  or  en- 
dorsed has  frequently  been  relied  on  with  success,  (d)^^ 


(y)  Lake  v.  Argyll,  G  Q.  B.  477  ;  Bourne 
I'.  Freeth,  9  Barn.  &  C.  632 ;  Maudslay  v.  Le 
Blanc,  2  Car.  &  P.  409,  note ;  Reynell  v. 
Lewis,  15  Mees.  &  W.  517 ;  Wood  v.  Argyll, 
6  Man.  &  G.  928.  In  Ex  parte  Matthews, 
3  Ves.  &  B.  125,  an  advertisement  of  dis- 
solution was  relied  on. 

(z)  Williams  v.  Keats,  2  Stark.  290. 
See,  too,  Pott  V.  Eyton,  3  C.  B.  32,  aiile 
p.  *30. 

(a)  Stables  v.  Eley,  1  Car.  &  P.  614,  as 
to  which,  see  ante  p.  *47. 

14.  The  following  advertisement  shows 
a  partnership:  "People's  Bank  Stock- 
holders ;  *  *  *  every  stockholder  in- 
dividually responsible  for  all  liabilities." 
Uhl  V.  Harvey,  78  Ind.  26. 

So,  also,  a  subscription  to  the  stock  of  a 
company  in  the  partnership  name  may  be 
given  in  evidence.  Allen  v.  Kostain,  11 
Serg.  &  E.  (Pa.)  362. 

But  an  instruction  to  the  jury  that  the 
presumption  of  a  partnership  from  the  use 
of  a  name  such  as  is  commonly  used  where 
a  partnership  exists,  is  slight  and  easily 
rebutted,  affords  no  ground  of  exception. 
Charman  v.  Henshaw,  15  Gray  (Mass.) 
293. 

The  fact  that  printed  hand-bills,  with  the 
name  of  the  firm  signed  thereto,  were  posted 
at  various  places  in  the  town  where  de- 
fendant resided,  and  that  one  of  them  was 
posted  on  the  door  of  the  house  where  he 
boarded,  is  competent  to  be  submitted  to 
the  jury.  Tomlin  v.  Goldsmith,  40  Ga. 
221.  See,  also,  Barcroft  v.  Haworth,  29 
Iowa  462. 

(6)  Studdy  v.  Saunders,  2  Dowl.  &  R. 
347  ;  Grant  v.  Jackson,  1  Peake  268. 

(c)  Young   V.   Axtell,   2   H.   Bl.   242; 


Norton  v.  Seymour,  3  C.  B.  792. 

15.  It  is  competent  to  show  how  the  sup- 
posed firm  made  out  their  accounts,  kept 
their  books,  and  even  marked  boxes  of 
merchandise ;  but  to  make  such  proof 
available  it  must  be  shown  that  the  party 
against  whom  it  is  offered  had  some 
agency  in  these  acts,  or  impliedly  or  ex- 
pressly sanctioned  or  approved  them.  Mc- 
Neill V.  Reynolds,  9  Ala.  313.  But  when 
the  partnership  of  D.  and  M.  was  the  ques- 
tion in  issue,  it  was  held  that  bills  of  gooda 
made  out  against  D.  alone,  and  found  in 
a  drawer  in  the  room  where  the  business 
was  carried  on,  were  inadmissible  on  be- 
half of  M.  to  prove  that  no  copartnership 
existed  between  them.  McNamara  v. 
Draft,  33  Iowa  385. 

In  Tliomas  v.  Moore  (71  Pa.  St.  193), 
where  B.  sold  part  of  a  coal  lease  with  the 
personal  property  to  M.,  who  constituted 
O.  his  attorney,  it  was  held  that  orders 
drawn  for  goods  by  B.  on  a  firm,  "  B.  & 
Co.,"  in  favor  of  the  plaintiffs,  accepted  by 
O.,  and  proof  that  goods  were  furnished 
accordingly,  were  evidence  of  partnership 
between  B.  and  M. 

(d)  Spencer  v.  Billing,  3  Camp.  310  ; 
Guidon  v.  Robson,  2  Id.  302 ;  Duncan  v. 
Hill,  2  Brod.  &  B.  682  ;  Guruey  v.  Evans, 
3  Hurlst.  &  N.  122. 

16.  Promissory  notes  executed  in  the 
firm  name,  to  parties  in  the  habit  of  deal- 
ing with  the  firm,  are  evidence  of  partner- 
ship. Cook  V.  Frederick,  77  Ind.  406.  In 
such  cases  the  burden  of  proof  is  thrown 
upon  the  other  partners  to  show  that  the 
note  was  given  in  a  matter  not  relating  to 
the  partnership  business,  and  that  with 
the  knowledge  of  the  payee.     Whitaker  1;. 


120 


■CHAP.  IV.]  EVIDENCE   OF    PARTNERSHIP.  *89-90* 

Drafts  of  agreements  which  have  been  acted  upon,  (e) 

Letters  and  memoranda  showing  an  intention  to  give  a  person  a  share  of  profits, 
coupled  with  evidence  that  such  intention  was  acted  on.  (/) 

^Meetings.     Attending  and  taking  part  in  them;(^)  requiring  them  to  be 

^^J  called.  (A) 

Payment  of  money  into  court.  When  in  an  action  against  two  persons,  as  partners, 
they  pay  money  into  court,  this  does  not  amount  to  an  admission  of  the  partnership 
alleged  to  exist  between  them,  but  only  of  a  joint  liability  to  the  extent  of  the 
amount  paid  in.  {i) 

Recitals  in  agreements,  {k) 

Registers.  These  do  not  affect  a  person  whose  name  is  in  them  unless  he  can  be 
proved  to  have  authorized  the  use  of  his  name,  (/)  or  unless  there  is  some  statute  ap- 
plicable to  the  case.  An  entry  in  custom-house  books  made  by  one  of  three  alleged 
partners,  to  the  effect  that  he  and  the  other  two  were  jointly  interested  in  certain 
goods,  though  conclusive  as  between  them  and  the  crown,  is  not  so  as  between  them 
and  other  persons.  (?n) 

Release  executed  by  all  the  alleged  partners,  {n) 

Verdict.  A  verdict  of  a  jury  finding  the  existence  of  a  partnership  upon  the  trial 
of  an  issue  directed  out  of  chancery,  was  held  by  Lord  Kenyon  conclusive  evidence 
against  the  partners  in  a  subsequent  action  brought  against  them  by  a  creditor,  (o) 

Use  of  property  by  several  jointly.  (  p) 

Witness.  A  witness  may  be  asked  not  only  who  compose  such  and  such  a  firm,  but 
also  whether  named  individuals  do  so.  [q)  To  prove  a  partnership  between  A,  in 
England,  and  B,  in  Spain,  it  has  been  held  not  enough  to  show  that  A  once  dwelt  in 
a  town  in  Spain,  and  that  B  resides  and  carries  on  business  there  under  the  name  of 
A,  B  &  Co.,  and  that  there  is  no  one  there  of  the  name  of  A.  (»') 

Brown,  16  Wend.  (N.  Y.)  505.     But  the        (i)  Charles  v.  Branker,  12  Mees.  &  W. 

mere  fact  that  two  persons  sign   a  note  743. 

jointly  is  no  evidence  of  a   partnership        [k)  Leiden  v.  Lawrence,  2  N.  R.  283. 
between   them.      Hopkins   v.    Smith,    11        {I)  Fox  v.  Clifton,  6  Bing.  776.     As  to 

Johns.  (N.  Y.)  161.  joint  stock  companies,  see  the  volume  on 

(e)  Worts  V.  Pern,  3  Bro.  P.  C.  558.  that  subject. 

(/)  Heyhoe  v.   Burge,   9   C.   B.   431;        (m)  Ellis  v.  Watson,  2  Stark.  453. 
Baxter  v.  West,  1  Drew.  &  S.  173,  where        {n)  Gibbons  v.  Wilcox,  2  Stark.  43. 
a  partnership  for  seven  years  was  proved        (o)   Whately  v.  Menheim,  2  Esp.  608. 

by  an  unsigned  memorandum  on  which  Qu.  if  this  can  be  supported?     See  Coll. 

the  parlies  had  acted.  on  Part.  532,  quoting  Mr.  Starkie's  com- 

{g)  Lake  v.  Argyll,  6  Q.   B.  477,  and  ments  on  the  case. 
Wood  V.  Argyll,  6  Man.  &  G.  928  ;  noticed        (  p)  Weaver,  v.  Prentice,    1    Esp.   369. 

ante  p.  *44.     See,  also,  Peel  v.  Thomas,  15  See,  as  to  co-owners  who  are  not  partners, 

C.  B.  714.  ante  pp.  *58,  et  seq. 

(h)  Tredwen  v.  Bourne,  6  Mees.  &  W.        (q)  Acerro  v.  Petroni,  1  Stark.  100. 
461.  (r)  Burgue  v.  De  Tastet,  3  Stark.  53. 

121 


91*  ILLEGAL    PARTNEUSHIPS.  [bOOK   I.^ 

*CHAPTER  V.  [*9l 


OF   ILLEGAL   PARTNERSHIPS. 


Section  I. — What  Partnerships  are  Illegal,  *91. 
Section  II.— Consequences  of  Illegality,  *102. 


Illegal  partnerships. — la  order  that  a  partnership  may  result  from 
a  contract,  such  contract  must  not  be  illegal.  This  gives  rise  to  twa 
questions  which  it  is  proposed  to  discuss  in  this  chapter,  viz. : 


.  What  partnerships  are  illegal. 

.  What  are  the  consequences  of  their  being  so. 


SECTION  I. — WHAT  PARTNERSHIPS  ARE  ILLEGAL. 

Illegality  never  presumed. — Illegality  is  never  presumed,  but  must 
always  be  proved  by  those  who  assert  its  existence ;  and,  in  order  to 
show  that  a  partnership  is  illegal,  it  is  necessary  to  establish  either 
that  the  object  of  the  partnership  is  one  the  attainment  of  which  ia 
contrary  to  law,  or  that,  the  object  being  legal,  its  attainment  is  sought 
in  a  manner  which  the  law  forbids.  But  proof  that  a  firm  has  been 
guilty  of  an  illegal  act  is  not  sufficient  to  bring  the  firm  within  the 
class  of  illegal  partnerships ;  for  if  this  were  enough,  every  partner- 
ship which  does  not  pay  its  debts,  or  which  commits  any  tort,  or  is 
guilty  of  culpable  negligence,  would  be  illegal,  which  is  obviously 
absurd,  (a)  Neither  does  it,  by  any  means,  follow  that  because  one 
or  more  clauses  in  a  contract  of  partnership  are  illegal  the  partnership 
is  itself  illegal.  (6)  1 

(a)    See    Armstrong    v.   Armstrong,   3  (6)  See  R.  v.  Stainer,  L.  R.,  1  Cr.  Cas. 

Myl.  &  K.  64,  65;  Sharp  v.  Taylor,  2  Ph.  Res.  230;  General  Co.  of  Land  Credit,  5 

818  ;  BreU  ?;.  Beckwith,  3  Jur.  (N.  S.)  31,  Ch.  363. 

M.  R ;  Longworth's  Executor's  Case,  1  De  1.  Validity  of  the  contract,  generally. 

Ct.,  F.  &  J.  17.    See  the  judgment  of  Lord  — There  is  nothing  in  the  nature  or  es- 

Campbell.  sence  of  a  partnership  which  confines  it 

122 


CHAP,  v.,  §  I.]  ILLEGAL    PARTNERSHIPS. 


92* 


•=92] 


*  Grounds  of  illegality.  Public  policy.— I.  A  partnership 
may  be  illegal  upon  the  general  ground  that  it  is  formed  for  a 
purpose  forbidden  by  the  current  notions  of  morality,  religion  or 
public  policy,  A  partnership,  for  example,  formed  for  the  purpose 
of  deriving  profits  from  the  sale  of  obscene  prints,  or  of  books  reviling 
or  ridiculing  the  established  religion,  or  for  the  procurement  of  mar- 
riages, or  of  public  offices  of  trust,  would  be  undoubtedly  illegal,  (c) 
In  the  time  of  Charles  II.,  it  seems  to  have  been  held  that  a  contract 
for  sharing  the  profits  derived  from  the  public  exhibition  of  a  human 
monster  was  illegal ;  {d)  but  the  writer  is  not  aware  of  any  modern 
case  to  the  same  effect,  and  the  decision  alluded  to  would  not  probably 
now  be  followed  upon  grounds  of  public  policy.  2 


to  ordinary  trade  and  commerce  or  to 
dealings  in  personal  property.  It  may 
exist  between  attorneys,  conveyancers, 
mechanics,  owners  of  stage-coaches,  arti- 
sans, or  farmers,  as  well  as  between  mer- 
chants an-d  bankers,  and  also  between 
dealers  and  speculators  in  real  estate, 
without  becoming  void  by  operation  of 
the  statute  of  frauds.  Chester  v.  Dick- 
inson, 45  How.  (N.  Y.)  Pr.  325. 

Partners  may  modify,  alter  or  dissolve 
their  contract,  as  between  themselves, 
either  in  whole  or  in  part,  provided  they 
do  not  violate  any  principle  of  law  or 
public  policy.  Solomon  v.  Solomon,  2 
Ga.  18. 

The  contract  between  them  may  be  usu- 
rious, and  yet  make  them  liable  as  pai  t- 
ners  to  third  persons.  Pierson  v.  Stein- 
myer,  4  Eich.  (S.  C  )  309. 

(c)  See  the  title,  "Illegal  Contracts," 
in  Chitty's  and  Pollock's  treatises  on  the 
"  Law  of  Contracts  ; "  and,  as  to  the  sale  of 
offices,  Sterry  v.  Clifton,  9  C.  B.  110  ;  and, 
as  to  associations  for  promulgating  irre- 
ligious opinions,  see  Pare  v.  Clegg,  29 
Beav.  589 ;  Thornton  v.  Howe,  8  Jur.  (N. 
S.)  663. 

(d)  See  Herring  v.  Walronnd,  2  Ch. 
Cas.  110.  The  thing  exhibited  was  a  pair 
of  female  children,  having  "two  heads, 
four  arms,  four  legs,  and  but  one  belly, 
where  their  two  bodies  were  conjoined." 

1 


2.  Partnership  contracts  opposed  to 
public  policy. — A  partnership  cannot  be 
lawfully  formed  to  carry  on  an  illegal  or 
fraudulent  scheme.  Sampson  v.  Shaw, 
101  Mass.  145;  Dunham  v.  Presby,  120 
Id.  285. 

Thus,  in  Louisiana  it  is  held  that  part- 
ners in  a  lease  of  the  penitentiary  can 
make  no  contract  for  the  use  or  hire  of 
the  negro  convicts,  except  in  the  employ- 
ments required  by  law.  Any  contract, 
express  or  implied,  for  any  other  use  is 
against  public  policy  and  cannot  be  en- 
forced. Pratt  V.  McHatton,  11  La.  Ann. 
260.  And  in  New  York  a  city  ordinance 
providing  that  every  proposal  for  munici- 
pal work  should  contain  the  names  of  alt 
persons  interested,  prohibiting  any  secret 
agreement  or  understanding  that  one  not 
named  should  become  interested  in  any  con- 
tract, it  was  held  that  a  secret  partnership 
between  two  persons  that  they  were  to  be 
equally  interested  in  the  contract  for  work 
obtained  by  one  of  them,  was  illegal, 
being  against  public  policy  and  contrary 
to  positive  law.  Kelly  v.  Devlin,  58  How. 
(N.  Y.)  Pr.  487. 

The  following  partnership  agreements  have 
been  held  not  to  be  void  as  contrary  to  public 
policy:  A  combination  between  several 
persons  engaged  in  furnishing  recruits  to 
the  army  not  to  furnish  them  for  less  than 
so  much,  without  the  consent  of  all,  and 

23 


92*  ILLEGAL    PARTNERSHIPS.  [bOOK    I., 

War. — Whilst  two  countries  are  at  war  it  is,  by  the  law  of  each 
country,  illegal  for  persons  resident  in  either  to  have  dealings  with 
persons  resident  in  the  other.  A  partnership,  therefore,  formed 
between  persons  resident  in  this  country  for  the  purpose  of  trading 
with  an  enemy's  country  is  illegal ;  and  a  fortiori  is  such  a  partner- 
shin  illeo-al  if  one  of  the  members  of  it  is  resident  in  that  country,  and 

.... 
is,  therefore,  an  alien  enemy,  (e)     But  a  partnership  in  this  country 

for  running  a  blockade  established  by  one  belligerent  nation  in  the 
ports  of  another  is  not  illegal ;  for,  subject  to  the  risk  of  capture,  a 
neutral  may  lawfully  trade  with  a  belligerent.  (/)  3 

Trading  under  an  assumed  name. — In  this  country  a  i^erson  may 
legally  carry  on  business  under  a  name  not  his  own ;  and  when  a  firm 
has  an  established  reputation,  and  one  of  its  members  dies,  it  is  not 
deemed  wrong  for  the  survivors  to  continue  the  business  under  the 
old  name,  although,  perhaps,  the  reputation  of  the  firm  may  have  been 
due  mainly,  if  not  entirely,  to  the  ability  and  integrity  of  *the  ^^ 
deceased  partner.  The  legal  view  of  such  conduct  is  in  accord- 
ance with  established  usage,  and  it  has  been  accordingly  held  not  to  be 
illegal  for  surviving  partners  to  continue  to  carry  on  business  under 
the  old  name,  (g)  4 

to  share  all  profits  and  losses  equally,  bin  v.  Holt,  2  Kay  &  J.  66  ;  Lewis  v.  Lang- 
Marsh  V.  Russell,  66  N.  Y.  288  ;  revers-  don,  7  Sim.  421 ;  and  compare  Thornbury 
ing  2  Lans.  310.  v.  Bevill,  1  You.  &  C.  Ch.  554. 

An  agreement  between  two  partners  4.  Survivor  continuing  use  of  firm 
that  all  earnings,  perquisites  and  sa'^ries  name. — A  entered  into  a  partnership  with 
received  by  eitlier  of  them  as  a  public  B,  dissolved  it,  formed  with  C  a  partner- 
officer  shall  be  immediately  turned  in  to  ship  under  the  name  of  "A  &  Co.,"  and 
the  funds  of  the  firm  as  firm  property,  died.  His  administrator  conveyed  to  B 
Thurston  v.  Fairman,  9  Hun  (N.  Y.j  584.    the  right  to  use  A's  name  in  his  business. 

(e)  See  Evans  v.  Richardson,  3  Mer.  Held,  that  the  administrator  and  B  might 
469.  join  in  a  bill  in  equity,  under  Mass  Gen. 

{/)  Ex  parte  Chavasse,  4  De  G.,  J.  &  Stat.,  ch.  56,  §  3,  to  restrain  C  from  con- 
S.  655 ;  The  Helen,  L.  R.  1  Ad.  &  Ecc.  1.    tinning  to  do  business  under  the  name  of 

3.  Effect  of  war.  —  A  partnership  A  &  Co.  Morse  v.  Hall,  109  Mass.  409. 
formed  for  the  purj)ose  of  running  the  See,  also,  Bowman  v.  Floyd,  3  Allen  (Mass.) 
blockade  of  the  insurrectionary  states  76,  where  the  same  court  held  that  a  re- 
during  the  civil  war  in  the  United  States  ceipt  given  by  executors  for  money  due  and 
was  held  not  to  be  illegal.  Wallis  v.  paid  to  the  estate  of  their  testator,  from 
Wheelock,  26  La.  Ann.  246.  See,  also,  liis  former  partners,  in  which  the  latter 
Leftwicli  V.  Clinton,  4  Lans.  (N.  Y.)  167 ;  are  mentioned  by  tlie  name  of  the  former 
De  Leon  v.  Trevino,  49  Tex.  89  ;  and  U.  partnership,  under  which  they  ronlinued 
S.  Dig.,  tit.  "War."  to  carry  on  business,  will  not  be  construed 

(g)  See  Bunn  v.  Guv,  4  East  190 ;  An-    as  a  written  consent  to  tiie  continued  iTse 

124 


CHAP,  v.,  §  I.] 


ILLEGAL    PARTNERSHIPS. 


93* 


Speaking  generally,  and  excluding  cases  specially  provided  for  by 
statute,  (/i)  a  partnership  is  not  illegal  simply  because  it  carries  on 
business  under  a  name  which  does  not  disclose  its  members,  e.  g.,  under 
such  a  name  as  "  The  City  Investment  and  Advance  Company."  (i) 
It  is  indeed  said  that  it  is  illegal  at  common  law  for  persons  not  incor- 
porated to  assume  to  act  as  if  they  were,  and  that  to  trade  mider  such 
a  name  as  the  above  is  assuming  to  act  as  a  corporation ;  but  even 
if  assuming  to  act  as  a  corporation  is  an  offence  at  common  law,  which 
is  very  doubtful,  (k)  the  offence  is  not  committed  by  trading  under  a 
name  which  is  by  usage  as  applicable  to  an  unincorporated  as  to  an 
incorporated  body,  (l)^ 


of  the  former  partner's  name  in  the  new 
business  and  firm,  if  it  was  executed  and 
delivered  merely  for  the  purpose  of  ex- 
hibiting the  settlement  of  the  claim. 

As  to  the  rights  of  the  successors  in 
business  of  a  dissolved  partnership  to  the 
use  of  the  old  firm  name,  trade-marks  and 
labels,  under  the  New  York  decisions, 
see  Hazard  v.  Caswell,  46  N.  Y.  Super.  Ct. 
559 ;  S.  C.,  57  How.  Pr.  1 ;  Lunt  v.  Lunt, 
8  Abb.  (N.  Y.)  N.  Cas.  76;  Lane  v.  Ar- 
nold, 13  Id.  73;  S.  C,  11  Daly  293; 
reversing  63  How.  Pr.  40 ;  Amstaedt  v. 
Blumenfeld,  N.  Y.  Dail.  Reg.,  June  17th, 
1884. 

{h)  See,  as  to  pawnbrokers,  infra. 

(i)  See  Maughan  v.  Sharpe,  17  C.  B.  (N. 
S.)  443 ;  Garrard  v.  Hardey,  5  Man.  &  G. 
471;  Ex  parte  Grisewood,  4  De  G.  &  J. 
544. 

(k)  See  6  Man.  &  G.  107.  and  the  vol- 
ume on  Companies. 

{I)  See  the  cases  in  the  last  note  but 
one.  An  unincorporated  society  was  held 
to  have  no  right  to  be  provisionally  regis- 
tered under  7  and  8  Vict.,  c.  110,  under  a 
name  which  necessarily  denoted  a  cor- 
poration, e.  g.,  the  Sea,  Fire,  &c..  Insur- 
ance Corporation.  R.  v.  Whitemarsh,  14 
Q.  B  803. 

5.  Using  false  or  fictitious  firm 
name. — The  provisions  of  the  New  York 
act  of  1833  (Laws  of  1833,  ch.  281)  in  ref- 
erence to  transacting  business  under  ficti- 

1 


tious  names,  which  prohibits  a  person 
from  transacting  business  in  the  name  of 
a  partner  not  interested  in  the  business, 
and  which  requires  that  where  "&  Co."  is 
used  it  shall  represent  an  actual  partner, 
does  not  apply  to  or  inelude  the  use  of  the 
real  name  of  an  actual  partner,  although 
such  a  partner  is  under  a  disability  at  the 
time.  Zimmerman  v.  Erhard,  83  N.  Y. 
74;  S.  C,  60  How.  Pr.  163.  Where, 
therefore,  a  firm  is  composed  of  a  hus- 
band and  wife,  the  latter  being  repre- 
sented by  the  "  ic  Co."  in  the  firm  name, 
in  the  absence  of  any  intention  to  impose 
upon  the  public  by  obtaining  undue 
credit,  and  conceding  that  a  married 
woman  cannot  be  a  partner  of  her  hus- 
band, this  is  not  a  violation  of  the  statute, 
lb. 

That  statute,  being  highly  penal,  must 
be  strictly  construed  ;  its  violation  by  the 
plaintiff"  in  an  action  against  carriers  for 
loss  of  goods  shipped  by  him  in  the  name 
of  a  dissolved  firm,  is  not  a  good  defence. 
Wood  I'.  Erie  Ry.  Co.,  72  N.  Y.  196; 
S.  C,  28  Am.  Rep.  125 ;  affirming  9  Hun 
648. 

But  it  has  been  heH  under  this  statute 
that  an  action  cannot  be  sustained  on  a 
contract  which  was  made  by  plaintiflT 
while  transacting  business  under  the  firm 
name,  including  the  words  "&  Co.,"  when 
the  addition  of  "&  Co."  did  not  represent 
an  actual  partner  (Swords  v.  Owen,  43  How. 

25 


93*  ILLEGAL    PARTNERSHIPS.  [bOOK    I., 

2.  Profits  of  crime. — A  partnership  is  illegal  if  formed  for  the  pur- 
pose of  deriving  profit  ftom  a  criminal  offence,  e.  g.,  from  smuggling, 
robbery,  theft,  &c.  {m)  A  curious  instance  of  partnership  between  two 
hio-hwaymen  is  said  to  have  come  before  the  courts  in  the  last  century, 
and  to  iiave  been  referred  to  by  Lord  Kenyon.  As  the  case  is  not  to 
be  found  in  the  reports,  an  abridged  note  of  it  is  given  below  ;  {n)  but 

(N.  Y.)  Pr.  176) ;  and  that  a  quad  part-  ing  Company."     LafFerty  v.  Wheeler,  11 

ner,  i.  e.,  one  who  is  liable  to  third  per-  Daly  (N.  Y.)  194. 

sons  as  a  partner,  is  a  partner  within  the        In  Louisiana  it  is  held  that  the  statute 

meaning  of  the  above  statute.    Greenwood  of  that  state  (Rev.  Stat.,  |?  2668,  2669). 

V.  Brink    1  Hun  (N.  Y.)  227;   S.  C,  3  preventing  the  use  of  the  name  of  a  per- 

Thomp.  &  C.  740.  son  not  interested  in  the  firm,  is  designed 

A<^ain,    it   has   been    held,    under   this  to  prohibit  the  obtaining  of  credit,  but 

same   statutory  provision,   that   the   fact  not  the  giving  of  it.     Kent  v.  Majoiner, 

that  plaintiflT,  in  an  action  for  violation  of  36  La.  Ann   259. 

a  contract  made  in  a'liother  state  to  be  In  California  the  failure  to  allege  corn- 
performed  here,  was  doing  business  in  pliance  with  Civil  Code,  §|  2466,  2468, 
such  other  state  under  a  fictitious  partner-  reqiliring  certain  partnerships  to  file  a 
ship  name,  is  no  defence  to  the  action,  certificate  giving  the  names  of  the  part- 
Stoddart  v.  Key,  62  How.  (N.  Y.)  Pr.  137.  ners,  under  penalty  of  legal  incapacity  to 
See,  also,  Ross  v.  Wigg,  34  Hun  (N.  Y.)  sue,  will  not  make  a  complaint  by  such 
192,  and  Ellison  v.  Smoller,  1  City  Ct.  partnership  demurrable;  non-compliance 
(N.  Y.)  Rep.  484,  in  which  last-cited  case  with  the  law  is  matter  of  defence.  Phil- 
a  local  court  holds  a  contrary  doctrine.  lips  v.  Goldtree,  13  Pac.  Rep.  313. 

The   bona  fide  holder  of   a   note   en-        (m)  See  Biggs   v.  Lawrence,  3   T.  R. 

dorsed  by  the  payee  under  a  false  firm  454,  and  Stewart  v.  Gibson,  7  CI.  &  F, 

name,  may  recover  on  such  note  against  707,  as  to  smuggling.     The  last  case  is 

both  maker  and  endorser  (distinguishing  instructive  on  account  of  the  care  taken 

O'Toole  V.  Garvin,  supra).     Bull's  Head  to  conceal   the  true  nature  of  the  illegal 

Bank  v.  McFeeters,  41   N.  Y.  Super.  Ct.  transactions. 

215.     See,  also,  Hegeman  v.  Hegeman,  8        {n)  Everet  v.  Williams  (2  Pothier  on 

Daly  (N.  Y.)  1.  Obligations,  by  Evans,  p.  3,  note  citing 

Again,  violation  of  the  statute  consti-  Europ.  Mag.,  1787,  vol.  2,  p.  360)  is  said 

tutes  no  defence  to  an  action  by  tlie  firm  to  have  been  a  suit  instituted  by  one  high- 

on  a  fidelity  bond  given  by  an  employee,  way  man  against  another  for  an  account 

in   which    the   individual    names  of   the  of  their  plunder.    The  bill  stated  that  the 

partners  are  given  as  well  as  the  fictitious  plaintiff  was  skilled  in  dealing  in  several 

firm   name.     Gay  v.    Seibold,   97  N.   Y.  commodities,  such  as  plate,  rings,  watches, 

472.  &c. ;  that  the  defendant  applied  to  him 

But  a  violation  of  the  statute  is  a  good  to  become  a  partner ;  that  they  entered 

defence  to  an  action  for  the  price  of  goods  into  partnership,  and  it  was  agreed  that 

sold  by  plaintiff  under  a  false  partnership  they  should  equally  provide  all  sorts  of 

name.     O'Toole  v.  Garvin,  1  Hun  (N.  Y.)  necessaries,  such  as  horses,  saddles,  bridles, 

92 ;  S.  C,  3  Thomp.  &  C.  118.  and  equally  bear  all  expenses  on  the  roads 

The  statute  has  no  application  to  the  and  at  inns,  taverns,  alehouses,  markets 

use  of  the  term  "Alderney  Manufactur-  and  fairs;  that  the  plaintiff  and  the  de- 

126 


■CHAP,  v.,  §  I.] 


ILLEGAL    PARTXERSHIPS. 


94* 


"94] 


there  *is  some  doubt  whether  it  actually  occurred.     Real  or 


fictitious,  it  is  a  good  illustratiow  of  an  illegal  partnership  of 
the  class  in  question,  (o) 

3.  Partnerships  illegal  by  special  statutes. — A  partnership  is  also 
illegal  if  formed  for  a  purpose  forbidden  by  statute,  although  inde- 
pendently of  the  statute  there  would  be  no  illegality.  At  one  time  a 
distinction  was  taken  between  mala  prohibita  and  mala  in  se,  but  this 
distinction  has  very  properly  long  ceased  to  be  recognized  as  of  any 
value  for  legal  purposes.  What  judicial  tribunals  have  to  regard  is 
the  law  they  are  called  on  to  administer,  and  what  is  forbidden  by 
that  law  is  illegal,  whether  it  is  also  forbidden  by  the  laws  of  morality 
and  religion  or  not.  ( p)  6 

Observations  on  such  acts. — Whether  a  partnership  is  illegal  by 
virtue  of  any  particular  statute  obviously  depends  upon  the  construc- 
tion of  the  statute  in  question.  With  reference,  however,  to  those 
statutes  which  prohibit  unqualified  persons  from  carrying  on  certain 


trades  *or  businesses,  it  may  be  observed  that  such  statutes 
are  not  infringed  by  an  unqualified  person  who  does  nothing 


[*95 


fendant  proceeded  jointly  in  the  said 
business  with  good  success  on  Hoiinslow 
Heath,  where  they  dealt  with  a  gentleman 
for  a  gold  watoh  ;  and  afterwards  the  de- 
fendant told  the  plaintiff  that  Finchley, 
in  the  county  of  Middlesex,  was  a  good 
and  convenient  place  to  deal  in,  and  that 
commodities  were  very  plenty  at  Finch- 
ley,  and  it  would  be  almost  all  clear  gain 
to  them  ;  that  they  went  accordingly,  and 
dealt  with  several  gentlemen  for  divers 
watches,  rings,  swords,  canes,  hats,  cloaks, 
horses,  bridles,  saddles,  and  other  things ; 
that  about  a  month  afterwards  the  defend- 
ant informed  the  plaintiff  that  there  was 
a  gentleman  at  Blackheath  who  had  a 
good  horse,  saddle,  bridle,  watch,  sword, 
cane  and  other  things  to  dispose  of  which 
he  believed  might  be  had  for  little  or  no 
money ;  that  they  accordingly  went  and 
met  with  the  said  gentleman,  and  after 
some  small  discourse  they  dealt  for  the 
said  horse,  &c. ;  that  the  plaintifTand  the 
defendant  continued  their  joint  dealings 
together  until  Michaelmas,  and  dealt  to- 


gether at  several  places,  viz. :  at  Bagshot, 
Salisbury,  Hampstead  and  elsewhere,  to 
the  amount  of  £2000  and  upwards.  The 
rest  of  the  bill  was  in  the  ordinary  form 
for  a  partnersliip  account.  The  bill  is 
said  to  have  been  dismissed,  with  costs  to 
be  paid  by  the  counsel  who  signed  it ; 
and  the  solicitors  for  the  plaintiff  were 
attached  and  fined  £50  apiece.  The  plain- 
tiff and  the  defendant  were,  it  is  said,  both 
hanged,  and  one  of  the  solicitors  for  the 
plaintiff  was  afterwards  transported.  See 
20  Eq.  280,  note. 

(o)  The  case  was  referred  to  by  Jessel, 
M.  R.,  in  11  Ch.  D.  195. 

( p)  See  Aubert  v.  Maze,  2  Bos.  &  P.  371. 

6.  In  New  Jersey,  under  a  statute  de- 
claring that  no  one  should  prosecute  bis 
suit  except  by  himself  or  by  a  licensed 
attorney -at-law,  it  was  held  that  one  could 
not  prosecute  by  two  or  more  attorneys  in 
partnership,  since  they  could  not  bring 
themselves  within  the  description  of  one 
licensed  attorney-at-luw.  Wilson  v.  Wilson, 
2Halst.  (N.J.)  791. 


127 


95*  ILLEGAL    PARTXERSPIIPS.  [bOOK    I.^ 

more  thau  share  the  profits  arising  from  those  trades  or  businesses,  if 
they  are  iu  fact  carried  on  by  persons  who  are  duly  qualified.  The 
unqualified  person  is  not  within  the  mischief  of  the  statutes  in  ques- 
tion, and  the  partnership  of  which  he  is  a  member  is  not  therefore 
illegal,  (ry) 

Prohibitory  and  penal  acts. — Again,  although  a  statute  may  in 
terms  apparently  prohibit  an  act  or  omission,  and  affix  a  penalty  in 
case  of  disobedience,  it  does  not  necessarily  follow  that  all  transactions 
to  which  the  penalty  attaches  are  illegal.  They  are  so  if  the  statute  i& 
really  prohibitory,  (r)  but  they  are  not  so  if  the  true  construction  of 
the  statute  is  that  the  penalty  is,  as  it  were,  the  price  of  a  license  for 
doing  what  the  statute  apparently  forbids,  (s)  Therefore  it  was  held, 
in  Brown  v.  Duncan,  (t)  that  a  firm  of  distillers  was  not  illegal, 
although  one  of  the  firm  carried  on  business  as  a  reiail  dealer  in 
spirits  within  two  miles  of  the  distillery  (contrary  to  4  Geo.  IV.,  c  94,. 
§§  132,  133),  and  was  not  registered  as  one  of  the  firm  in  the  excise 
books  (as  required  by  6  Geo.  IV.,  c.  81,  §  7).  It  may,  however,  be 
doubted  whether  the  statutes  iu  question  were  properly  construed  by 
the  court,  iu) 

The  most  important  instances  of  partnerships  rendered  illegal  by 
statute  are  as  follows  :  (a;) 

Attorneys  and  solicitors. — See  infra,  "  Solicitors." 

Bankers. — By  7  and  8  Vict.,  c.  32,  §  21,  (y)  all  bankers  are  required, 
on  the  1st  day  of  January,  in  every  year,  to  make  a  return  to  the 
stamp  office  of  their  names,  residences  and  occupations,  or  in  the  case 
of  a  company  or  partnership,  of  the  name,  residence  and  occupation 

^  of  every  member  of  the  *company  or  partnership,    and  in 

-^    default  a  penalty  of  £50  is  inflicted.     Upon  this  act  a  question 

(q)  See  Raynard   ;•.   Chase,  1  B'.irr.  2,  East  180. 
and  infra,  under   the  heads  of  "  Medical        (i)  10   Barn.  &  C.  93,  and  see  Smith  v. 

Practitioners,"  "  Solicitors."  Mawhood,  14  Mees.  &  W.  452. 

(r)  Melliss  v.  Shirley  Local  Board,  16        (w)  See  "  Pawnbrokers,"  infra. 
Q.  B.  D.  446  ;  Cope  v.  Rowlands,  2  Mees.        (x)  For  a  list  of  trades,  &c.,  regulated 

&  W.  149;  Bartlett  v.  Vinor,  Carth.  252  ;  by  statute,  see  Pollock  on  Contracts  (4th 

Taylor  i'.   The  Crowland  Gas  and   Coke  ed.),  Appendix  F,  note. 
Co.,  10  Ex.  293.  iy)  Sections  8  and  29  of  this  act  and 

(s)  Smith  V.  Mawhood,  14  Mees.  &  W.  parts  of  sections  9  and  23  are  repealed  by 

452 ;    Swan  i-.  The  Bank  of  Scotland,  2  37  and  38  Vict.,  c.  96. 
Mont.  &  A.  661 ;  Johnson  v.  Hudson,  11 

128 


CHAP,  v.,  §  I.]  BANKERS.  96* 

might  arise  as  to  the  legality  of  a  banking  partnership,  or  company, 
composed  in  part  of  members  whose  names  are  not  returned. 

By  two  statutes,  which  have  since  been  considerably  modified,  it  was 
made  unlawful  for  banking  firms  of  more  than  six  members  to  issue 
in  London,  or  within  sixty-five  miles  thereof,  notes  payable  on  demand 
or  within  six  months  after  date,  (z) 

Upon  these  statutes  it  was  held  that  a  banking  company  of  more 
than  six  persons,  associated  for  the  purpose  of  issuing  notes  payable  on 
demand  or  within  six  months  after  date,  was  not  illegal  unless  it  was 
proved  that  the  company  issued  such  notes  within  sixty-five  miles  of 
London,  (a)  Upon  a  similar  statute  relating  to  Ireland  (6)  it  was  held 
that  in  order  to  establish  the  illegality  of  a  banking  company  upon 
the  ground  that  its  houses  of  business  had  been,  from  the  time  of  the 
formation  of  the  company  until  the  commencement  of  the  suit,  and 
then  were,  at  places  in  Ireland  within  fifty  miles  of  Dublin,  it  was 
necessary  to  prove  the  existence  of  a  place  of  business  *within 
that  limit  for  the  whole  time  alleged.  (•)  The  statutes  in  ^ 
question,  moreover,  have  been  held  only  to  .  ifect  partnerships  formed 
for  the  purpose  of  carrying  on  the  busines  of  a  banker,  and  not  to 
interfere  with  the  issue  of  notes  by  firm  not  carrying  on  such 
business. 


(2)  39  and  40  Geo.  III.,  c.  28,  §  15  ;  7  of  more  than  six  persons  carrying  on  the 
Geo.  IV.,  c.  46.  See  further,  as  to  the  business  of  bankers  within  sixty-five  miles 
issue  of  notes,  9  Geo.  IV,  c.  23  ;  3  and  of  London.  In  other  words,  there  are 
4Wm.  IV.,  c.  83,  and  c.  98 ;  7  and  8  three  limits :  (1)  London  and  three  miles 
Vicl.,  c.  32 ;  Attorney-General  v.  Birk-  round,  in  which  the  Bank  of  England  has 
beck,  12  Q.  B.  D.  605;  Broughton  v.  an  exclusive  monopoly.  (2)  The  district 
Manchester  and  Salford  Waterworks  more  than  three  but  within  sixty-five 
Co.,  3  B.  &  A.  1 ;  Bank  of  England  v.  miles  of  London,  in  which  the  monopoly 
Anderson,  3  Bing.  N.  C.  589;  Bank  of  is  divided* between  the  Bank  of  England 
England  v.  Booth,  2  Keen  466 ;  and  on  and  banking  firms  of  less  than  six  mem- 
appeal.  Booth  V.  Bank  of  England,  6  Bing.  bers,  lawfully  issuing  notes  before  May, 
N.  C.  415 ;  and  7  CI.  &  F.  509.  The  1844.  (3)  The  district  more  than  sixty- 
joint  effect  of  the  above  enactments  seems  five  miles  from  London,  in  which  the 
to  be  that :  (1.)  The  Bank  of  England  can  monopoly  is  divided  between  the  Bank  of 
alone  issue,  in  London,  or  within  three  England  and  banking  firms  of  six  or  more 
miles  of  it,  notes  payable  to  bearer  on  de-  or  less  members,  lawfully  issuing  notes 
mand.     (2.)  Beyond  that  limit  such  notes  before  May,  1844. 

may  be  issued  by  bankers'  who  were  law-        (a)  Ransford  ti.Copeland,6  Ad.  &  E.482. 
fully    issuing    them    before    May,    1844,        (b)  6  Geo.  IV,  c.  42,  §  10. 
under  a  license;  but  by  no  other  bankers;        (c)  Hughes  v.  Thorpe,  5  Mees.  &  W. 

and  not,  therefore,  by  any  banking  firm  656. 

129  9 


97*  INSURERS.  ,        [book   I., 

Brohers. — The  statutes  imposing  penalties  upon  brokers,  who  acted 
as  such  in  the  city  of  London  without  being  duly  admitted  so  to  do 
by  the  mayor  and  aldermen,  have  been  repealed  by  47  Vict.,  c.  3. 
Although  unqualified  brokers  could  not  recover  their  commission,  {d) 
yet  they  could  recover  from  their  principals  money  paid  for  them  by 
their  directions  or  in  conformity  with  the  usages  of  the  share  market,  (e) 

Liability  to  penalties  under  the  repealed  statutes  did  itot  protect  a 
broker  from  answering  interrogatories  relating  to  his  dealings  and 
transactions  if  he  was  sued  in  respect  of  them  by  his  principal.  (/) 

Marine  insurers. — By  a  statute  now  repealed  it  was  made  lawful 
for  any  society  or  partnership  (except  the  two  corporations  mentioned 
in  the  act)  to  carry  on  the  business  of  maritime  insurance,  or  to  lend 
money  on  bottomry,  [g)  This  enactment  gave  rise  to  numerous  de- 
cisions, which  are  frequently  referred  to  as  illustrating  the  consequences 
resulting  from  an  illegal  contract  of  partnership ;  and  they  will  be 
noticed  hereafter  when  those  consequences  are  examined.  In  the 
pre-ent  place,  however,  it  is  not  necessary  to  do  more  than  collect  them 
in  a  note  for  facility  of  reference,  (h) 

The  Marine  Policy  Stamp  act,  30  Vict.,  c.  23,  prevents  marine  in- 

j^„  „-j  surances  being  effected  otherwise  than  by  written  policies  *duly 
stamped,  [i)  Consequently,  if  the  members  of  a  mutual  in- 
surance company  insure  each  other's  ships  without  any  policies,  the 
insured  has  no  remedy  against  the  insurers  in  case  of  a  loss,  (k) 

Medical  practitioners. — By  55  Geo.  III.,  c.  194,  §  14,  unqualified 
medical  men  are  prohibited  from  practicing  ;  and  by  the  Medical  act, 

(d)  Cope  V.  Rowlands,  2  Mees.  &  W.  M.  &  S.  751  ;  Aubert  v.  Maze,  2  Bos.  &  P. 
149.  37 1 ;  Watts  v.  Brooks,  3  Ves.  6 1 2 ;  Knowles 

(e)  Smith  v.  Lindo,  4  C.  B.  (N.  S.)  395,    v.  Haughton,  11  Id.  168. 

and  5  Id.  587  ;  Pidgeon  v.  Burslem,  3  Ex.        {i)  They  can  now  be  stamped  after  their 

465;  Jessopp  z).  Lutwyche,  10  Ex.  614.  execution  on  payment  of  a  penalty  (39 

(/■)  Green  i).  Weaver,  1  Sra.  404;  Eob-  Vict.,  c.  6,  |  2);  but  a  written  policy  is 

inson  v.  Kitchin,  8  De  G.,  M.  &  CJ.  88,  and  still  necessary. 
21  Beav.  365.  {k)  See  Edwards  v.  Aberayron  Mutual 

ig)  6  Geo.  I.,  c.  18,  repealed  by  5  Geo.  Soc,  1  Q.  B.  D.  563;  Ex  parte  Hargrove, 

IV.,  c.  114,  I  1,  as  to  insurances.  10  Ch.  542;  Fisher  v.  Liverpool  Marine 

(A)  The  following  are  the  decisions  on  Insur.   Co.,   L.  R.,  9  Q.  B.  418 ;    Smith's 

the  above  enactment :     Mitchell  v.  Cock-  Case,  4  Ch.  611;  Brett  v.  Beckwith,  3  Jur. 

burn,  2  H.  Bl.  379  ;   Booth  v.  Hodgson,  6  (N.  S.)  31 ;  Bromley  v.  Williams,  32  Beav. 

T.  R.  405  ;  Lees  v.  Smith,  7  Id.  338  ;  Har-  177.     With  these  cases  compare  Martin's 

rison  v.  Millar,  Id.  340,  note ;   Everth  v.  Case,  14  Eq.  148. 
Blackburne,  2  Stark.  66 ;  Ex  parte  Bell,  1 

130 


CHAP,  v.,  §  I.]  ILLEGAL   PARTNERSHIPS.  98* 

1858,  (/)  it  is  enacted  (section  32)  that  no  person  shall  be  entitled  to 
recover  any  charge  in  any  court  of  law  for  any  medical  or  surgical 
advice,  attendance  or  for  the  performance  of  any  operation,  or  for  any 
medicine  which  he  shall  have  both  prescribed  and  supplied,  unless  he 
shall  prove  upon  the  trial  that  he  is  registered  under  the  act.  By  the 
same  act  (section  40)  penalties  are  inflicted  on  all  persons  who  willfully 
and  falsely  pretend  to  be,  or  take  or  use  the  name  or  title  of,  a  pliysi- 
cian,  doctor  of  medicine,  licentiate  in  medicine  and  surgery,  bachelor 
of  medicine,  surgeon,  general  practitioner,  or  apot4iecary,  or  any  name, 
title,  addition  or  description  implying  that  he  is  registered  under  the 
act,  or  is  recognized  by  law  as  a  physician,  &c. 

Upon  the  above  acts  it  has  been  decided  that  agreements  contrary 
to  55  Geo.  III.  are  illegal  and  cannot  be  enforced,  (/n)  but  that  a  medical 
practitioner  may  maintain  an  action  for  attendances,  &c,,  although  not 
registered  when  they  took  place,  it  being  sufficient  that  he  should  be 
registered  at  the  time  of  trial ;  (ii)  and  there  is  nothing  illegal  in  one 
member  of 'a  firm  being  registered  in  one  character  and  another  in 
another ;  nor  in  their  respectively  attending  to  their  appropriate 
branches  of  the  profession  ;  nor  in  their  jointly  suing  in  respect  of  the 
services  rendered  by  each  in  his  own  branch. (o)  It  has  also  *been  [-^qq 
intimated  by  high  authority  that  if  only  one  member  of  a  firm  '- 
is  duly  registered,  the  requisitions  of  the  statute  are  complied  with  ;  (p) 
but  the  unregistered  partner  cannot  lawfully  act  as  a  physician,  sur- 
geon or  apothecary,  (q) 

Newspaper  proprietors. — By  44  and  45  Vict.,  c.  60,  §  8,  the  titles 
of  newspapers  aixl  the  names,  occupations  and  residences  of  their  pro- 
prietors are  required  to  be  registered  with  the  registrar  of  joint  stock 
companies,  and  penalties  are  payable  on  default. 

Patentees. — Prior  to  1852  a  patent  for  an  invention  contained  a  pro- 


{l)  21  and  22  Vict.,  c.  90.    As  to  chem-  and  as  to  pretending  to  be  a  legally  qnali- 

ists  and  druggists,  see  31  and  32  Vict.,  c.  fied  practitioner,  see  Pedgrift  j;.Chevallier, 

121,  and  Pharmaceutical  Soc.  v.  Lon.  Sup-  8  C.  B.  (N.  S.)  240  and  246  ;  Ellis  v.  Kel- 

ply  Assoc,  5  App.  Cas.  857.  ly,  6  Hurlst.  &  N.  222.    The  cases  decided 

[m)  Davies  v.  Makuna,  29  Ch.  D.  596.  upon  the  Apothecaries  acts,  55  Geo.  III., 

(n)  Turner  v.  Reynali,  14  C.  B.  (N.  S.)  c  104,  and  6  Geo.  IV.,  c.  133,  will  be  found 

328.  in  1  Chitty's  Statutes. 

(o)  lb.  {q)  Howarth  v.  Brearley,  19  Q.  B.  D. 

(p)  Per  Erie,  C.  J.,  lb.     Compare  the  303 ;  Davies  v.  Makuna,  29  Ch.  D.  596  ; 

cases  in  the  next  note.     See,  further,  De  Pharmaceutical  Soc.  i;.  Lon.  Supply  Assoc, 

la  Eosa  v.  Prieto,   16  C.  B.  (N.  S.)  578 ;  5  App.  Cas.  857. 

131 


99*  PAWNBROKERS.  [bOOK   I., 

viso  to  the  effect  that  the  patent  should  be  void  if  more  than  twelve  per- 
sons became  interested  in  it  as  partners,  (r)  But  now  there  is  no  limit 
placed  upon  the  number  of  persons  who  may  be  interested  in  a 
patented  invention. 

Pawnbrokers. — By  35  and  36  Vict.,  c.  93,  §  13,  every  pawnbroker 
is  required  to  have  his  name  legibly  printed  over  the  door  of  every 
shop  or  place  where  he  carries  on  his  business.  Under  the  previous 
act,  39  and  40  Geo.  III.,  c.  98,  an  agreement  to  carry  on  a  pawnbroking 
business  in  partnership  was  illegal  if  it  was  part  of  the  agreement 
that  the  names  of  some  of  the  partners  should  be  concealed,  or,  in 
other  words,  if  it  was  part  of  the  agreement  that  some  of  the  partners 
should  be  dormant,  (s)  Whether  these  decisions  apply  to  the  present 
act  is  open  to  some  doubt  (see  section  51),  but  they  probably  do.  It 
is  conceived,  however,  that  pawnbroking  may  be  legally  carried  on  by 
a  registered  company  if  the  name  of  the  company  is  properly 
painted  up. 

^Solicitors. — By  several  statutes,  it  has  long  been  unlawful 
•^  for  any  person,  not  duly  qualified,  to  act  by  himself  or  an- 
other as  a  solicitor,  or  to  suffer  his  name  to  be  made  use  of  upon  the 
account  or  for  the  profit  of  an  unqualified  person,  (i)  Upon  these 
statutes  questions  have  arisen  as  to  how  far  it  is  lawful  for  a  qualified 
solicitor  to  share  the  profits  of  his  business  with"  a  person  who  is  not 
qualified,  and  it  has  been  held  that  there  is  no  illegality  in  this  where 
the  non-qualified  person  does  not  share  the  profits  in  consideration  of 
his  acting  in  any  manner  as  a  solicitor,  (w)  For  example,  there  is 
nothing  illegal  in  an  agreement  that  a  surviving  partner  of  a  firm  of 
solicitors  shall  share  his  profits  with  the  widow  of  a  late  partner.(a;) 
But  an  agreement  for  a  partnership,  in  the  ordinary  sense  of  the 

(r)  Hiudmarch  on  Patents  66.  See  38  Vict.,  c.  68,  §  12.  See,  as  to  partner- 
Duvert'ier  v.  Fellowes,  5  Bing.  248,  and  ships  between  town  clerks  and  other  soil- 
on  app'eal,  10  Barn.  &  C.  826,  and  1  CI.  &  citors,  Hughes  v.  Statham,  4  Barn.  &  C. 
p  gg  187  ;  and  as  to  prosecutions  by  partners  of 

(s)  See  Lewis  ?j.  Armstrong,  3  Myl.  &  K.  clerks  of  the  peace,  see  5  and  6  Wm.  IV., 
53 ;  Armstrong  v.  Lewis,  2  Cromp.  &  M.  c.  76,  P^  102,  and  K.  v.  Fox,  1  El.  &  E.  729. 
274;  Gordon  I'.  Howden,  12C1.  &F.  237;  {u)  Scott  v.  Miller,  John.s.  220,  is  a 
Fraser  v.  Hill,  1  M'Queen  392.  Com-  strong  case  on  this  head, 
pare  Brown  v.  Duncan,  10  Barn.  &  C.  93,.  (x)  Chandler  v.  Chandler,  Jac.  225,  and 
where  one  of  a  firm  of  distillers  was  not  6  Madd.  141;  Sterrv  v.  Clifton,  9  C.  B. 
licensed  as  required  by  the  excise  laws.        110;  and  see  Aubin  v.  Holt,  2  Kay  &  J. 

(0  See  6  and  7  Vict.,  c.  73,  'i^^  2,  26,  32;  66.  See,  also,  supra,  "  Medical  Practi- 
23  and  24  Vict.,  c.  127,  ?  26,  and  37  and    tioners." 

132 


CHAP,  v.,  §  I.]  ILLEGAL    PARTNERSHIPS.  100* 

word,  between  a  person  duly  qualified  and  one  who  is  not,  is  clearly 
illegal,  (y)  and  if  the  agreement  is  in  writing  and  is  for  a  present  part- 
nership, parol  evidence  cannot  be  admitted  to  show  that  it  was  not  to 
take  effect  until  both  parties  were  qualified,  {z)  But  an  agreement 
between  a  solicitor  and  his  articled  clerk  that  the  latter,  when  a  soli- 
citor, shall  become  a  partner  with  the  former  and  share  his  profits 
retrospectively,  is  not  illegal. (a)  However,  the  statutes  cannot  be 
evaded  by  an  agreement  to  the  effect  that  the  unqualified  person  shall 
receive  a  share  of  the  profits  as  a  salary,  and  that  he  shall  not  be  a 
partner  with  the  other.  (6)  Nor  can  a  solicitor's  clerk,  unless  himself 
qualified,  act  as  a  solicitor  under  cover  of  his  *principars  r^-,^, 
name,  (c)  It  was,  however,  held  that  a  person  who  had  been 
duly  examined,  sworn  and  admitted,  but  who  had  not  taken  out  his 
annual  certificate,  was  not  unqualified  within  the  meaning  of  the  act 
of  Geo.  II. ;  (d)  and  since  the  act  6  and  7  Vict.,  c.  46,  it  has  been  held 
not  unlawful  for  a  qualified  solicitor  to  act,  upon  the  usual  agency 
terms,  as  the  solicitor  of  another  solicitor  who  has  not  taken  out  his 
certificate,  (e) 

It  is  illegal  for  two  persons,  one  qualified  and  the  other  unqualified, 
to  hold  themselves  out  as  partners,  and  to  put  both  their  names  to 
bills  of  costs  and  other  documents  in  which  their  names  ought  not  to 
appear,  unless  they  are  qualified  solicitors.  (/) 

Theatrical  representations. — By  several  statutes,  now  repealed,  [g)  it 
was  unlawful  to  act  any  play  for  gain  except  under  certain  restrictions. 
Partnerships,  therefore,  for  sharing  profits  to  be  derived  from  acting 
plays  otherwise  than  in  accordance  with  these  acts  were  illegal.  (A) 

Unincorporated  joint  stock  companies  with  transferable  shares. — The 
question  whether  unincorporated  companies  with  transferable  shares 
were  illegal  at  conniion  law  or  under  the  Bubble  act  of  1719  (6  Geo. 

iy)  Williams   v.    Jones,  5  Barn.  &  C.  (d)  Re  Hodgson,  3  Ad.  &  E.  224 ;  and 

108.     See  Scott  v.  Miller,  Johns.  220.  see  Hodgkinson  v.  Mayer,  6  Ad.  &  E.  194. 

(a)  Williams  v.  Jones,  5  Barn.  &  C.  108.  (e)  Ex  parte  Foley,  11  Beav.  456. 

(a)  Ex  parte  Joyce,  4  Ch.  D.  596.  (/)  Edmonson  v.  Davis,  4  Esp.  14. 

(6)  Tench  v.  Roberts,  6  Madd.  145  ;  Re  (g)  10  Geo.  II.,  c.  28  ;  25  Id.,  c.  36  (made 

Jackson,  1  Barn.  &  C.  270;  see,  too.  Re  perpetual  by  28  Id.,  c.  19)  ;  and  28  Geo. 

Clark,  3  Dowl.  &  R.  260;  Hopkinson  v.  III.,  c.  30  ;  repealed  by  6  and  7  Vict.,  c.  68. 

Smith,  1  Bing.  13.     Qucere  the  effect  on  As  to  what  is  a  theatre  within  this  act, 

these  cases  of  the  act  28  and  29  Vict.,  c.  see  Davys  v.  Douglas,  4  Hurlst.  &  N.  180. 

86,  ante  pp.  '*^35,  et  seq.  [h)  Ewing  v.  Osbaldiston,  2  Myl.  &  C. 

(c)  Hopkinson  v.  Smith,  1  Bing.  13  ;  Re  53  ;  De  Begnis  v.  Armistead,  10  Bing.  107. 
Palmer,  2  Ad.  &  E.  686. 


101*  UNREGISTERED    PARTNERSHIPS.  [bOOK    I., 

I.,  c.  18),  will  be  found  discussed  in  the  volume  on  Companies.     The 
question  lias  now  only  a  historical  interest. 

Unregistered  partnerships^  &c. — By  the  Companies  act,  1862,  §  4,  all 
banking  partnership's  of  more  than  ten  members,  and  all  other  part- 
nerships of  more  than  twenty  members,  formed  after  the  2d  of  No- 
vember, 1862,(i)  must  be  registered  under  that  act,  unless  formed  in 
pursuance  of  some  special  act,  charter  or  letters  patent,  or  for  working 
mines  in  the  stannaries;  and  any  partnership  required  to  be  registered, 
.  and  *not  registered,  is  illegal.  (A;)     This  subject  will  be  found 

"■^  more  fully  examined  in  the  volume  on  Companies. 


SECTION   II. — CONSEQUENCES   OF   ILLEGALITY. 

Consequences  of  illegality. — If  a  partnership  when  it  is  formed  will 
be  illegal,  any  contract  to  form  it  must  be  illegal  also.  Upon  this 
ground  it  was  held,  in  Duvergler  v.  Fellowes,  (l)  that  a  bond  for  the 
payment  of  money  upon  the  formation,  by  the  obligee,  of  an  illegal 
company  was  invalid ;  and  in  \yilliams  v.  Jones,  (m)  that  no  action 
lay  for  the  recovery  of  a  premium  agreed  to  be  paid  by  the  defendant 
on  being  taken  into  partnership  with  the  plaintiff,  and  which  partner- 
ship was  illegal. 

Enforcing  agreement. — ^An  agreement  for  an  illegal  partnership  will 
not  be  enforced  even  if  it  has  been  partly  performed.  Ewing  v. 
Osbaldiston  {n)  is  a  good  instance  of  this.  There  the  plaintiff  and 
the  defendant  agreed  to  become  partners  in  a  theatre.  The  plaintiff 
advanced  part  of  the  money,  and  the  defendant  applied  it  in  part  pay- 
ment for  a  lease  of  the  theatre.  The  lease  was  afterwards  assigned  to 
him  alone.     The  defendant  did  not  perform  his  part  of  the  agreement, 

(i)  See,  as  to  this,  Shaw  v.  Simmons,  12  though  overruled  by  Smith  v.  Anderson, 

Q.  B.  D.  117  ;  and,  as  to  what  associations  15  Ch.  D.  247,  on  the  necessity  of  registra- 

need  not  be  registered.  Smith  v.  Anderson,  tion,  would  have  been  rightly  decided  if 

15  Ch.  D.  247.  the  association  had  required  registration. 

{k)  Jennings  v.  Hammond,  9  Q.  B.  D.  (/)  5  Biqg.  248  ;  10  Barn.  &  C.  826 ;  and 

225;    Shaw   v.  Benson,  11  Id.    563;   Ex  1  CI.  &  F.  39. 

parte  Poppleton,  14  Q.  B.  D.  379 ;  Pad-  (m)  5  Barn.  &  C.  108. 

stow  Total  Loss   Assoc,  20  Ch.   D.  137.  (n)  2  Myl.  &  C.  53. 
Sykes   v.    Beadon,    11    Ch.    D.    170,    al- 

134 


CHAP,  v.,  §  II.]  CONSEQUENCES    OF    ILLEGALITY.  102* 

and  the  plaintiff  accordingly  filed  a  bill  against  him.  The  bill  prayed 
that  it  might  be  declared  that  the  plaintiiF  and  the  defendant  were 
partners  in  the  theatre  and  in  the  lease  thereof,  and  that  the  agreement 
made  between  the  plaintiff  and  the  defendant  might  be  performed,  and, 
if  necessary,  that  the  partnership  might  be  dissolved  and  the  usual 
accounts  taken.  The  agreement,  however,  was  illegal  by  10  Geo.  IL, 
c.  28,  and  the  bill  was  dismissed.  It  was  decided,  on  appeal,  that  the 
agreement  being  illegal,  it  was  impossible  for  the  court  to  decree  its 
specific  performance,  and  that  if  the  plaintiflF  sought  to  recover  back 
*the  money  he  had  paid,  he  could  not  do  so  in  that  suit  as  (even  r^-,  ,«<, 
if  he  had  a  lien  on  the  property  for  the  money  which  the 
court  denied)  the  bill  did  not  seek  to  enforce  such  lien. 

Aotions  by  an  illegal  partnership. — If  a  partnership  is  illegal,  its 
members  cannot  maintain  any  action  in  respect  of  any  transaction 
tainted  with  illegality.  For  example,  if  a  partnership  is  formed  for 
selling  smuggled  goocts,  it  cannot  recover  the  price  of  any  smuggled 
goods  which  it  may  have  sold,  (o)  So,  an  illegal  loan  society  cannot 
recover  money  it  has  lent,  {p)  But  an  illegal  partnership  can  prose- 
cute a  person  stealing  its  property.  (g)7 

Actions  against  an  illegal  partnership. — The  illegality  of  a  partner- 
ship affords  no  reason  why  it  should  not  be  sued.  It  cannot,  indeed, 
be  effectually  sued  by  any  person  who,  being  aware  of  all  the  facts, 
seeks  to  enforce  a  demand  arising  out  of  a  transaction  tainted  with  the 
illegality  which  affects  the  firm,  (r)  but  the  illegality  of  the  firm  does 
not  per  se  afford  any  answer  to  a  demand  against  it  arising  out  of  a 
transaction  to  which  it  is  a  party,  and  which  transaction  is  legal  in 
itself.  Unless  the  person  dealing  with  the  firm  is  partlceps  criminis, 
there  can  be  no  turpis  causa  to  bring  him  within  the  operation  of  the 
rule  ex  turpi  causa  non  oritur  actio,  and  he,  not  being  implicated  in 
any  illegal  act  himself,  cannot  be  prejudiced  by  the  fact  that  the  persons 
with  whom  he  has  been  dealing  are  illegally  associated  in  partnership,  (s) 

(o)  See  Biggs  v.  Lawrence,  3  T.  R.  454.  debts,  such  persons  cannot  maintain  an 

(p)  Shaw  V.  Benson,  11  Q.  B.  D.  563;  action   of  trespass,    quare  clausum  /regit, 

Jennings  v.  Hammond,  9  Id.  225.  jointly  against    a    person    who   forcibly 

(q)  See  R.  v.  Frankland,  Leigh  &    C.  enters  the  storehouse  and  seizes  the  goods. 

276  ;  9  Jur.  (N.  S.)  388  ;  32  L.  J.  M.  C.  69.  McPherson  v.  Pemberton,  1  Jones  (N.  C.) 

7.  Wiiere  persons  enter  into  a  copart-  L.  378. 

nersh-ip  with   the  fraudulent   purpose  of  (r)  Re  South  Wales  Atlantic  Steamship 

hindering  or  delaying  the  creditors  of  one  Co.,  2  Ch.  D.  7G3. 

of  the  parties  in  tiie  collection  of  their  (s)  See  the  judgment  of  Mellish,  L.  J., 

135 


103*  CONSEQUENCES    OF    ILLEGALITY.  [bOOK    I., 

So,  if  a  partnership  or  company  has  been  established  l)y  fraud,  and 
persons  have  been  induced  to  join  it  by  false  and  fraudulent  represen- 
tations, still  the  fraud  so  perpetrated  affords  no  answer  to  a  creditor 
of  the  firm,  (t)  unless  that  creditor  has  himself  been  party  to  the 
fraud,  {u)  Moreover,  where  a  company  has  been  established  by  fraud 
and  where  it  has  been  engaged  in  illegal  transactions,  the  innocent 
^  shareholders  *are  nevertheless  liable  amongst  themselves  to 

-'  contribute,  if  necessary,  to  the  payment  of  the  debts  of  the 
company ;  for  such  shareholders  are  not  so  in  delicto  as  to  preclude 
any  one  of  them  from  calling  on  the  others  to  share  the  losses  to  which 
he  and  they  are  liable,  (x) 

Actions  for  contribution,  &g. — The  most  important  consequence, 
however,  of  illegality  in  a  contract  of  partnership  is  that  the  members 
of  the  partnership  have  no  remedy  against  each  other  for  contribution 
or  apj)ortionment  in  respect  of  the  partnership  dealings  and  transac- 
tions. However  ungracious  and  morally  reprehensible  it  may  be  for 
a  person  who  has  been  engaged  with  another  in  various  dealings  and 
transactions  to  set  up  their  illegality  as  a  defence  to  a  claim  by  that 
other,  for  an  account  and  payment  of  his  share  of  the  profits  made 
thereby,  such  a  defence  must  be  allowed  to  prevail  in  a  court  of  justice. 
Were  it  not  so,  those  who — ex  hypothesi — have  been  guilty  of  a  breach 
of  the  law  would  obtain  the  aid  of  the  law  in  enforcing  demands  arising 
out  of  that  very  breach  ;  and  not  only  would  all  laws  be  infringed  with 
impunity,  but,  what  is  worse,  their  very  infringement  would  become  a 
ground  for  obtaining  relief  from  those  whose  business  it  is  to  enforce 
them.  For  these  reasons,  therefore,  and  not  from  any  greater  favor 
to  one  party  to  an  illegal  transaction  than  to  his  companions,  if  pro- 
ceedings are  instituted  by  one  member  of  an  illegal  partnership  against 
another  in  respect  of  the  partnership  transactions,  it  is  competent  to 
the  defendant  to  resist  the  proceedings  on  the  ground  of  illegality,  (y-) 
There  are,  indeed,  some  old  cases  in  which  this  deft^nce  was  not  allowed 
to  prevail ;  (2)  but  they  have  been  long  overruled,  (a)     Moreover,  if 

in  the  last  case,  and  Brett  v.  Beckwith,  3  (y)  See  Sykes  v.  Beadon,  11  Ch.  D.  170 ; 

Jur.  (N.  S.)  31,  M.  R.  Holman  v.  Johnson,  1  Cowp.  341  ;  Thoni- 

(<)  Henderson  v.  The  Royal  Brit.  Bank,  son  v.  Thomson,  7  Ves.  470  ;  Cousins  v. 

7  El.  &  B.  356.                    '  Smith,  13  Ves.  544. 

(«)  See  Batty  v.  M'Cundie,  3  Car.  &  P.  (2)  Dover  v.  Opey,  2  Eq.  Cas.  Ab.  7 ; 

203.  Watts  V.  Brooks,  3  Ves.  611. 

(x)  See   Longworth's   Executor's  Case,  (a)  See  the  cases  cited  infra. 
Johns.  465  ;  aflSrmed  1  De  G.,  F.  &  J.  17. 

136 


CHAP,  v.,  §  II.]  ILLEGAL   PARTNERSHIPS.  104*-105* 

the  illegality  is  brought  to  the  notice  of  the  court,  it  will,  of  its  own 
accord,  decline  to  interfere  between  the  parties,  although  there  may  be 
no  desire  on  their  part  to  urge  such  an  objection.  (6) 

Illegality  a  defence  at  law. — When  partnerships  of  marine  insurers 
were  illegal,  it  was  *held  that  if  one  member  of  a  firm  of  such  piQK 
insurers  paid  all  the  losses  sustained  by  the  firm,  he  could  not 
recover  any  part  of  the  moneys  paid  from  his  copartners ;  (c)  and  that 
if  the  premiums  were  received  by  one  only,  the  others  could  not  obtain 
their  shares  from  him.  [d)  So,  where  there  was  an  express  covenant 
to  pay  such  shares,  the  covenant  was  held  to  be  invalid  by  reason  of 
the  illegality  which  tainted  it ;  (e)  and  even  where  an  arbitrator  had 
awarded  what  was  to  be  paid  by  one  partner  to  the  other,  it  was  held 
that  the  award  could  not  be  enforced.  (/)  These  cases  are  of  undoubted 
authority,  and  are  always  referred  to  as  such,  although  the  particular 
ground  of  illegality  on  which  they  rested  no  longer  exists.  It  has, 
indeed,  been  held,  in  one  or  two  cases  of  illegal  partnership,  that  if 
one  partner  has  paid  losses  at  the  special  request  of  the  other,  who 
promised  to  pay  his  share  afterwards,  an  action  for  such  share  may  be 
sustained ;  {g)  but  these  cases  cannot  be  reconciled  with  others,  and 
must  be  taken  to  be  overruled.  In  De  Begnis  v.  Armistead,  Qi)  the 
plaintiff  and  the  defendant  entered  into  an  illegal  agreement  for  bring- 
ing out  an  opera  and  dividing  the  profits  arising  from  it.  By  the 
agreement,  the  plaintiff  was  to  pay  the  singers,  and  the  defendant  was 
to  provide  a  theatre  and  pay  the  dancers.  This  was  done ;  but,  instead 
of  profits,  there  were  losses,  and  on  the  whole  account  a  balance  was 
found  due  to  the  plaintiff.  A  bill  for  the  balance  was  given  by  the 
defendant,  and  it  was  proved  that  the  balance  was  made  up  of  diffei'ent 
sums  paid  by  the  plaintiff  at  the  defendant's  request.  It  was  never- 
theless held  that  the  original  agreement  being  illegal,  the  plaintiff 
could  not  recover  the  balance  in  question,  either  on  the  bill  or  the 
common  money  counts. 

Illegality  a  defence  to  an  aooount. — Nor  can  an  action  for  an  account 
be  sustained  by  one  member  of  an  illegal  partnership  against  another, 
in  respect  of  its  dealings  and  transactions,  {i)     Thus,  if  an  association  is 

(6)  Evans  v.  Eichardson,  3  Mer.  469.  Faikney  v.  Reynous,  4  Burr.  2070. 

(c)  Mitchell  v.  Cockburn,  2  H.  Bl.  380.        {h)  De  Begnis  v.  Armistead,  10  Bing. 

(d)  Booth  V.  Hodgson,  6  T.  R.  405.  107.     See  Fisher  v.  Bridges,  3  El.  &  B. 

(e)  Lees  v.  Smith,  7  T.  R.  338.  642,  reversing  S.  C,  2  Id.  118. 

(/)  Aubert  v.  Maze,  2  Bos.  &  P.  371.  {i)  Knowles  v  Haughton,  11  Ves.  168  ; 

{g)  See  Petrie  v.  Hannay,  3  T.  R.  418  ;    Armstrong  v.  Armstrong,  3  Myl.  &  K.  45  ', 

137 


106*  CONSEQUENCES    OF    ILLEGALITY.  [bOOK 


* 


106] 


illegal  by  reason  of  non-registration  under  the  Companies 


act,  1862,  an  action  cannot  be  sustained  by  its  members 
against  its  trustees  for  the  execution  of  their  trust,  nor  to  make  them 
responsible  for  losses  arising  from  breaches  of  trust,  (k)  8 

Concealed  illegality. — Moreover,  if  it  can  be  shown  that  the  pur- 
pose with  which  a  partnership  was  formed  was  illegal,  the  conse- 
quences of  illegality  will  follow,  however  skillfully  the  true  purpose 
may  have  been  concealed ;  [l)  and  parol  evidence  may  be  given  to  show 
the  existence  of  the  illegality,  however  formally  the  partnership  agree- 
ment may  have  been  drawn  up,  and  however  successful  the  parties 
may  have  been  in  making  that  agreement  legal  on  the  face  of  it.  (m) 

Illegality,  when  not  a  defence. — In  order,  however,  that  illegality 
may  be  a  defence,  it  must  affect  the  contract  on  which  the  plaintiff  is 
compelled  to  rely,  in  order  to  make  out  his  right  to  what  he  asks.     It 

Harvey  v.  ColleU,  15  Sim.  332.  reimburse  one  partner  from  the  estate  of 

(k)  Sykes  v.  Beadon,  11  Cli.  D.  170,  is  the  other  for  any  losses  suffered  or  debts 

an  authority  for  this  proposition,  although  contracted    in  the  business  of  gambling, 

overruled  on  another  ground,  ante  p.  *101.  nor  for  t-he  settlement  of  the  business  of 

8.  Accounting  between  partners  en-  the  partnership. 
gaged  in  illegal  business. — One  partner  On  the  other  hand,  in  Belcher  v.  Con- 
cannot  sue  the  other  for  an  account  of  ner  (1  So.  Car.  85),  it  was  held  that  the 
profits  made  in  Confederate  money  trans-  fact  that  the  partnership  was  for  the  pur- 
actions  ;  nor  can  the  complainant  sustain  chase  and  sale  of  slaves  will  not  prevent 
such  action  in  respect  of  profits  realized  one  partner  from  maintaining  a  bill  in 
on  dealings  of  a  lawful  character  if  the  equity  against  his  copartner  for  an  ac- 
latter  are  so  blended  with  Confederate  counting.  (See,  also,  McGunn  v.  Hanlin, 
money  transactions  that  it  is  impossible  to  29  Mich.  476.)  And  iu  Pfeiffer  v.  Malt- 
so  separate  them  as  to  give  effect  to  the  by  (38  Tex.  323),  the  fact  that  a  firm  sold 
legal  transactions  alone.  Zane  v.  Thomas,  some  wares  manufactured  by  them  to  the 
37  Tex.  157.  Confederate  States  was  held  not  to  defeat 

But  if,  in  a  suit  to  settle  the  partnership,  a  suit  by  one  of  the  firm  for  an  account, 

it  appears  that  a    part  of  a  partnership  So,  also,  after    a    partnership  contract 

business  was  legal  and  a  part  illegal,  the  confessedly  against  public  policy  has  been 

court    may  take  charge  of  that   portion  carried  out,   and    money  contributed    by 

which   is    legal,  and    appoint  a  receiver  one  of  the  partners  has  passed  into  other 

therefor.      Anderson  v.  Powell,  44  Iowa  forms,  a  partner,  in  whose  hands  the  pro- 

20.  fits  are,  cannot  refuse  to  account  for  and 

Thus,  in  Watson  v.  Fletcher  (7  Graft,  divide  them,  on  the  ground  of  the  illegal 

(Va.)  1),  where  it  appeared  in  evidence,  character  of  the  original  contract.    Brooks 

but  not   in   the    pleadings,  in   an  equity  v.  Martin,  2  Wall.  (U.  S.)  70. 

case,  that  the  partnership,  whose  accounts  (l)  Stewart  v.  Gibson,  7  01.  &  F.  707; 

were   to   be  settled   in  the  suit,  was  for  Armstrong  t>.  Armstrong,  3  Myl.  &  K.  53. 

gambling   purposes,    it  was  held    that   a  (m)  See  Collins   v.   Blantern,   2    Wils. 

court  of  equity  would  not  lend  its  aid  to  341,  and  1  Sm.  L.  Cas.,  and  the  notes  there. 

138 


CHAP,  v.,  §  II.]  ILLEGAL    PARTNERSHIPS.  106* 

by  no  means  follows,  from  the  circumstance  that  money  has  been 
obtained  in  breach  of  some  law,  that  therefore  whoever  is  in  posses- 
sion of  such  money  is  entitled  to  keep  it  in  his  own  pocket. 

Effect  of  illegality  on  the  7'ight  to  recover  back  subscriptions. — If 
money  is  paid  by  A  to  B  to  be  applied  by  him  for  some  illegal  pur- 
pose, it  is  competent  for  A  to  require  B  to  hand  back  the  money  if  he, 
B,  has  not  already  parted  with  it,(?i)  and  the  illegal  purpose  has  not 
been  carried  out.  (o)  Although,  therefore,  the  subscribers  to  an  illegal 
company  have  not  a  right  to  an  account  of  the  dealings  and  transactions 
of  that  company  and  of  the  profits  made  thereby,  they  have  a  right 
to  have  their  subscriptions  returned  ;fj})  and  ev^en  though  the  moneys 

subscribed  have  been  laid  out  in  the  purchase  of  land  *and   ^ 

[107 
other  things  for  the  purpose  of  the  company,  the  subscribers  ■=- 

are  entitled  to  have  that  land  and  those  things  reconverted  into  money, 
and  to  have  it  applied,  as  fkr  as  it  will  go,  in  payment  of  the  debts 
and  liabilities  of  the  concern,  and  then  in  repayment  of  the  subscrip- 
tions. In  such  cases,  no  illegal  contract  is  sought  to  be  enforced ;  on 
the  contrary,  the  continuance  of  what  is  illegal  is  sought  to  be  pre- 
vented, {q) 

Again,  Tenant  v.  Elliott,  (r)  and  other  cases,  decided  that  if  A  and 
B  are  parties  to  an  illegal  contract,  and  B,  in  pursuance  thereof,  pays 
money  to  C  for  A's  use,  A  can  recover  this  money  from,  C.  It  follows 
from  this  that  if  two  partners,  A  and  B,  enter  into  an  illegal  agree- 
ment with  C,  and,  in  pursuance  of  this  agreement,  C  pays  money  to 
D  for  the  use  of  A  and  B,  not  only  can  A  and  B  recover  tliis  money 
from  D,  but  if  he  pays  it  over  to  either  one  of  the  two  partners,  that 
one  must  account  to  the  other  for  his  share  of  it.  This  must  also  be 
the  case  if  C,  instead  of  paying  the  money  to  D,  pays  it  over  at  once 
to  A  or  B.  In  other  words,  it  follows  from  Tenant  v.  Elliott  and 
that  class  of  cases  that  if  an  illegal  act  has  been  performed  in  carry- 
ing on  the  business  of  a  legal  partnership,  and  gain  has  accrued  to  the 

(n)  See   Taylor   v.  Lendy,  9  East  49  ;  (q)  Sheppard  v.  Oxenford,  1  Kay  &  J. 

Varney  v.  Hickman,  5  C.  B.  271 ;  Diggle  491 ;  Butt  v.  Monteaux,  Id.  98.    See,  also, 

V.  Kiggs,  L.  R.,  2  Ex.  D.  422 ;  Hampden  Symes  v.  Hughes,  9  Eq.  475  ;  Taylor  v. 

V.   Walsh,   1   Q.   B.   D.   189 ;    Taylor  v.  Bowers,  1  Q.  B.  D.  291. 

Bowers,  Id.  291.  (r)  Tenant  v.  Elliott,   1   Bos.  &  P.  3  • 

(o)  See  Herman  v.  Jeuchner,  15  Q.  B.  Farmer  v.  Russell,  Id.  296  ;  Bousfield  v- 

D.  561.  Wilson,  16  Mees.  &  W.  185  ;  Nicholson  v. 

(p)  See  Harvey  v.  Collett,  15  Sim.  332-  Gooch,  5  El.  &  B.  999. 
Compare  the  cases  in  the  next  note. 

139 


107*  CONSEQUENCES    OF    ILLEGALITY.  [bOOK   I., 

partnership  from  such  act,  and  the  money  representing  that  gain  has 
been  actually  paid  to  one  of  the  partners  for  the  use  of  himself  and 
copartners,  he  cannot  set  up  the  illegality  of  the  act  from  which  the 
gain  accrued  as  an  answer  to  a  demand  by  them  for  tl>eir  share  of 
what  he  has  received.  Upon  this  principle,  it  was  held,  in  Sharp  v. 
Taylor,  (s)  that  a  partner  was  entitled  to  an  account  against  his  co- 
partner of  moneys  actually  come  to  the  hands  of  the  latter  from  the 
employment  of  a  ship  in  a  manner  not  permitted  by  the  navigation 
laws;  and,  in  Sheppard  v.  Oxenford, (i)  that  the  directors  of  an  illegal 
company  were  liable  to  account  *for  the  money  received  by 
-^  them  on  behalf  of  the  company  and  for  the  use  of  its  mem- 
bers. 

Illegality  set  up  by  executors. — An  executor  or  administrator  of  a 
deceased  partner  cannot  protect  himself  from  accounting  for  the  estate 
of  the  deceased  by  setting  up  against  his  creditors,  legatees  or  next  of 
kin  the  illegality  of  the  transactions  in  which  the  deceased  may  have 
been  concerned,  (u)  That  has  nothing  to  do  with  their  claims ;  and 
the  reasons  upon  which  the  maxim  "Ux  turpi  causa  non  oritur  actio" 
is  founded  evidently  have  no  application  to  such  a  case.  Even  if  the 
executor  was  one  of  the  deceased's  copartners,  and  was  thus  mixed  up 
with  him  in  the  illegal  transactions,  still,  if  the  share  of  the  deceased 
in  the  gains  arising  from  them  has  actually  been  placed  to  his  credit 
in  the  partnership  books,  and  has  come,  or  might  have  come  to  the 
hands  of  the  executor  as  such,  he  must  account  for  that  share,  [x] 
But  if  there  has  been  no  account  settled,  it  would  seem  that  the  ex- 
ecutor may,  in  his  character  of  partner,  rely  on  illegality,  and  decline 
to  come  to  any  account  'in  respect  of  the  gains  in  question,  (y) 

Illegal  trusts. — But,  notwithstanding  Tenant  v.  Elliott,  Sharp  v. 
Taylor,  and  other  cases  of  that  class,  illegal  trusts  will  not  be  enforced. 
Sykes  V.  Beadon,  (2)  already  referred  to,  is  a  clear  authority  for  this 
proposition.  Another  authority  is  Ottley  v.  Browne,  (a)  There  A, 
who  was  a  shareholder  with  B  and  others  in  two  companies,  wished  to 
become  a  banker ;  and  in  order  to  evade  a  statute  which  rendered  it 

(s)  2  Ph.  801,  recognized  in  Sheppard  (2)  See  Joy  y.  Campbell,  1  Sch.  &L.  328. 

V.  Oxenford,  1  Kay  &  J.  491.     Compare  (y)  See  Ottley  v.  Browne,  1  Ball  &  B. 

Sykes  v.  Beadon,  11  Ch.  D.  170.  360;  and  compare  Sharp  v.  Taylor,  2  Ph. 

(<)  1   Kay  &  J.  491.     See,  too,  Butt  v.  801. 

Monteaux,  Id.  98.  (2)  11  Ch.  D.  170,  ante  p.  *105. 

(m)  See  Joy  v.  Campbell,  1  Sch.  &  L.  (a)  1  Ball  &  B.  360;  and  see  £x  parte 

339  ;  Hale  v.  Hale,  4  Beav.  369.  Mather,  3  Ves.  373. 

140 


CHAP,  v.,  §  II.]  ILLEGAL   PARTNERSHIPS.  108*-109* 

illegal  for  a  banker  to  be  a  partner  in  commercial  undertakings,  (6)  A 
assigned  his  shares  to  B  in  trust  for  himself.  B,  who  carried  on  a 
separate  trade,  was  made  bankrupt,  and  his  assignees  sold  all  his  shares 
in  the  above  companies,  and  also  the  s-hares  held  by  him  in  trust  for 
A.  A  then  filed  a  bill  against  B's  assignees,  praying  that  they  might 
be  declared  trustees  of  these  last  shares  for  him,  A,  and  that  they  might 
'he  ordered  to  pay  the  value  *thereof  to  him,  or  that  he  might  r*|Qg 
be  at  liberty  to  prove  for  such  value  against  B's  estate ;  but 
the  bill  was  dismissed  with  costs,  on  the  ground  that  it  sought  to 
enforce  a  secret  trust,  which  was  directly  against  a  positive  law.  (c) 

Indietment. — Before  quitting  the  subject  of  the  consequences  of  the 
illegality  of  a  partnership,  the  risk  of  criminal  prosecution  ought  to  be 
mentioned.  Persons  engaged  in  an  illegal  business,  whether  partners 
or  not,  and  whether  incorporated  or  not,  are  liable  to  be  punished 
criminally ;  (d)  and  even  where  the  object  of  a  society  is  not  illegal, 
its  directors  and  managers  will  do  well  to  bear  in  mind  that  if  they 
willfully  violate  the  provisions  of  an  act  of  parliament,  they  are  guilty 
of  a  misdemeanor,  and  are  liable  to  be  indicted  accordingly,  (e) 

(6)  29  Geo.  IL,  c.  16  (Irish).  sell  on  Crimes,  and  Archbold's  Criminal 

(c)  The  same  principle  is  illustrated  by    Law. 
Thomson  v.  Thomson,  7  Ves.  470,  which,        (e)  See  Lord  Campbell's  observations^ 
however,  was  not  a  partnership  case.  in  Longworth's  Executor's  Case,  1  De  G.^ 

{d)  See  the  title  "  Conspiracy  "  in  Kus-    F.  &  J.  31. 

141 


110*         GENERAL  NATURE  OF  A  PARTNERSHIP.     [bOOK  I., 

*iiO]  ^CHAPTER  VI. 

OF  THE  GENERAL  NATURE  OF  A  PARTNERSHIP. 


Section  I. — Of  the  Mercantile  and  Legal  Notion  of  a  Firm. 
Section  II. — Consequences  of  the  Non-recognition  of  the  Firm  in 
the  Mercantile  Sense. 


SECTION    I. OF   THE    MERCANTILE   AND   THE    LEGAL    NOTION    OP 

A    FIRM. 

Mereantile  view  of  a  Jinn. — Partners  are  called  collectively  a  firm. 
Merchants  and  lawyers  have  different  notions  respecting  the  nature 
of  a  firm,  (a)  Commercial  men  and  accountants  are  apt  to  look  upon 
a  firm  in  the  light  in  which  lawyers  look  upon  a  corporation,  i.  e.,  as 
a  body  distinct  from  the  members  composing  it,  and  having  rights 
and  obligations  distinct  from  those  of  its  members.  Hence,  in  keep- 
ing partnership  accounts  the  firm  is  made  debtor  to  each  partner  for 
what  he  brings  into  the  common  stock,  and  each  partner  is  made 
debtor  to  the  firm  for  all  that  he  takes  out  of  that  stock.  In  the 
mercantile  view,  partners  are  never  indebted  to  each  other  in  respect 
of  partnership  transactions,  but  are  always  either  debtors  to  or  creditors 
of  the  firm. 

Owing  to  this  impersonification  of  the  firm,  there  is  a  tendency  to 
regard  its  rights  and  obligations  as  unaffected  by  the  introduction  of  a 
new  partner,  or  by  the  death  or  retirement  of  an  old  one.  Notwith- 
standing such  changes  among  its  members,  the  firm  is  considered 
as  continuing  the  same,  and  the  rights  and  obligations  of  the  old  firm 
are  reo;arded  as  continuins:  in  favor  of  or  ag-ainst  the  new  firm  as  if  no 

o  o  o 

changes  had  *occurred.     The  partners  are  the  agents  and  sure-  ^^ 
ties  of  the  firm — its  agents  for  the  transaction  of  its  business;  '- 

(a)  See,  on  this  subject,  Cory's  Treatise  paper  by  J.  M.  Ludlow,  Esq.,  "  On  the 
on  Accounts  (2d  ed.,  1839,  Pickering),  a  Mercantile  Notion  of  the  Firm,  and  the 
valuable  work,  but,  it  is  believed,  not  so  Need  of  its  Legal  Recognition,"  in  the  see- 
widely  known  as  it  should  be.     See,  too,  a  ond  volume  of  the  papers  read  before  the 

142 


€HAP.  YI.,  §  I.]       GENERAL    NATURE    OF    A    FIRM.  Ill* 

its  sureties  for  the  liquidation  of  its  liabilities  so  far  as  the  assets  of 
the  firm  are  insufficient  to  meet  them.  The  liabilities  of  the  firm  are 
regarded  as  the  liabilities  of  the  partners  only  in  case  they  cannot  be 
met  by  the  firm  and  discharged  out  of  its  assets. 

Legal  view  of  a  firm. — But  this  is  not  the  legal  notion  of  a  firm. 
The  firm  is  not  recognized  by  lawyers  as  distinct  from  the  members 
composing  it.  (6)  1  In  taking  partnership  accounts  and  in  administer- 
ing partnership  assets,  courts  have  to  some  ex^ent  adopted  the  mercan- 
tile view,  and  actions  may  now  be  brought  by  or  against  partners  in 
the  name  of  their  firms ;  (c)  but  speaking  generally,  the  firm  as  such 
has  no  legal  recognition.  The  law,  ignoring  the  firm,  looks  to  the  part- 
ners composing  it ;  and  any  change  amongst  them  destroys  the  identity 
of  the  firm.  What  is  called  the  property  of  the  firm  is  their  property, 
and  what  are  called  the  debts  and  liabilities  of  the  firm  are  their  debts 
and  their  liabilities.  In  point  of  law,  a  partner  may  be  the  debtor  or 
the  creditor  of  his  copartners,  but  he  cannot  be  either  debtor  or  cred- 
itor of  the  firm  of  which  he  is  himself  a  member.  (cZ) 

A  member  of  an  ordinary  partnership  fills  a  double  character ;  he 
is  both  a  principal  and  an  agent.  As  a  principal  he  is  bound  by  what 
he  does  himself  and  by  what  his  copartners  do  on  behalf  of  the  firm, 
provided  they  keep  within  the  limits  of  their  authority  ;  as  an  agent 
he  binds  them  by  what  he  does  for  the  firm,  provided  he  keeps  within 
the  limits  of  his  authority.  But  a  partner  is  not  the  surety  of  the 
firm.  Every  member  of  an  ordinary  partnership,  however  numerous 
the  partners  may  be,  is  liable  as  a  principal  to  have  his  private  prop- 
erty seized  for  a  partnership  debt,  whether  the  firm  has  assets  to  pay 
it  or  not ;  and  not  only  so,  but  the  property  of  the  firm  is  liable  to  be 
seized  for  the  private  debts  of  any  of  *the  partners  composing 
"^-'  it.  (e)     This  non-recognition  of  the  firm,  in  the  mercantile 

Juridical  Society,  p.  40.     To  both  of  these  not  require  that  the  firm  and  not  the  in- 

the  writer  desires  to  acknowledge  his  ob-  dividual  lueiubers  shall  be  taxed.     Lanier 

ligations.  v.  The  Mayor^  59  Ga.  187. 

(6)  Ex  parte  Gliddon,  13  Q.  B.  D.  43 ;  (c)  Rules  of  Sup.  Ct.,  Ord.  16,  rule  14 ; 

Hoare  v.  Oriental   Bank   Corporation,   2  Bank.  Act,  1883,  |    115,  and  Bank.  Rules, 

App.  Cas.  589,  illustrate  this  ;  and  see  per  1886,  rule  259. 

James,  L.  J.,  in  Ex  parte  Corbett,  14  Ch.  (d)  See  Lord  Cotteuhatu's  judgment  in 

D.  126.  Richardson  v.  The   Bank  of  England,  4 

1.  Each  member  of  a  firm  of  lawyers  Myl.  &0. 171, 172  ;  and  De  Tastet  t).  Shaw, 

may   be  taxed  separately,  under  an   au-  1  B.  &  A.  664. 

thority  to  tax  all  persons  exercising  any  (e)  See  "  Execution,"  in  book  II.,  ch.  3, 

profession ;  one  member  of  sucii  firm  can-  ?  4. 

143 


112*  GENERAL    NATURE   OF    A    PARTNERSHIP.  [bOOK    I., 

sense  of  the  word,  is  one  of  the  most  marked  differences  between  part- 
nerships and  incorporated  companies. 


SECTION    II. CONSEQUENCES    OP    THE    NON-RECOGNITION    OP    THE 

FIRM    IN   THE    MERCANTILE   SENSE. 

1.  Generally,  as  regards  its  name. 

Name  of  a  firm. — It  follows  from  the  foregoing  remarks  that  the 
name  under  which  a  firm  carries  on  business  is,  in  point  of  law,  a  con- 
ventional name,  applicable  only  to  the  persons  who,  on  each  particular 
occasion  when  the  name  is  used,  are  members  of  the  firm.  (/)  When 
a  firm  is  spoken  of  by  its  name  or  style,  evidence  is  admissible  to  show 
who  in  fact  constituted  the  firm  at  the  time  in  question  ;  (g)  and  if 
persons  trade  or  carry  on  business  under  a  name,  style  or  firm,  what- 
ever may  be  done  by  them  under  that  name  is  as  valid  as  if  real 
names  had  been  used.  This  is  seen  every  day  in  the  case  of  bills  of 
exchange  and  promissory  notes ;  and  even  in  the  case  of  more  formal^ 
instruments,  there  is  no  doubt  of  their  validity,  although  some  of  the 
executing  parties  may  be  described  as  A  &  Co.  {h)  So,  partners  may 
be  registered  as  shareholders  in  the  name  of  their  firm ;  (i)  and,  under 
the  Copyright  act,  5  and  6  Vict.,  c.  45,  *and  Engravings  act,  r^^-i^o 
8  Geo.  II.,  c.  13,  §  1,  it  is  sufficient  to  register  a  book  in  the 
name  of  the  firm,  [j]  or  to  print  the  name  of  the  firm  of  proprietors 
under  the  engravings,  (k)  2 

(/)  A  firm  is  usually  described  in  legal  ment  for  a  lease  ;  Moller  v.  Lambert,  2 

proceedings  as  certain  persons  trading  or  Camp.  548,  a  bond  ;  Gorrie  v.  Woodley, 

carrying  on  business  under  and  using  the  17  Ir.  C.  L.  221,  a  guarantee ;  Latouche 

name,  style  and  firm  of,  &c.     As  to  the  v.  Waley,  Hayes  &  J.  Ir.  Ex.  43.     Rovr 

sufficiency  of  tliis  description,  see  Smith  far  the  firm  is  bound  by  instruments  on 

V.  Ball,  9  Q.  B.  361.  which  its  true  name  does  not  appear  will 

(gr)  Carruthers  v.  Sheddon,  6  Taunt.  15 ;  be  seen  hereafter  ;  and  see,  as  to  the  par- 
Bass  V.  Clive,  4  Mau.  &  S.  13 ;  Stubbs  v.  ties  to  sue  on  a  covenant  with  a  firm, 
Sargon,  2  Keen  255,  and  3  Myl.  &  C.  507  ;  Metcalf  v.  Rycroft,  6  Mau.  &  S.  75,  noticed 
Latouche  v.  Waley,  Hayes  &  J.  Ir.  Ex.  43.  infra,  book  II.,  ch.  3. 

{h)  See  Maughan  v.  Sliarpe,  17  C.  B.        (i)  Weikersheim's  Case,  8  Ch.  831. 
(N.  S.)  443,  a  mortgage;  Brutton  v.  Bur-        (j)  Weldon  v.  Dicks,  10  Ch.  D.  247. 
ton,  9  Chitty  707,  a  warrant  of  attorney ;        (A)  Rock  r.  Lazarus,  15  Eq.  104. 
Evans  v.  Curtis,  2  Car.  &  P.  296,  an  agree-        2.  Firm  name,  generally.— The  parties 

144 


CHAP.  VI.,  §  II.]  LEGAL    VIEW    OF   A    FIEM.  IIS^^ 

Effect  of  change  amongst  the  partners. — But  as  the  name  of  a  firm 
is  only  a  conventional  mode  of  designating  the  persons  composing  it, 
any  variation  amongst  these  persons  is  productive  of  a  new  significa- 

to  a  copartnership  may  give  it  just  such  of  both  nominal  firms  are  equally  applica- 
a  name  as  they  please,  and  all  contracts  ble  to  the  payment  of  all  creditors  of  both. 
or  obligations  or  notes,  made  with  or  Re  Williams,  3  Woods  (U.  S.)  493. 
given  to  such  firm,  may  be  prosecuted  in  W  here  in  the  articles  no  name  was 
the  individual  names  of  its  members,  agreed  upon,  and  the  concern  went  into 
Crawford  u  Collins,  45  Barb.  (N.  Y.)  269;  operation  under  the  articles,  the  books 
30  How.  Pr.  398.  being  kept,  and  the  bills  and  accounts  re- 

Persons  doing  business  under  a  cor-  lating  to  their  transactions  being  made 
porate  name,  if  not  a  corporation,  are,  it  out  at  their  warehouse,  in  the  name  of 
is  said,  inferred  to  be  a  partnership.  Hoi-  "  H.  &  J.,"  it  cannot  be  questioned  but 
brook  V.  St.  Paul  F.  &  M.  Ins.  Co.,  25  that  a  name  thus  assumed,  recognized  and 
Minn.  229.  publicly  used,  became  the  legitimate  name 

It  is  not  necessary,  in  general,  in  deriv-  and  style  of  the  firm,  as  fully  as  if  it  had 
ing  a  title  through  the  endorsement  of  a  been  adopted  by  the  articles  of  partner- 
firm,  to  allege  in  particular  who  the  per-  ship.  Le  Roy  v.  Johnson,  2  Pet.  (U.  S.) 
sons  are  composing  that  firm  ;  for  if  the    186. 

endorsement  be  made  in  the  name  of  the  An  estimate  for  a  corporation  contract 
firm,  by  a  person  duly  authorized,  it  gives  purported  by  its  title  to  be  made  by  W. 
a  complete  title,  whoever  may  compose  and  D.,  under  the  name  and  style  of  D., 
the  firm.  Nor  is  it  necessary,  in  a  decla-  W.  &  Co.  It  was  subscribed  by  each 
ration  at  the  suit  of  the  executor  of  a  sur-  individual  name,  and  also  by  the  firm 
Tiving  partner,  to  set  forth  the  names  of  name.  Held,  that  it  was  to  be  treated  as 
the  firm.  Childress  v.  Emory,  8  Wheat,  a  partnership  act,  and  not  as  that  of 
(U.  S.)  642.  the  individual  partners.    People  v.  Croton 

Again,  no  firm  name  need  be  agreed  Aqueduct  Board,  5  Abb.  (N.  Y.)  Pr., 
upon  in  the  partnership  articles.  If  there  316 ;  affirmed,  6  Id.  42 ;  S.  C,  26  Barb, 
is  evidence  of  an  agreement  to  buy  and    240. 

sell  on  joint  account  for  mutual  profit,  F.  C.  and  R.  C.  being  in  partnership,  F. 
and  if  one  partner,  with  the  knowledge  made  a  note,  subscribing  it  *' F.  C.  &  R. 
and  assent,  express  or  implied,  of  the  C,"  coupling  the  two  names  together, 
other,  is  in  the  habit  of  using  a  certain  Held,  sufficient,  as  a  partnership  signa- 
name,  it  is  sufficient  to  fix  the  liability  of  ture,  to  charge  R.,  in  the  absence  of  proof 
the  firm  upon  a  note  signed  with  that  as  to  what  was  the  firm  name,  except  that 
name.  Parsley  v.  Ramsey,  31  Ga.  403.  in  two  instances  the  name  of  F.  &  R.  C. 
So,  it  is  not  necessary  that  two  firms,  in  was  used.  McGregor  v.  Cleveland,  5 
different  localities,  entering  into  an  agree-    Wend.  (N.  Y.)  475. 

ment,  in  express  terms,  creating  a  partner-  Using  name  of  one  of  the  partners, 
ship  for  the  carrying  on  of  a  special  busi-  — A  firm  may  do  business  under  the 
ness,  should  adopt  any  partnership  or  firm  name  of  one  of  the  partners  alone,  and 
name.  Wright  v.  Hooker,  10  N.  Y".  (6  can  sue  in  all  their  names  on  contracts 
Seld.)  51.  And  where  the  same  parties  made  in  the  name  of  such  one  alone, 
carry  on  the  same  business  at  different  Martin  v.  Johnson,  8  Daly  (N.  Y.)  541. 
places,  under  diflferent  partnership  names,  See,  also,  Ontario  Bank  v.  Hennessey,  48 
there  are  not  two  distinct  firms  ;  the  assets    N.  Y.  545.    And  bills  of  exchange,  drawn 

145  10 


113*  LEGAL   VIEW   OF    A    FIRM.  [bOOK    I., 

tion  of  the  name.  U,  therefore,  a  legacy  is  left  to  a  firm,  the  legacy 
is  payable  to  those  who  compose  the  firm  at  the  time  the  legacy 

upon  and  accepted  by  the  partner  whose  tioned  therein,  and  it  appears  upon  its 
name  is  so  used,  will  be  recoverable  face  to  be  sini()ly  the  obligation  of  the  co- 
against  the  firm,  in  the  absence  of  proof  partners  contracted  in  their  individual 
that  such  partner  also  carried  on  business    names.     lb. 

on  his  private  account.  Bank  of  Roches-  Presumptions  from  use  or  disuse  of 
ter  V.  Monteath,  1  Den.  (N.  Y.)  402;  firm  name. — Until  a  firm  name  is  adopted 
Palmer  1).  Stephens,  Id.  47L  the  presumption  is  that  each  member  is 

This  right  to  use  the  name  of  one  of  the  the  agent  of  the  others  to  transact  the 
partners  as  a  firm  name  is  an  exception  firm  business,  even  to  the  signing  of  the 
to  the  rule  that  one  partner  executing  an  names  of  the  several  members  of  the  firm 
instrument  intended  to  bind  the  firm  must  to  writings  executed  i-n  its  legitimate  busi- 
use  the  firm  name.  Williams  v.  Gillies,  ness.  Kitner  v.  Whitlock,  88  111.  514. 
75  N.  Y.  197  ;  reversing  13  Hun  422 ;  53  Where  a  partnership  is  carried  on  in 
How.  Pr.  429.  the  name  of  an  individual,  and  a  suit  is 

A  partner  is  not  necessarily  to  be  brought  against  the  partners  upon  a  note 
deemed  dormant  because  his  name  does  or  other  obligation  signed  by  him,  the 
not  appear  in  the  firm  style.  If  he  is  not  presumption  is  that  it  is  the  note  of  the 
an  ostensible  partner  it  is  sufficient.  And  individual,  and  not  of  the  partners.  Plain- 
upon  the  question  whether  a  member  of  a  tiff,  in  order  to  recover  against  the  part- 
partnership  is  a  dormant  partner,  evi-  ners,  must  not  only  prove  execution  of 
dence  as  to  general  reputation  is  admissi-  the  note,  but  also  that  the  money  was 
ble.  Metcalf  v.  Officer,  2  Fed.  Rep.  640  ;  borrowed  on  the  credit  of  the  partnership, 
S.  C,  1  McCrary  (U.  S.)  325.  or    used    in    its    business.     Oliphant     v. 

Firm  name  need  not  be  used  to  ren-  Mathews,  16  Barb.  (N.  Y.)  608. 
der  firm  liable. — When  funds  or  property  It  is  no  objection  to  a  suit,  upon  notes 
are  obtained  on  the  obligation  of  only  a  payable  to  the  plaintiff  firm  by  their  firm 
portion  of  the  members  of  a  firm,  the  fact  name,  that  their  consideration  was  a  sale 
that  the  property  thus  obtained  goes  to  the  of  goods  to  the  defendant  at  a  previous 
use  of  the  firm  is  not  of  itself  sufficient  to  time  when  one  Vose  was  a  partner,  and 
render  the  firm  liable.  But  where  the  the  fact  is  immaterial.  Whitlock  v.  Mc- 
property  is  not  only  obtained  for  and  ap-  Kechnie,  1  Bosw.  (N.  Y.)  427. 
plied  to  the  benefit  of  the  firm,  but  is  so  The  use  of  "  and  company,"  after  a 
obtained  by  the  joint  act  and  upon  the  firm  name,  creates  a  presumption  that 
joint  written  obligation  of  all  its  mem-  there  is  a  partner  not  named,  which,  how- 
bers,  and  the  credit  is  given  to  all,  the  ever,  may  be  overcome  by  positive  proof, 
transaction  is  in  substance  a  copartnership  lb;  The  Francis,  1  Gall.  (U.  S.)  filS; 
transaction,  though  the  firm  name  is  not  The  San  Jos4  Indiano,  2  Id.  268.  But 
actually  used  in  the  writing,  and  though  see  Robinson  v.  Magarity  (28  111.  423), 
the  partners  may  have  superadded  to  their  where  it  is  held  that  there  is  no  presurap- 
joint  obligation  the  several  liability  of  tion  of  law  or  fact  that  a  firm  name  in- 
each  of  them.  Ct.  of  App  ,  Jan.,  1879.  eludes  more  than  one  person;  and  if  it  is 
Berkshire  Woolen  Co.  v.  Juillard,  75  N.  desired  that  the  names  of  plainiiffs  should 
Y.  535,  540;  affirming  13  Han  506.  Such  be  shown,  the  fact  of  partnership  must  be 
an  obligation  is  payable  out  of  the  firm  put  in  issue  by  a  verified  plea, 
assets,  although  the  firm  name  is  not  men-        The    mere    fact    that    an    abbreviated 

146 


CHAP.  VI.,  §  II.]  LEGAL   VIEW   OF   A 


FIRM. 


113^ 


vests ;  (l)  and,  if  a  legacy  is  left  to  the  representatives  of  an  old  firm, 
it  will  be  payable  to  the  executors  of  the  last  survivor  of  the  partners 
constituting  the  firm  alkided  to,  and  not  to  its  successors  in  business,  (m) 

Advances  to  a. firm. — Again,  if  trustees  are  authorized  to  lend  money 
to  a  firm,  and,  after  the  death  or  retirement  of  one  of  the  members,  the 
trustees  lend  to  the  remaining  members,  this,  it  seems,  would  be  a 
breach  of  trust  on  the  part  of  the  trustees,  (n) 

Agency. — An  authority  given  to  two  partners  to  insure  in  their 
names  does  not  authorize  an  insurance  in  the  names  of  themselves  and 
a  third  person  afterwards  taken  into  partnership  with  them,  (o)  So, 
if  there  be  a  firm.  A,  B  and  C,  and  it  has  an  agent,  D,  and  C  retires 
from  the  firm,  though  D  may  continue  the  agent  of  the  firm,  he  is  no 
longer  the  agent  of  C,  but  ouly  of  A  and  B,  (p)  In  Tasker  v.  Shep- 
herd, two  partners  had  appointed  an  agent  for  four  years  and  a  half. 
One  of  the  partners  having  died  before  the  expiration  of  that  time,  it 
was  held  that  the  surviving  partner  was  under  no  obligation  to  continue 
the  agent  in  his  employ.     The  court  held  that  the  appointment  had 


*114] 


reference  to  the  existing  partnership  only,  *and  that  the  con- 


tract was  intended  to  be  for  four  years  and  a  half,  provided 
the  parties  so  long  lived,  {q)  3 


form,  as  "Chas.  &  Wm.  Feiokert,"  in- 
stead of  "  CBarles  Feickert  and  William 
Feickert,"  is  used  in  describing  the  payees 
of  a  note,  does  not,  as  a  matter  of  law, 
authorize  the  public  to  assume  they  were 
partners.  Ryhiner  v.  Feickert,  92  111. 
305. 

(/)  See  Stubbs  v.  Sargon,  2  Keen  255, 
and  3  Myl.  &  C.  507.  In  Mayberry  v. 
Brooking,  7  De  G.,  M.  &  G.  673,  a  legacy 
of  a  debt  due  to  A  was  held  to  pass  A's 
interest  in  a  debt  due  to  him  and  his  co- 
partners. See,  also.  Ex  parte  Kirk,  5 
Ch.  D.  800. 

(m)  Leak  v.  McDowall,  3  N.  R.  185,  M. 
R.;  Kerrison  v.  Reddington,  11  Ir.  Eq. 
451.  See  Greville  v.  Greville,  27  Beav. 
594. 

{n)  See  Fowler  v.  Raynal,  2  De  G.  & 
S.  749,  and  3  Macn.  &  G.  500. 

(o)  Barron  v.  Fitzgerald,  6  Bing.  N.  C. 
201.  But  of  course  a  continuance  of  the 
authority  may  be  inferred  from  the  deal- 


ings of  the  person  giving  it  with  the 
changing  firms.  See  Pariente  v.  Lubbock, 
8  De  G.,  M.  &  G.  5. 

(p)  See  Jones  v.  Shears,  4  Ad.  &  E.  832. 

iq)  Tasker  v.  Shepherd,  6  Hurlst.  &  N. 
575. 

3.  Agency. — The  agent  of  a  firm  is  not 
the  agent  of  the  individual  partners,  but 
of  the  partnership,  collectively.  John- 
ston V.  Brown,  18  La.  Ann.  330. 

An  agency  is  revoked  by  the  death  of  a 
member  of  the  partnership,  even  though 
it  arises  from  the  fact  of  the  partnership 
relation  existing  between  the  principal 
and  the  agent.  Travers  v.  Crane,  15  Cal. 
12.  But  compare  Bank  of  N.  Y.  v.  Van- 
derhorst  (32  N.  Y.  553),  where  it  was  held 
that  where  an  agent  of  a  firm,  authorized 
to  draw  its  moneys  from  the  bank  and  ap- 
ply the  same  to  the  uses  of  the  firm,  con- 
tinues to  do  so  after  the  death  of  one  of 
the  members,  without  knowledge  on  his 
part  or  on  tiie  part  of  the  bank,  of  such 


147 


114*  LEGAL   VIEW   OF    A    FIRM.  [bOOK    I.^ 

Offices  held  by  a  firm. — Upon  the  same  principle,  namely,  that  the 
name  of  the  firm  is  only  a  conventional  name  for  its  members,  if  a 
firm  is  appointed  by  its  mercantile  name  to  any  office,  e.  g.,  the  office 
of  trustee,  guardian  or  executor,  the  partners  in  the  house  at  the  time 
of  its  appointment  to  the  office  are  the  persons  who,  in  point  of  law, 
are  considered  as  filling  it,  (?•)  The  firm  as  such  cannot  hold  an  office, 
nor  can  rights  personal  to  the  members  of  a  given  firm  be  exercised 
by  new  members  who  may  be  introduced  into  it,  (s)  nor  by  its  succes- 
sors in  business,  (t)  unless  they  are  clearly  intended  to  exercise  them. 

Protection  of  name. — The  name  by  which  a  firm  is  known  is  not 
of  itself  the  property  of  the  firm,  and  there  is  nothing  at  common  law 
to  prevent  persons  from  carrying  on  business  in  partnership  under 
any  name  they  please,  unless  perhaps  it  purports  to  be  the  name  of  a 
corporation,  [u) 

But  one  firm  is  not  at  liberty  to  mislead  the  public  by  so  using  the 
name  of  another  firm  as  to  pass  off  themselves  or  their  goods  for  that 
other,  or  for  the  goods  of  that  other,  (a;)  Moreover,  an  established 
firm  can  prevent  a  company  from  registering  itself  under  the  name 
of  the  firm,  [y)  4 

death,  he  acts  within    the  scope   of  his  (r)  De  Mazar  v.  Pybns,  and  Knudson  v. 

authority,    and   his   acts    bind    the   firm.  Pybus,  4  Ves.  649. 

See,  also,  Wilson  v.  Stewart,  5  Pa.  L,  J.  (s)  See  Barron  v.  Fitzgerald,  6   Bing. 

450.  N.  C.  201 ;  Stevens  v.  Benning,  1  Kay  & 

So,  also,  the  dissolution  of  a  partnership  J.  168. 

revokes  a  power  of  attorney  given  by  the  {t)  Hole  v.  Bradbury,  12  Ch.  D.  886. 

firm.     Schlater  v.  Winpenny,  75  Pa.  St.  (u)  See,  as  to  this,  an/e  p.  *93. 

321.     But  a  mere  change  in  the  name  of  {x)  See  Lee  v.  Haley,  5  Ch.  155;   Mas- 

a  firm,  tho  firm  under  the  new  name  being  sam  v.  Thorley's  Cattle  Food  Co.,  14  Ch. 

composed  of  the  same  persons  as  that  un-  D.   748  ;  reversing   S.  C,  6  Ch.  D.  574  j 

der  the  old  one,  does  not  revoke  an  agency  Burgess  v.  Burgess,  3  D.  G.  M.  896.    See, 

conferred  upon  it.     Billingsley  v.  Dawson,  also.    Singer    Machine    Manufacturers  v. 

27  Iowa  210.  Wilson,  3  App.  Cas.  376,  and  Singer  Man. 

S.  was   a  member  of  a   transportation  Co.  v.  Loog,  18  Ch.  D.  395,  and  8  App. 

firm,  and  carried  on  the  business  at  A.,  Cas.  15 ;    Braham  v.  Beachim,  7  Ch.  D. 

and  a  similar  business  at  the  same  place  848. 

alone,  and  drew  checks  in  the  name  of  {y)  Hendricks  !;.   Montagu,  17  Ch.  D. 

"  S.,  agent,"  indifi'erently,  in  his  own  and  638.      The  Copyright    acts  have  no   ap- 

the  firm  business.     The  firm  being  sued  plication  to  mere  names.     See  Maxwell  v. 

on  such  checks— Held,  that  the  other  part-  Hogg,  2  Ch.  307. 

ners  had  a  right  to  prove  that  the  checks  4.   Protection  of  name. — A  purchaser 

in  question  were  drawn  on   the   private  of  all  the  partnership  property,  on  the  dis- 

account  of  S.     Mechanics'  and  Farmers'  solution  of  a  firm,  does  not  thereby  acquire 

Bank  v.  Dakin,  24  Wend.  (N.  Y.)  411.  the  right  to  use  the  firm  name  as  a  label 

148 


CHAP.  VI.,  §  II.]  LEGAL   VIEW   OF   A   FIRM.  114* 

Name  a  trade-mark. — The  name  of  a  firm  may  moreover  be  regis- 
tered as  a  trade-mark  for  particular  classes  of  goods  (46  and  47  Vict., 
c.  57,  §§  64  and  65),  and  if  so  registered  it  is  capable  of  being  assigned 
in  connection  with  the  good  will  of  the  firm.  Section  70.  Registra- 
tion is  equivalent  to  antecedent  use.  Section  75.  Provision  is  made 
*to  prevent  the  impi'oper  registration  of  the  same  trade-mark  p^-.  -,  - 
by  several  persons.     Section  72. 

Changes  and  mistakes  in  name  of  a  firm. — Speaking  generally,  the 
rights  and  liabilities  of  a  firm  cannot  be  affected  by  a  change  in  its 
name,  unaccompanied  by  a  change  amongst  its  members.  Regarded 
as  a  trade-mark,  and  in  connection  with  good  will,  a  change  in  name 
may  be  attended  by  important  consequences,  but,  in  other  respects,  it 
matters  little  ;  for  so  long  as  there  is  no  change  amongst  the  members, 
the  different  names  they  assume  all  denote  the  same  persons.  It  must 
not,  however,  be  concluded  that  one  partner  can  bind  his  copartners 
by  using  a  name  under  which  he  and  they  do  not  carry  on  business, 
and  the  use  of  which  they  have  not  sanctioned ;  and,  as  will  be  seen 
hereafter,  he  has  no  power  so  to  bind  them,  (z)  Moreover,  a  mistake 
in  the  name  of  a  firm  may  be  important ;  e.  g.,  under  the  Copyright 
act^  if  the  owners  of  a  copyright  carry  on  business  in  partnership,  and 
are  not  registered  properly,  they  cannot  sue  far  an  infringement,  (a) 

2.  In  legal  pr'oceedings. 
Actions  by  and  against  firms. — The  non-recognition  of  the  firm,  in 

on  his  goods,  or  to  advertise  himself  as  ing  to  do  business  under  the  corporate 
successor  of  such  firm,  and  will  be  re-  name,  allaging  that  the  defendants'  pre- 
strained  in  so  doing.  Reeves  v.  Denicke,  tended  corporation  no  longer  existed. 
12  Abb.  (N.  Y.)  Pr.,  N.  s ,  92.  Held,  not  sufficient  ground  for  the  relief 
A  company  claiming  to  have  been  in-  sought.  If  the  defendants  were  no  longer 
corporated  under  the  laws  of  Michigan,  incorporated,  or  if  their  original  organiza- 
commenced  business  in  Illinois  under  an  tion  as  a  corporation  was  illegal,  they 
assumed  corporate  name.  Subsequently  still  had  a  right  to  prosecute  their  business 
another  company  became  incorporated  as  partners,  and  under  any  name  they 
by  the  same  corporate  name,  under  the  saw  fit  to  adopt.  Ottoman  Cahvey  Corn- 
laws  of  Illinois,  and  commenced  business  pany  v.  Dane,  95  111.  203. 
in  the  same  city  in  which  the  first  men-  (z)  See,  as  to  this.  Kirk  v.  Blurton,  9 
tioned  company  was  established.  The  Mees.  &  W.  284,  and  other  cases  of  that 
company  organized  under  the  laws  of  class,  noticed  infra,  book  II.,  ch.  1,  §  5. 
Illinois  sued  to  restrain  the  persons  com-  (a)  Low  v.  Routledge,  1  Ch.  42. 
posing  the  other  company  from  continu- 

149 


115*  LEGAL   VIEW   OF   A   FIRM.  [bOOK   L, 

a  mercantile  sense,  was  very  apparent  when  it  had  to  sue  or  be  sued 
at  law ;  for, 

1.  A  firm  could  neither  sue  nor  be  sued  otherwise  than  in  the  names 
of  the  partners  composing  it.  (6) 

2.  Consequently,  no  action  could  be  brought  by  the  firm  against 
one  of  its  partners,  nor  by  one  of  its  partners  against  it ;  for  in  any 
such  action  one  person,  at  least,  would  appear  both  as  plaintiff  and  as 
defendant,  and  it  was  considered  absurd  for  any  person  to  sue  himself 
even  in  form,  (c) 

3.  For   the   same    reason,    one    firm   could    not    bring   an   action 

-,   *ao-ain3t  another  if  there  were  one  or  more  partners  common 
*116l 

to  both  firms,  {d) 

So,  if  one  member  of  a  firm  drew  a  bill  on  the  firm,  and  the  bill 
was  accepted  in  the  name  of  the  firm,  the  drawer  could  not  sue  the 
firm  on  such  a  bill ;  for  he,  as  one  of  the  firm,  was  liable  as  an  acceptor, 
and  ought,  therefore,  to  be  a  defendant  to  the  action  in  which  he  was 
plaintiff,  (e) 

The  extent  to  which  these  rules  have  been  modified  by  modern 
legislation  will  be  examined  hereafter.  (/)  They  are  alluded  to  here 
in  order  to  show  the  logical  consequences  which  flow  from  the  non- 
recognition  of  any  such  entity  as  a  firm.  In  bankruptcy,  however, 
the  firm  is  often  recognized,  as  will  be  seen  hereafter.  5 

(6)  Seeinfra,booklL,ch.3.    A  corpora-  proper  names ;  it  is  not  sufficient  to  use 

tiou  may  sue  in  a  name  it  has  acquired  the  style  of  the  firm.     Seeley  v.  Schenck, 

by  reputation.     The  Dutch   West  India  1  Pen.  (N.  J.)  75  ;  Crandall  f.  Denny,  Id. 

Co.  V.  Moses,  I  Str.  612.    As  to  actions  by  137  ;  Burns  v.  Hall,  Id.  984  ;  Bentley  v. 

individuals  who  have  assumed  to  act  as  gmith,  3  Cai.  (N.  Y.)  170;  Tomliuson  v. 

a  corporation,  see  Cooch  v.  Goodman,  2  Burke,  5  Halst.   (N.  J.)  295;   Porter  v. 

Q.  B.  580.  Cresson,  10  Serg.  &  R.  (Pa.)  257;    Pate  v. 

(c)  De  Tastet  v.  Shaw,  1  B.  &  A.  664;  Bacon,  6  Munf.  (Va.)  219;  Marshall  v. 
Richardson  v.  The  Bank  of  England,  4  Hull,  8  Yerg.  (Tenn.)  101;  Smiths.  Can- 
Myl.  &  C.  171,  172.  field,  8  Mich.  493.    In  some  jurisdictions, 

(d)  Bosanquet  v.  Wray,  6  Taunt.  597  ,  however,  a  partnership  may  sue  on  a  debt 
Mainwaring  v.  Newman,  2  Bos.  &  P.  120.  due  to  the  firm  in  the  partnership  name. 

(e)  See  Neale  v.  Turton,  4  Bing.  1.49.  Johnson  v.  Smith,  1  Morr.  (Iowa)  105; 
Compare  Beecham  v.  Smith,  El.,  B.  &  E.  Abernathy  v.  Latimore,  19  Oliio  286.  See, 
442,  where  the  note  sued  upon  was  the  also,  Haskins  v.  Alcott,  13  Ohio  St.  210. 
several  note  of  the  defendants.  In  Texas,  if  the  individual  names  appear 

(/)  See  infra,  book  II.,  ch.  3.  in  the  petition,  the  name  of  the  firm  may 

5.  Actions  in  the  firm    name.— The  be  used  in  the  citation.    Andrews  v.  Ennis, 

prevailing    rule    in   this  country   is  that  16  Tex.  45. 

copartners  must  sue  and  he  sued  in  their  So,  also,  an  unincorporated  company  can- 

150 


CHAP.  VI.,  §  II.]  LEGAL    VIEW    OF    A    FIRM. 


116* 


Efed  of  change  in  a  firm  on  its  rights  and  liabilities. — Another  most 
important  consequence  of  the  principle  that  on  any  change  amongst 
the  persons  composing  a  partnership  there  is,  in  fact,  a  new  partner- 
ship, and  not  a  mere  continuation  of  the  old  one,  is  that  although, 
upon  a  change  in  a  firm,  it  may  be  agreed  between  the  members  of 
the  old  and  new  firms  that  the  rights  and  obligations  of  the  old  shall 
devolve  upon  the  new  partners,  this  has  no  effect  upon  third  parties, 
unless  they  accede  to  it.  As  to  them  it  is  I'es  inter  alios  acta,  and 
there  is  no  principle  by  virtue  of  which  the  existing  rights  or  obliga- 
tions of  non-partners  can  be  affected,  either  for  better  or  for  worse, 
by  agreements  to  which  they  are  strangers.  This  subject  will  be 
alluded  to  hereafter,  {g) 

3.  Partnership  disabilities. 

Disabilities  of  one  partner  affecting  the  firm. — Speaking  generally, 
no  person  can  do  by  his  agent  what  he  cannot  do  himself;  and 
although  each  member  of  a  firm  is  a  principal  as  regards  his  own  con- 
duct, he  is  the  agent  of  his  copartners,  and  he  cannot  therefore  do  for 


not  sue  in  the  name  of  the  firm.  Davis 
V.  Hubbard,  4  Blackf.  (Ind.)  50;  Hughes 
V.  Walker,  Id.  50. 

In  California  a  complaint  brought  in  a 
firm  name,  and  not  stating  the  names  of 
the  members  as  plaintiffs,  is  defective,  and 
may  be  demurred  to,  but  the  defect  cannot 
be  availed  of  by  appeal.  Gilman  v.  Cos- 
grove,  22  Cal.  356.  Such  a  complaint  is 
good  after  verdict.  Pate  v.  Bacon,  6 
Munf.  (Va.)  219. 

In  South  Carolina  a  summary  process 
brought  in  the  mercantile  name  of  a  firm, 
without  setting  out  the  partnership  or  the 
Christian  names  of  the  partners,  is  bad 
upon  exception  by  plea ;  but  not  on  mo- 
tion for  nonsuit.  Martin  v.  Kelh',  Cheves 
(S.  C.)  215. 

Where  a  foreign  firm  is  sued  in  its  firm 
name  and  answers,  and  a  verdict  is  taken 
upon  the  defence  set  up  in  the  answer, 
without  objection  to  the  irregularity,  the 
firm  will  be  deemed  to  have  waived  their 
legal  right  to  object.     Brownson  v.  Met- 

1 


calfe,  1  Handy  (Ohio)  188. 

Where  plaintiff,  in  fact,  assuming  to  act, 
not  as  a  corporation,  but  as  a  partnership, 
sues  by  a  name  importing  a  corporation, 
the  point  may  be  raised  by  an  answer 
alleging  want  of  parties  in  interest  to  the 
suit.  Heaston  v.  Cincinnati,  &c.,  E..  R. 
Co,  16  Ind.  275. 

In  Iowa,  where  a  note  is  made  payable 
to  a  firm  by  its  name,  it  is  advisable  to 
declare  thereon  in  the  name  of  the  firm  ; 
but  if  the  names  of  the  several  partners 
are  set  out,  it  is  not  necessary  to  prove 
them.  Gordon  v.  Janney,  1  Morr.  (Iowa) 
182 ;  Bernard  v.  Parvin,  Id.  309. 

A  judgment  in  favor  of  "  L.  &  M.," 
trading  as  a  firm,  is  valid,  and  is  compe- 
tent evidence,  in  a  suit  brought  by  the  firm, 
that  the  judgment  was  recovered  by  the 
partnership,  their  individual  names  being 
set  out  in  full.  Lash  v.  Arnold,  8  Jones 
(N.  C.)  L.  91. 

(g)  See  infra,  book  II.,  ch.  2,  §  3. 


51 


116*  AS   KEGARDS   SECURITIES.  [bOOK   I., 

the  firm  what  they  cannot  do.     In  other  words,  the  disability  of  one 
of  the  partners  alfects  the  whole  firm.     Illustrations  of  this  doctrine 
will  *be  found  in  book  IL,  ch.  3,  §  1,  relating  to  defences  to   r^-|,» 
actions  by  partners.      Further  illustrations   are  afforded  by 
those  cases  which  preclude  a  firm  of  solicitors  or  any  of  its  members 
from  doing  work  which  one  of  the  members  cannot  do.  (A) 

Again,  there  are  rules  in  bankruptcy  which  prevent  the  partners  of 
the  trustee,  registrar  or  official  receiver  from  doing  various  acts  which 
they  might  do  if  they  were  not  in  partnership  with  him.  (i) 

By  50  and  51  Vict.,  c.  58,  §  40,  no  inspector  of  a  coal  mine  can  be 
a  partner  in  it,  nor  can  a  partner  of  any  land  agent,  mining  engineer, 
&c.,  be  an  inspector. 


4.  As  regards  sureties  and  securities. 

Effect  of  change  in  a  firm  on  the  position  of  its  sureties. — It  is  a 
principle  of  the  law  of  suretyship  that  any  act  on  the  part  of  the 
principal  creditor  which  alters  the  risk  of  the  surety  without  his  con- 
sent, discharges  him  from  future  liability,  {k) 

Sureties  to  a  firm. — If,  therefore,  a  person  becomes  surety  te  a  firm, 
it  is  important  to  ascertain  whether  he  clearly  contemplated  changes 
in  the  firm,  and  agreed  to  become  surety  to  a  fluctuating  body  or  not. 
If  he  did,  his  liability  is  not  discharged  by  any  change  amongst  the 
members  constituting  the  partnership  at  the  time  he  became  surety  ;  [l) 
but  if  no  such  intention  can  be  shown,  then  a  contract  of  suretyship 
entered  into  with  a  firm  will  be  deemed  to  be  binding  so  long  only  as 
the  firm  remains  unchanged  (see  19  and  20  Vict.,  c.  97,  §  4,  on  the 

(h)  See   Duke   of   Northumberland   v.  tin's,  2  Ad.  &  E.  655. 
Todd,  7  Ch.  D.  777,  as   to  swearing  affi-        (l)  Pease  v.  Hirst,  10  Barn.  &  C.  122  5 

davito.  Metcalf   v.  Bruin,   12   East   400,   and    2 

(i)  See  Bank.  Act,  1883,  U  88, 116,  (2) ;  Camp.  422 ;  and  see  Barclay  v.  Lucas,  1 

Bched.  1,  r.  26;  Bank.  R.  1886,  r.  56,  (2),  T.  R.  291,  note;  Kipling  v.  Turner,  5  B. 

113,  114.  &  A.  261.     In  Pariente  v.  Lubbock,  8  De 

(A)  See,   as    to    sureties,   the  note    to  G.,  M.  •&  G.  5,  an  authority  to  a  firm  of 

Arlington  v.  Merrick,  2  Wms.  Saund.  414.  consignees,  to   recognize    the    consignor's 

As   to    the  discharge  of  apprentices  and  son   as  his  agent,  was  held    to  continue, 

their  sureties  by  a  change  in  the  firm  to  notwithstanding  changes  in    the  firm,  as 

which  they  are  bound,  see  Lloyd  v.  Black-  long  as  the  consignor  continued  his  busi- 

burne,  9  Mees.  &  W.  363  ;  R.  v.  St.  Mar-  ness  connection  with  the  firm. 

152 


CHAP.  VI.,  §  II.]  LEGAL   VIEW   OF   A   FIRM.  118* 

next  page) ;  *and  consequently  any  change  in  it,  whether  by 
-'  death  {70)  or  the  retirement  (n)  of  a  partner,  or  by  the  intro- 
duction of  a  new  partner,  (0)  immediately  puts  an  end  to  the  surety's 
liability  so  far  as  subsequent  events  are  concerned.  In  all  such  cases 
the  surety's  position  and  risk  are  altered,  and  whether  he  has  in  fact 
been  damnified  by  the  change  or  not,  he  has  a  right  to  say  non  in  hceo 
foederaveni. 

Sureties  for  a  firm. — Similar  doctrines  apply  to  cases  where  a  person 
becomes  surety /or  the  conduct  of  a  firm.  (j>)  Moreover,  a  person 
who  becomes  surety  for  another  is  not  necessarily  surety  for  his  con- 
duct as  a  partner,  and  obviously  not  for  the  conduct  of  himself  and 
his  copartner.  (5)  6 

Effect  of  incorporation. — Again,  if  a  person  becomes  surety  to  several 
people  for  the  conduct  of  a  servant  in  their  employ,  and  those  people 
are  afterwards  incorporated,  the  surety  is  discharged,  for  the  person 
created  by  the  act  of  incorporation  is  different  from  the  persons  in 
whose  employ  the  servant  was,  and  with  whom  the  surety  con- 
tracted, (r)  On  precisely  similar  grounds  it  is  conceived  that  a  person 
who  becomes  surety  to  a  corporation  for  the  conduct  of  one  of  its 
servants  would  be  discharged  by  the  amalgamation  of  that  corporation 
with  another;  for  the  two  together  would  be  a  different  body  from 
either  of  its  amalgamated  members,  (s)  But  a  mere  change  of  name 
consequent  on  registration  with  limited  liability  has  not  this  effect.  {C) 

"^Mercantile  Laio  Amendment   act. — The   doctrines   estab-  r:)ci-|Q 
lished  in  the  foregoing  cases  have  been  expressly  sanctioned  by 

(m)  Hollands. Teed, 7  Hare  50;  Strange  6  Q.  B.  514;  Montifiore  v.  Lloyd,  15  C. 

V.  Lee,  3  East  484  ;  Weston  v.  Barton,  4  B.  (N.  S.)  203,  where  the  partnership  was 

Taunt.  673 ;  Pemberton  v.  Oakes,  4  Russ.  known  to  the  surety. 

154;  Sim  son  u  Cooke,  1  Bing.  452;  Chap-  6.  See  Leabo  v.  Goode,   67   Mo.   126; 

man  v.  Beckington,  3  Q.  B.  703 ;  Back-  Gates  v.  Hughes,  44  Wis.  333. 

house  V.  Hall,  6  N.  R.  98,  Q  B.  (r)  Dance  v.  Girdler,  1  Bos.  &  P.  (N.  R.) 

(»)  Myers  v.  Edge,  7  T.  R.  254 ;  Dry  34. 

V.  Davey,  10  Ad.  &  E.  30 ;  and  see  Sol-  (s)  In  The  Eastern  Union  Railway  Co. 

vency  Mutual  Guarantee  Co.  v.  Freeman,  v.  (bckrane,  9  Ex.  197,  and  The  London, 

7  Hurlst.  &  N.  17.  Brighton  and  South  Coast  Railway  Co.  i;. 

(0)  Wright  V.  Russell,  2  W.  Bl.  934.  Goodwin,  3  Ex.  320,  the  surety  was  not 

(p)  Bellairs  V.  Ebsworth,  3  Camp.  53  ;  discharged;  but  the  statute  amalgamating 

University  of   Cambridge  v.  Baldwin,  5  the  two  companies  contained  an  express 

Mees.  &  W.  580  ;  Simson  v.  Cooke,  1  Bing.  provision  on  the  subject. 

452 ;  19  and  20  Vict.,  c.  97,  I  4.  (0  Groux's  Soap  Co.  v.  Cooper,  8  C.  B. 

(5)  The  London  Assurance  Co.  v.  Bold,  (N.  S.)  800. 

153 


119*  AS    REGARDS    SECURITIES.  [bOOK   I., 

the  legislature,  it  being  enacted  by  the  Mercantile  Law  Amendment 
act  (w)  that : 

"  No  promise  to  answer  for  the  debt,  default  or  miscarriage  of  another  made  to  a 
firm  consisting  of  two  or  more  persons,  or  to  a  single  person  trading  under  the  name 
of  a  firm,  and  no  promise  to  answer  for  the  debt,  default  or  miscarriage  of  a  firm  con- 
sisting of  two  or  more  persons,  or  of  a  single  person  trading  under  the  name  of  a  firm, 
shall  be  binding  on  the  person  making  such  promise  in  respect  of  anything  done  or 
omitted  to  be  done  after  a  change  shall  have  taken  place  in  any  one  or  more  of  the 
persons  constituting  the  firm  or  in  the  person  trading  under  the  name  of  a  firm, 
unless  the  intention  of  the  parties  that  such  promise  shall  continue  to  be  binding  not- 
withstanding such  change  shall  appear  either  by  express  stipulation  or  by  necessary 
implication  from  the  nature  of  the  firm  or  otherwise." 

Effect  of  change  infirm  on  its  securities. — Questions  nearly  akin  to 
those  just  alluded  to  arise  where  securities  have  been  deposited  with 
bankers  to  secure  future  advances,  and  a  change  has  occurred  in  the 
banking  firm  befi^re  the  making  of  some  of  the  advances.  Prima 
facie,  the  securities  extend  only  to  those  advances  which  are  made  by 
the  firm  whilst  its  members  continue  the  same  as  when  the  securities 
were  deposited,  [x)  And  similarly,  if  a  partner  pledges  his  separate 
property  for  future  advances  to  be  made  to  his  firm,  and  he  afterwards 
dies,  an  advance  made  after  his  death  to  his  surviving  partners  will 
not  be  chargeable  against  the  property  pledged,  [y)  It  has  even  been 
held  that  if  a  person  deposits  deeds  as  a  security  for  advances  to  be 
made  to  him,  the  security  does  not  cover  advances  made  to  him  and 
his  partners,  {z) 

Equitable  mortgagees. — However,  it  is  established  that  an  equitable 

mortgage  by  deposit  of  title  deeds  may  be  extended,  even  by  parol,  to 

cover  advances  made  after  a  change  in  the  firm  with  which  the  deeds 

,  are  lodged,  (a)     And  although  a  legal  mortgage  to  a  firm  *can- 

-'  not    be   converted    into   an    equitable   mortgage    merely    by 

parol,  (i)  it  may  be  so  converted  by  a  written  agreement,  and  may  as 

(w)  19  and  20  Vict.,  c.  97,  ?  4.     See,  on  See,  too.  Chuck  v.  Freen,  1  Moo.  &  M. 

this  section.  Backhouse  v.  Hall,  6  Best  &  259.     These  cases  turn  on  the  terms  of 

S.  507,  and  6  N.  R.  98,  Q.  B.  the  memoranda  of  deposit,  and  on  the  cir- 

(x)  See  per  Lord  Eldon  in  Ex  parte  cumstances  under  which  the  securities  are 

Kensington,  2  Ves.  &  B.  83.  given. 

(y)  Bank  of  Scotland  i-.  Christie,  8  CI.        (a)  Ex  parte  Lloyd,  1  Glyn  &  J.  389  j 

&  F.  214.  Ex  parte  Lane,  De  G.  300;  and  see  Ex 

(z)  Ex  parte  Mackenna,  3  De  G.,  F.  &  parte  Nettleship,  2  Mont.,  D.  &  D.  124. 
J.  629 ;  Ex  par.te  Freen,  2  Glyn  &  J.  246.        (6)  Ex  parte  Hooper,  2  Eose  328. 

154 


CHAP.  VI.,  §  II.]  LEGAL   VIEW    OF   A    FIRM.  120* 

an  equitable  mortgage  become  available  as  a  security  for  advances 
made  after  a  change  in  the  firm  to  which  the  legal  mortgage  was 
originally  given,  (c)  Owing  to  these  doctrines  a  security  given  to  a 
firm  for  advances  to  be  made  by  it,  is,  upon  a  change  in  the  firm^ 
readily  made  a  continuing  security,  and  a  slight  manifestation  of  in- 
tention on  the  part  of  the  borrower  that  it  should  so  continue,  will 
enable  the  new  firm  to  hold  the  securities  until  the  advances  made  by 
itself,  as  well  as  those  made  by  the  old  firm,  have  been  repaid.  (cZ) 

Lien  of  solieitors. — The  lien  which  a  firm  of  solicitors  has  on  the 
deeds,  &c.,  of  its  clients,  is  not  lost  by  a  mere  change  in  the  firm,  (e) 
But  a  solicitor's  lien  only  attaches  where  the  papers  on  which  the  lien 
is  claimed  have  come  to  the  possession  of  the  very  persons  to  whom 
the  client  is  legally  indebted,  whence  it  follows  that  papers  which  come 
into  the  possession  of  a  firm  after  the  introduction  of  a  new  partner  (/} 
or  the  retirement  of  an  old  one,  (g)  cannot  be  retained  for  a  debt  due 
before  the  change  in  the  firm  took  place.  The  death  of  a  partner  is 
not,  however,  it  is  conceived,  equivalent  to  retirement,  for  the  survivors 
become  the  legal  creditors,  a^id  there  is,  therefore,  no  reason  why  they 
should  not  have  a  lien  for  a  debt  due  to  them  and  their  deceased  part- 
ner on  papers  coming  into  their  possession  after  his  death. 

A  dissolution  of  a  partnership  between  solicitors  operates  as  a  dis- 
charge by  them  of  their  client,  and  any  lien  they  may  have  on  his 
papers  is  subject  to  his  right  to  have  them  handed  over  to  a  fresh 
solicitor  for  the  purpose  of  enabling  him  to  finish  business  of  the  client 
pending  at  the  time  of  dissolution.  (Ji)  7 

(c)  Ex  parte  Parr,  4  Dow  &  C.  426.  mercantile  partnerships.     One  partner  is* 

(d)  See  Ex  parte  Kensington,  2  Ves.  &    liable   upon   the   contracts  made   by  the 

B.  79  ;  Ex  parte  Marsh,  2  Kose  239  ;  Ex  other  within  the  scope  of  the  partnership 
parte  Loyd,  3  Deac.  305 ;  Ex  parte  Alex-  business,  and  for  his  negligence  in  respect 
ander,  1  Glyn  &  J.  409.  to  a  partnership  contract,  and  a  right  of 

(e)  Pelly  v.  Wathen,  7  Hare  351,  af-  action  against  the  firm  survives  against 
firmed,  1  De  G.,  M.  &  G.  16.  the  survivor  alone.     Livingston  v.  Cox,  6 

(/)  Ee  Forshaw,  16  Sim.  121 ;  Pelly  v.  Pa.  St.  360. 

Wathen,  7  Hare  351.  A   dissolution   of    such   a   partnership 

ig)  Vaughan  v.  Vanderstegen,  2  Drew,  does  not  affect  engagements  made  during 

409.  its  existence,  so  far  as  their  clients  are 

{h)  Griffiths  V.  Griffiths,  2    Hare  587 ;  concerned.     Walker  v.  Goodrich,  16  111. 

Kawlinson  v.  Moss,  7  Jur.  (N.  S.)  1053,  V.  341. 

C.  W.  If  such   a  firm   accept  a  retainer,  the 
7.  Partnerships    between     attorneys  contract  is   joint,    and    continues   to    the 

are  subject   to  the  ordinary  incidents  of     termination  of  the  suit,  and  neither  attor- 

155 


120* 


LEGAL   VIEW   OF   A   FIRM. 


[book  I., 


ney  can  be  released  from  the  obligation 
or  responsibilities  assumed,  either  by  a 
dissohition  of  the  firm,  or  any  other  act  or 
agreement  between  tiie  attorneys  them- 
selves, lb.  And  see  Smyth  t.  Harvie, 
31  111.  62. 

Where  one  of  the  partners  receives  a 
retainer,  conducts  the  trial  and  ciiarges 
the  fee  therefor  on  the  books  of  the  firm, 
the  presumption  will  be  of  a  retainer  of 
the  firm,  and  that  the  fee  accrued  to  the 
firm.  Harris  v.  Pearce,  5  Bradw.  (111.) 
622. 

An  attorney  who  has  received  notes  to 
collect  is  individually  responsible  for  care 
and  diligence,  although  he  notifies  his 
client  that  he  has  a  partner  who  attends 
to  the  collecting;  unless  the  client  has 
recognized  the  partnership  in  the  transac- 


tion of  his  business.  Mardis  v.  Shackle- 
ford,  4  Ala.  493.  So,  attorneys  who  are 
partners  are  equally  responsible  for  money 
collected  and  not  paid  over,  though  one 
of  them  had  no  .participation  in  the  par- 
ticular transaction.  Dwight  v.  Simon,  4 
La.  Ann.  490. 

A  claim  was  placed  in  the  hands  of  two 
attorneys,  partners,  for  collection,  a  judg- 
ment obtained,  land  of  the  debtor  sold 
under  execution,  and  redemption  made 
from  the  sale  by  paying  the  money  to  the 
sheriff,  who  paid  it  over  to  one  of  the  at- 
torneys. Prior  to  the  redemption  the  co- 
partnership between  the  attorneys  was 
dissolved.  Held,  that  both  partners  were 
liable  to  the  client  for  the  money  thus  re- 
ceived by  one  of  them  after  dissolution. 
Smyth  V.  Harvie,  31  111.  62. 


156 


CHAP.  VII.]  DURATION   OF   PARTNERSHIP.  121* 


♦CHAPTER  VII.  [*121 

OF  THE   DITRATION   OF   CONTRACTS   OF   PARTNERSHIP — OF  PARTNERSHIPS  AT  WILIi 

AND   FOR   A  TERM. 

Partnerships  at  will  and  for  a  term.  Prima  facie,  partnerships  are 
at  loilL — A  contract  of  partnership  is  determinable  at  the  will  of  any 
one  of  the  persons  who  have  entered  into  it,  provided  it  has  not  been 
agreed  that  the  contract  shall  endure  for  a  specified  time.  In  other 
words,  the  result  of  a  contract  of  partnership  is  a  partnership  at  will, 
unless  some  agreement  to  the  contrary  can  be  proved,  (a)  Such  an 
agreement  may  be  established  as  well  by  direct  evidence  as  by  implica- 
tion from  the  acts  of  the  partners ;  and  it  is  not  possible  to  lay  down 
any  rule  by  means  of  which  the  intention  of  the  partners  on  this  head 
can  be  certainly  ascertained,  where  no  express  agreement  has  been 
come  to.  One  or  two  points,  however,  on  the  subject  have  been  de- 
cided, and  demand  notice.  1 

Effect  of  existence  of  debts. — The  mere  fact  that  a  firm  has  incurred 
debts,  and  charged  its  assets  for  their  payment,  is  no  proof  of  an  agree- 
ment that  the  firm  shall  continue  until  its  debts  are  paid,  for  those 
debts  may  be  paid  as  well  after  as  before  a  dissolution.  (6) 

Effect  of  taking  a  lease. — Again,  the  fact  that  the  partners  have,  for 
partnership  purposes,  taken  land  on  lease  for  a  term  of  years,  is  not 
proof  of  an  agreement  that  the  partnership  between  them  shall  subsist 
for  the  same  period.     This  has  been  decided  on  several  occasions,  (c) 

(a)  See  per  Parke,  J.,  in  Heath  v.  San-        But  where  the  articles  prescribe  a  defi- 

son,  4  B.  &  A.  175  ;  Frost  v.  Moulton,  21  nite  period  for  the  firm's  duration,  this  is 

Beav.  596,  and  the  cases  cited  in  the  fol-  enough,  without  any  prohibition   of   an 

lowino-  notes.  earlier  dissolution,  to  prevent  either  part- 

1.  Duration   of   partnership    as    de-  ner  from  terminating  the  relation  at  will, 

pendent   on  will   of  partner.— Where,  Smith  v.  Mulock,  1  Kobt.  (N.  Y.)  569  ; 

in  a  copartnership  agreement,  no  time  is  S.  C,  1  Abb.  Pr.,  n.   s.,  374.     In   such 

named  for  its  continuance,  and  no  provi-  a  case,  it  requires  something  more  than 

sion  made  for  the  settlement  of  its  concerns  the  mere  will  of  a  party  to  dissolve  it 

upon  dissolution,  it  is  dissolvable  at  the  within  the  term.     Bishop  v.  Breckles,  1 

will  of  either  of  the  partners.     McElvey  Hoffm.  (N.  Y.)  534. 

V.  Lewis,  76  N.  Y.  373  ;  aflSrming  44  Su-        (6)  See  King  v.  The  Accumulative  As- 

per.  Ct.  561 :  Skinner  v.  Tinker,  34  Barb,  surance  Co.,  3  C.  B.,  n,  s.,  151. 
(N.Y.)333;  Pine  v.  Ormsbee,  2  Abb.  (N.        (c)  Featherstonhaugh    v.   Fenwick,   17 

Y.)  Pr.,  N.  s.,  375.  Ves.  307  ;  Jefierys  v.  Smith,  1  Jac.  &  W. 

157 


122*  DURATION    OF    PARTNERSHIP.  [bOOK    I., 

and  tlie  reasons  are  thus  given  by  Lord  Eldon  in  Crawshay  v.  Maule, 
a  leading  case  upon  the  subject : 

"Without  doubt,  in  the  absence  of  express  there  may  be  an  implied  contract  as  to 
the  duration  of  a  partnership,  but  I  must  contradict  all  authority  *if  I  say 
"-'  that  whenever  there  is  a  partnership  the  purchase  of  a  leasehold  interest 
of  longer  or  shorter  duration  is  a  circumstance  from  which  it  is  to  be  inferred  that 
the  partnership  shall  continue  as  long  as  the  lease.  On  that  argument  the  court, 
holding  that  a  lease  for  seven  years  is  proof  of  partnership  for  seven  years,  and  a 
lease  of  fourteen  of  a  partnership  for  fourteen  years,  must  hold  that  if  the  partners 
purchase  a  fee  simple,  there  shall  be  a  partnership  forever.  It  has  been  repeatedly 
decided  that  interests  in  land  purchased  for  the  purpose  of  carrying  on  trade  are  no 
more  than  stock  in  trade."  {d) 

Partner  ships  continued  after  their  terms  are  expired. — Further,  where 
a  partnership,  originally  entered  into  for  a  certain  number  of  years, 
is  continued  after  their  expiration,  and  there  is  no  evidence  as  to  the 
additional  time  for  which  the  partnership  was  to  last,  it  is  treated  as 
having  become  a  partnership  at  will,  and  not  as  having  been  renewed 
for  another  definite  period,  (e)  2 

Duration  of  suhpartner ships. — So,  if  one  of  several  partners  forms 
a  subpartnership  with  a  stranger,  the  fact  that  the  principal  partner- 

301  ;  Alcock  v.  Taylor,  Taml.  506  ;  Bur-  limitation  in  the  articles.  A,  one  partner, 

don  V.  Barkus,  3  Giff.  412,  and,  on  appeal,  transmitted    the  articles  to  B,  the  other, 

4  De  G.,  F.  &  J.  42.  with  a  renewal  endorsed  thereon,  which 

{d)  Crawshay  i'.  Maule,  1  Swanst.  509.  B  agreed  to,  provided   he  should  be  re- 

(e)  Neilson    v.   Mossend   Iron    Co.,    11  lieved  from  his  difBculties  by  the  arrival 

App.  Cas.  298 ;  Featherstonhaugh  v.  Fen-  of  a  certain  ship.     The  ship  arrived,  and 

wick,  17   Ves.   307 ;   Booth   v.  Parkes,  1  B  resumed   his  duties  as  partner.     Held, 

Moll.  465.     See,  also,  Cuffe  v.  Murtagh,  7  thai  the  partnership  was  renewed  for  the 

Ir.  L.  411.  original  term,  though  there  was  no  formal 

2.  Continuing  after  term  has  expired,  renewal. 
— A  partnership  may  be  prolonged,  by  But  a  partnership  is  none  the  less 
express  or  tacit  consent,  beyond  the  time  ended  because  the  party  who,  upon  final 
stated  in  the  articles.  In  that  case,  prima  settlement,  turned  over  to  the  other  as 
/acie,  the  articles  are  still  binding.  Mifflin  cash  certain  drafts  and  notes,  is  to  be  re- 
D.  Smith,  17  Serg.  &  R.  (Pa.)  165.  Thus,  sponsible  for  his  proportion  of  the  debts 
a  written  agreement  as  to  dividing  profits  uncollected  thereon,  or  is  afterwards  em- 
may  be  extended  tacitly  by  the  mutual  ployed  by  the  other  in  making  the  collec- 
under.standing  of  the  parties,  or  by  their  tions ;  nor  because  any  specific  property 
conduct  in  relation  to  it.  Robbins  v.  of  the  firm  remains  unsold,  wherein  each, 
Laswell,  27  111.  36^.  under  the  settlement,  retains  his  propor- 

In  Dickson  v.  Bold  (3  Dessau.  (S.  C.)  tionate    share.      Sharpe    v.  Johnson,  59 

501),  a  partnership  having  expired  by  the  Mo.  557. 

158 


CHAP.  VII.]  DURATION    OF    PARTNERSHIP  123* 

ship  has  been  entered  into  for  a  certain  number  of  years  is  no  proof 
that  the  subpartnership  was  intended  to  last  for  the  same  number  of 
years,  or  for  as  many  of  them  as  were  unexpired  when  the  subpart- 
nership was  formed.  (/) 

Implied  terms  of  duration. — On  the  other  hand,  in  Wheeler  v.  Van 
Wart,  (g)  a  company,  the  duration  of  which  was  not  expressly  fixed, 
was  held  to  be  intended  to  last  at  least  until  after  a  day  appointed  in 
its  deed  of  settlement  for  the  holding  of  a  general  meeting.  And,  in 
Reade  v.  Bentley,  (A)  it  was  considered  that  an  agreement  to  the  effect 
that  a  publisher  should  defray  the  expenses  of  a  work  written  by  an 
author,  and  should  receive  a  percentage  on  the  gross  amount  of  sale, 
-and  that  the  net  profits  of  each  edition  should  be  divided  equally 
between  both  parties,  amounted  to  an  agreement  for  a  joint  adventure 
between  the  author  and  the  publisher  for  so  long  as  might  be  necessary 
to  dispose  of  a  complete  edition  ;  and  that  the  publication  of  every  new 
edition  prolonged  the  partnership)  until  that  edition  should  *be  r-^ 
disposed  of;  but  that  when  any  edition  was  exhausted  either  ■- 
party  was  free  to  discontinue  the  joint  adventure.  3 

Cause's  of  dissolution. — The  right  to  rescind  a  partnership  contract 
for  fraud  or  misrepresentation  will  be  discussed  hereafter  in  book  III. ; 
and  the  right  to  dissolve  a  partnership,  or  to  have  it  dissolved,  and  the 
consequences  of  its  dissolution  will  be  examined  in  book  IV. 

(/)  Frost  V.  Moulton,  21  Beav.  596.  the  court  would  not  decide  whether  any 

(g)  9  Sim.  193,  and  better  in  2  Jur.  252.  condition  or  limitation  as  to  the  duration 

(A)  4  Kay  &  J.  656 ;  and  3  Id.  271.  of  a  partnership  can  be  engrafted  on  the 

3.  Implied  terms  of  duration. — "  In  partnership    contract,  as    an  implication 

the  absence  of  an  express  there  may  be  an  from  its  nature. 

implied  contract  as  to  the  time  for  which  In  Magill  v.  Merrie  (5  B.  Mon.  (Ky.) 

a  partnership  shall  endure  (Crawshay  v.  168),  it  was  provided,  in  a  contract  of  dis- 

Maule,  1  Swanst.  508),  and  where  that  is  solution,  that  one  partner  was  to  withdraw 

the   case,  the  partnership  cannot  be  de-  and  be  paid   a  proportion  of  the  profits 

Btroyed  by  the  act  of  the  party  until  the  when  the    estimates  were    made.      Held, 

contemplated   period  arrives."      Gow  on  that  such  a  one  continued  to  be  a  partner 

Part.  278.  until  the  estimates  were  made. 
In  Walker  v.  Whipple  (58  Mich.  476), 

159 


n24]  *BOOK  II. 


OF  THE  EIGHTS   AND  OBLIGATIONS  OF  PAKTNERS  AS  REGARDS 

NON-PARTNERS. 


CHAPTER  I. 


OV  THE  LIABILITIES  OF  PARTNERS  FOR  THE  ACTS  OF  EACH  OTHER. 


Section  I. — General  Principles  of  Agency  as  Applied  to  Ordinary 

Partnerships,  *124. 
Section  II. — Liabilities  of  Partners  in  Respect  of  Acts  which  are 

Neither  Torts  nor  Frauds,  *128. 
Section  III. — Liability  of  Partners  in  Respect  of  Torts  and  Frauds, 

*147. 
Section  IV. — Liability  of  Partners  in  Respect  of  Acts  which  are 

Unauthorized,  and  are  Known  so  to  be,  *167. 
Section  V. — Of  the  Liability  of  Partners  in  Respect  of  Contracts 

not  Entered  into  on  Behalf  of  the  Firm,  or  not  so 

IN  Proper  Form,  *176. 
Section  VI. — Liability  of  Partnerships  in  Respect  of  Contracts  not 

Binding  on  them,  but  op  which  they  have  had  the 

Benefit,  *189. 


SECTION    I. — GENERAL    PRINCIPLES    OF    AGENCY    AS    APPLIED    TO 
ORDINARY  PARTNERSHIPS. 

Each  partner  the  agent  of  the  firm. — Every  member  of  an  ordinary 
partnership  is  its  general  agent  for  the  transaction  of  its  business  in 
the  ordinary  way ;  and  the  firm  is  responsible  for  whatever  is  done 
by  any  of  the  partners  when  acting  for  the  firm  within  the  limits  of 

160 


CHAP.  I.,  §  I.J     AUTHORITY  OF  ONE  PARTNER.  124* 

the  authority  conferred  by  the  nature  of  the  business  it  carries  on.  (a) 
Whatever,  as  between  the  partners  themselves,  may  be  the  limits  set 
to  each  other's  authority,  every  person  not  acquainted  with  those  limits 
is  entitled  to  assume  that  each  partner  is  empowered  to  do  for  the  firm 
whatever  is  necessary  for  the  transaction  of  its  business,  in  the  way  in 
which  that  business  is  ordinarily  carried  on  by  other  people.  (6)  But 
no  person  is  entitled  to  assume  that  any  partner  has  a  more  extensive 
authority  than  that  above  described. 

The  consequences  of  this  principle  are — 

1.  Qeneral  rules. — That  if  an  act  is  done  by  one  partner  on  behalf 
of  the  *firra,  and  it  was  necessary  for  carrying  on  the  partner-  i-:,.-.^- 
ship  business  in  the  ordinary  way,  the  firm  will  prima  facie 

be  liable,  although,  in  point  of  fact,  the  act  was  not  authorized  by  the 
other  partners. 

2.  That  if  an  act  is  done  by  one  partner  on  behalf  of  the  firm,  and 
it  was  not  necessary  for  carrying  on  the  partnership  business  in  the 
ordinary  way,  the  firm  will  prima  facie  be  not  liable. 

In  the  first  case,  the  firm  will  be  liable  unless  the  one  partner  had, 
in  fact,  no  authority  to  bind  the  firm,  and  the  person  dealing  with  him 
was  aware  of  that  want  of  authority ;  whilst  in  the  second  case  the 
firm  will  not  be  liable  unless  an  authority  to  do  the  act  in  question,  or 
some  ratification  of  it,  can  be  shown  to  have  been  conferred  or  made 
by  the  other  partners,  (c)  1 

(a)  The  case  is  different  with  mere  part  that  one  partner  has  a  right  to  bind  the 

ownerships.     Bari?ou  v.  Williams,  5  B.  &  firm  to  any  extent  in  contracts  for  the  use 

A.  395;  Helme  v.  Smith,  7  Bing.  709.  of  the  partnership.  Manuf.  and  Mechanics 

(6)  See  per   James,   L.  J,  in   Baird's  Bank  v.  Gore,  15  Mass.  75 ;  Boardman  v. 

Case,  5  Ch.  733,  and    per  Parke,  B.,  in  Gore,  Id.  331 ;  Pearson  v.  Post,  2  Dak.  T. 

Hawken  v.  Bourne,  8  Mees.  &  W.  710.  220;  Hall  v.  Cook,  69  Ala.  87;   Hall  v. 

The  fact  that  one  partner  ordinarily  at-  Green,   Id.  368;  Galloway  v.  Hughes,  1 

tends  to  one  branch  of  the  business  does  Bailey   (S.  C.)  553 ;   Storer  v.   Hinkley, 

not  prevent  his  binding  the  firm  when  Kirby  (Conn.)  147. 

acting  out  of  his  own  department.    Morans        A    leading   case    upon    this    subject   is 

I'.  Armstrong,  Arms.,  M.  &  O.  Ir.  N.  P.  Winship  v.  Bank  of  United  States  (5  Pet. 

Rep.  25.  (U.  S.)  529),  where  Marshall,  C.  J.,  said 

(c)  See  Dickinson  V.  Valpy,  10  Barn.  &  (p.  561):  "Partnerships,  for  commercial 

C.  128,  and  Crellin  v.  Brook,  14  Mees.  &  purposes,  for  trading  with  the  world,  for 

W.  11,  where  there  was  sufficient  ratifica-  buying  and  selling  from  and  to  a  great 

tion.  number   of   individuals,   are   necessarily 

1.    Each    partner   the   agent    of  the  governed    by    many   general    principles, 

others,  generally.— The  general  rule  is  which   are   known  to  the    public,  which 

161  11 


125*                                      DOCTRINES   OF   AGENCY.  [bOOK    II., 

Secret  partnerships.  Authority  of  dormant  partner. — The  doctrine 
that  each  member  of  any  ordinary  firm  is  its  implied  agent  for  the 
transaction  of  its  business  in  the  ordinary  way,  is  generally  laid  down 
without  qualification.  But  it  is  questionable  whether  this  rule  applies 
to  a  case  in  which  a  person  who  happens  to  be  a  member  of  a  firm, 

subserve  the  purpose  of  justice,  and  wliich  partners  are  identified  with  the  company 
society  is  concerned  in  sustaining.  One  and  have  power  to  conduct  its  usual  busi- 
of  these  is  tliat  a  man  who  shares  in  the  ness  in  the  usual  way.  This  power  is  con- 
profit,  although  his  name  may  not  be  in  ferred  by  entering  into  the  partnership, 
the  firm,  is  responsible  for  all  its  debts,  and  is  perhaps  never  to  be  found  in  the 
Another,  more  applicable  to  the  subject  articles.  If  it  is  to  be  restrained,  fair  deal - 
under  consideration,  is  that  a  partner,  cer-  ing  requires  that  the  restriction  should  be 
tainly  the  acting  partner,  has  power  to  made  known.  These  stipulations  may 
transact  the  whole  business  of  the  firm,  bind  the  partners ;  but  ought  not  to  affect 
whatever  that  may  be,  and  consequently  those  to  whom  they  are  unknown,  and 
to  bind  his  partners  in  such  transactions,  who  trust  to  the  general  and  well  estab- 
as  entirely  as  himself.  This  is  a  general  lished  commercial  law." 
power,  essential  to  the  well  conducting  of  Thus,  one  partner  may  transfer  or  assign 
business,  which  is  implied  in  the  exist-  a  chose  in  action,  or  a  debt  due  to  the  part- 
ence  of  a  partnership.  When,  then,  a  nership,  or  any  other  partnersiiip  effects, 
partnership  is  formed  for  a  particular  so  far  as  the  same  can  be  transferred  or  as- 
purpose,  it  is  understood  to  be  in  itself  a  signed  in  law.  Quinert;.  Marblehead  Ins. 
grant  of  power  to  the  acting  members  of  Co.,  10  Mass.  476;  Lamb  v.  Durant,  12  Id. 
the  company  to  transact  its  business  in  the  54;  CuUum  v.  Bloodgood,  15  Ala.  34;  Har- 
usuai  way.  If  that  business  be  to  buy  and  rison  v.  Sterry,  5  Cranch  (U.  S.)  289  ;  An- 
sell,  then  the  individual  buys  and  sells  derson  w.  Tompkins,  1  Brock.  (U.  S.)  456 ; 
for  the  company,  and  every  person  with  Mills  v.  Barber,  4  Day  (Oonn.)  428;  Ran- 
whom  he  trades  in  the  way  of  its  business  dolph  Bank  v.  Armstrong,  11  Iowa  515; 
has  a  right  to  consider  him  as  the  com-  Fromme  v.  Jones,  13  Iowa  474 ;  United 
pany,  whoever  may  compose  it.  It  is  StatesBankf.  Binney,  5Mason(U.  S.)  176  ; 
usual  to  buy  and  sell  on  credit;  and,  if  it  Hodges  v.  Harris,  6  Pick.  (Mass.)  360; 
be  so,  the  partner  who  purchases  on  credit  Halsey  v.  Whitney,  4  Mason  (U.  S.)  206  ; 
in  the  name  of  the  firm  must  bind  the  firm.  Clark  v.  Rives,  33  Mo.  579;  BosWell  v. 
This  is  a  general  authority  held  out  to  Green,  1  Dutch.  (N.  J.)  390;  McClelland 
the  world,  to  which  the  world  has  a  right  v.  Remsen,  36  Barb.  (N.  Y.)  622  ;  14  Abb. 
to  trust.  The  articles  of  copartnership  Pr.  331  ;  23  How.  Pr.  175. 
are  perhaps  never  published.  They  are  Each  member  of  a  partnership  is,  in 
rarely  if  ever  seen,  except  by  the  partners  contemplation  of  law,  the  general  agent 
themselves.  The  stipulations  they  may  of  the  firm,  and  has  power  to  bind  his  co- 
contain  are  to  regulate  the  conduct  and  partners  by  acts  done  within  the  scope  of 
rights  of  the  parties  as  between  them-  the  business  of  the  partnership.  Loudon, 
selves.  The  trading  world,  with  whom  &c.,  Society  v.  Hagerstown,  &c.,  Bank,  36 
the  company  is  in  perpetual  intercourse,  Pa.  St.  498.  This  authority  on  tiie  part 
cannot  individually  examine  these  arti-  of  one  partner  arises  from  the  confidential 
cles,  but  must  trust  to  the  general  powers  nature  of  the  partnership  relation.  Brew- 
contained  in  all  partnerships.    The  acting  ster  v.  Hardeman,  Dudley  (Ga.)  138. 

162 


CHAP.  I.,  §  I.]     AUTHORITY  OF  ONE  PARTNER. 


125^ 


but  who  is  not  known  to  be  such,  and  who  has,  in  fact,  no  authority 
to  act  for  it,  takes  upon  himself  so  to  do.  Real  authority  is  excluded 
by  hypothesis,  and  it  is  difficult  to  see  from  what,  in  such  a  case,  any 
authority  can  be  implied.  If,  indeed,  he  was  known  to  be  a  partner, 
whether  by  his  own  representations  or  otherwise,  his  authority  to  act 
for  the  firm  would  be  properly  inferred.  But  the  case  supposed  ex- 
cludes all  knowledge  of  his  position,  and  under  such  circumstances  it 
is  conceived  there  can  be  no  apparent  as  distinguished  from  real 
authority,  (d) 

Partnerships  between  attorneys  are  sub-  5  Pa.  St.  274. 

ject  to  the  incidents  to  mercantile  part-  Whenever  there  are  written  articles  of 

nerships;  and  one  partner  is  liable  upon  agreement  between  partners,  their  power 

the  contracts  mads  by  the  other  within  and  authority,  between  themselves,  are  to 

the  scope  of  the  partnership  business,  and  be  ascertained  and  regulated  by  the  terms 

for  his  negligence  in  respect  to  a  partner-  and  conditions  of  the  written  stipulations, 

ship  contract,  and  a  right  of  action  against  But,  independently  of  any  such  stipula- 

the   firm    survives   against   the   survivor  tion,  each  partner  possesses  an  equal  and 

alone.     Livingston  v.  Cox,  6  Pa.  St.  360.  general  power  and  authority,' in  behalf  of 

Another  way  of  stating  the  general  rule  the  firm,  to  transact  any  business  within 

is  that  the  presumption  is  that  contracts  the  scope  and  objects  of  the  partnership, 

made  by  a  partner  are  made  on  account  and  in  the  course  of  its  trade  and  business, 

of  the  partnership,  and  the  firm  will  be  Kimbro  v.  Bullitt,  22    HOw.  (U.  S.)  256. 

bound    thereby,  unless   the   parties  with  Thus,  a  written  contract  of  partnership,  in 

whom    he   contracts   know  the    contrary  an  adventure  limited  to  certain  specified 

(Le  Roy,  Bayard  &  Co.  v.  Johnson,  2  Pet.  transactions,  and   to  some  definite  dura- 

(U.  S.)  198  ;  Rochester  v.  Trotter,  1  A.  K.  tion,  does  not  give  to  the  partners  such 

Marsh.  (Ky.)  54),  and  this,  whatever  their  power  to  bind  the  firm  as  is  possessed  in 

liability    intei-    sese    may    be.     White    v  cases  of  permanent  and  general  mercan- 

Xearnev,  2  La.  Ann.  639.  tile    transactions.     Toof    v.    Duncan,    45 

Thus,  where  the  several  obligees  in  a  Miss.  48. 
bond  constitute  a  partnership,  a  delivery  In  private  associations,  the  majority 
to  one  is  a  delivery  to  ali.  Moss  v.  Rid-  cannot  bind  the  minority  without  special 
<31e  5  Cranch  (U.  S.)  351.  agreement,  except  in  the  case  of  partner- 
But  while  every  partner  is  in  a  sense  ships  and  ship-owners.  Livingston  v. 
a  general  agent  of  the  firm,  a  firm  is  Lynch,  4  Johns.  (N.  Y.)  Ch.  573.  Never- 
not  necessarily  the  agent,  general  or  spe-  theless,  the  acts  of  the  trustees  of  an  unin- 
cial  of  any  other  firm  in  which  either  corporated  association,  done  in  good  faith, 
of  its  members  is  a  partner.  Wright  v.  and  within  the  scope  of  their  authority, 
Ames,  4  Abb.  (N.  Y..)  App.  Dec.  644.  So,  are  binding  upon  the  stockholders  indi- 
where  the  same  person  is  a  partner  in  vidually,  in  a  suit  against  them  by  a  cred- 
two  firms,  his  acts,  done  in  the  name  of  itor  of  the  company,  under  the  statute, 
one  firm,  cannot  be  proved  in  an  action  Slee  v.  Bloom,  20  Johns.  (N.  Y.)  669. 
against  the  other,  the  same  persons  not  {d)  See  the  judgment  of  Cockburii,  C. 
comprising  both  firms.     Kratzer  v.  Lyon,    J.,  in  Nicholson   v.  Ricketts,  2  El.  &  E. 

163 


125*  DOCTRINES   OF    AGENCY.  TbOOK    II., 

Liability  of  dormant  partners. — Again,  with  respect  to  the  liability 
of  dormant  partners,  a  distinction  must  be  drawn  between — first,  un- 
disclosed principals  who  carry  on  a  business  by  partners  or  agents ; 
and,  secondly,  persons  who  simply  share  the  profits  of  a  business 
carried  on  by  others  on  their  own  account,  i.  e.,  as  principals  only,  and 

^  *not  as  agents  for  those  who  share  their  profits.     In  the  first 

*126l  • 

^  case  the  dormant  partners  are  liable  for  whatever  may  be  done 

by  their  partners  and  agents  in  the  course  of  transacting  the  business 

in  the  ordinary  way  ;  but  in  the  second  case  the  so-called  dormant 

partners  are  not  principals  at  all ;   the  persons  who  carry  on  their 

business  do  not  carry  it  on  as  their  agents,  either  really  or  apparently, 

and  the  doctrines  applicable  to  undisclosed  principals  are  altogether 

excluded,  {e)  2 

524,  and  of  Cleasby,  B.,  in  Holme  I'.  Ham-  those  whose  names  are  in  the  firm.     This 

mond,  L.  R.,  7  Ex.  233.  distinction  seems  to  be  founded  on  the 

(e)  This  distinction  is  rendered  neces-  idea  that  if  partners  are  not  openly 
sary  by  the  decision  of  the  House  of  Lords  named  the  resort  to  them  must  be  con- 
in  Cox  V.  Hickman.  See  ante  pp.  *30,  et  nected  with  some  knowledge  of  the  secret 
seq.  stipulations  between  the  partners,  which 

2.  How  far  the  rule  applies  to  dor-  may  be  inserted  in  the  articles.  But  this 
mant  partners. — In  the  case  of  Winship  v-  certainly  is  not  correct.  The  responsibility 
Bank  of  United  States  (5  Pet.  (U.  S.)  562),  of  unavowed  partners  depends  on  the  gen- 
Marshall,  C.  J.,  says,  in  continuation  of  his  eral  principles  of  commercial  law,  not  on 
remarks  quoted  in  the  preceding  note  (p.  the  particular  stipulation  of  the  articles.  It 
*125) :  "  The  counsel  for  the  plaintiff  in  has  been  supposed  that  the  principles  laid 
errorsupposes  that  though  these  principles  down  in  the  third  instruction  respecting 
may  be  applicable  to  an  open,  avowed  part-  these  secret  restrictions  are  inconsistent 
nership,  they  are  inapplicable  to  one  that  is  with  the  opinion  declared  in  the  first; 
secret.  Can  this  distinction  be  maintained?  that  in  this  case,  where  the  articles  were 
If  it  could,  there  would  be  a  difference  before  the  court,  the  question  whether  this 
between  the  responsibility  of  a  dormant  was,  in  its  origin,  a  secret  or  an  avowed 
partner  and  one  whose  name  was  to  the  partnership,  had  become  unimportant., 
articles.  But  their  responsibility  in  all  If  this  inconsistency  really  existed,  it 
partnership  transactions  is  admitted  to  be  would  not  affect  the  law  of  the  case,  unless 
the  same.  Those  who  trade  with  a  firm  the  judge  had  laid  down  principles  in  the 
on  the  credit  of  individuals,  whom  they  one  or  the  other  instruction  which  might 
believe  to  be  members  of  it,  take  upon  affect  the  party  injuriously.  But  it  does 
themselves  the  hazard  that  their  belief  is  not  exist.  The  two  instructions  were 
well  founded.  If  they  are  mistaken,  they  given  on  diflTerent  views  of  the  subject, 
must  submit  to  the  consequences  of  their  and  apply  to  different  objects.  Tlie  first 
mistake  ;  if  their  belief  be  verified  by  the  respected  the  parties  to  the  firm  and  their 
fact,  their  claims  on  the  partners  who  liability,  whether  they  were  or  were  not 
were   not   ostensible  are   as  valid  as  on  known  as  members  of  it ;  the  last  applies- 

164 


CHAP.  I.,  §  I.]     AUTHORITY  OF  ONE  PARTNER.  126* 

Necessity  the  limit  of  authority. — It  will  be  observed  that  what  is 
necessary  to  carry  on  the  partnership  business  in  the  ordinary  way  is 
made  the  test  of  authority  where  no  actual  authority  or  ratification  can 
be  proved.  This  is  conformable  to  the  most  recent  aud  carefully  con- 
sidered decisions ;  but  by  adopting  it,  the  liability  of  a  firm  for  the 
acts  of  its  copartners  is  not  so  extensive  as  non-lawyers  sometimes 
imagine.  The  act  of  one  partner  to  bind  the  firm  must  be  necessary 
for  the  carrying  on  of  its  business,  if  all  that  can  be  said  of  it  was 
that  it  was  convenient,  or  that  it  facilitated  the  transaction  of  the  busi- 
ness of  the  firm,  that  is  not  sufficient  in  the  absence  of  evidence  of 
sanction  by  the  other  partners.  (/) 

Extraordinary  necessity. — Nor,  it  seems,  will  necessity  itself  be  suffi- 
cieut  if  it  be  an  extraordinary  necessity.  What  is  necessary  for  carry- 
ing on  the  business  of  the  firm  under  ordinary  circumstances  and  in 
the  usual  way  is  the  test ;  and  therefore,  in  a  case  where  the  nature  of 
the  business  was  one  in  which  there  was  no  necessity  to  borrow  money 
to  carry  it  on  under  ordinary  circumstances  and  in  the  ordinary  man- 
ner, the  court  held  the  firm  not  liable  for  money  borrowed  by  its  agent 
under  extraordinary  circumstances,  although  money  was  absolutely 
requisite  to  save  the  property  of  the  firm  from  ruin,  (g)  This  case  is 
an  authority  for  saying  that  a  power  to  do  what  is  usual  does  not 

to    secret    restrictions    on   the    partners,  secret  partner  who  did  not  sign  it ;  but  he 

which  change  the  power  held  out  to  the  is  not  liable  unless  the  money  came  to  the 

world  by   tiie  law   of  partnership.     The  use  of  the  firm.     Bank  of  Alexandria  v. 

meaning  of  the  terms  '  secret  partnership,'  Mandeville,  1  Cranch  (U.  S.)  C.  C.  575. 

or  the  question  whether  this  did  or  did  But  while,  by  the  law  merchant,   one 

not  come  within  the  definition  of  a  secret  may  be  answerable  as  a  dormant  partner 

partnership,  might  be  unimportant ;  and  on  a  contract  made  by  the  partnership  of 

yet  the  question  whether  a  private  agree-  which  he  is  in  fact  a  member;  this  law  is 

ment  between  the  partners,  limiting  their  confined  to  trade  and  commerce,  and  does 

responsibility,    was    known    to  a   person  not  extend  to  speculations  in  the  purchase 

trusting  the  firm,  might  be  very  import-  and  sale  of   lands ;    for  where  lands  are 

ant."  sold,  no  man,  as  a  dormant  partner,  can 

The  credit  given  in  such  a  ease,  though  claim  any  part  of  the  lands  by  virtue  of 

manifestly  given  to  the  ostensible  partner,  any  conveyance  to  which  he  is  not,  on  the 

is  net  to  be  presumed  to  be  exclusive,  but  face  of  it,  a  party.     Pitts   v.  Waugh,  4 

all  for  whom  such  partner  acts,  if  in  their  Mass.  424. 

business   and    for   their    benefit,    will   be  (/)  See  Brettel  u.  Williams,  4  Ex.  630. 

liable.     Richardson  v.  Farmer,  36  Mo.  35.  (g)  See  Hawtayne  v.  Bourne,  7  Mees.  & 

In  Virginia   an    action  may  be  main-  W.  595 ;  and  see  Ex  parte  Chippendale,  4 

tained  upon  a  promissory  note  against  a  De  G.,  M.  &  G.  19. 

165 


126*  DOCTRINES   OF  AGENCY.  [bOOK   II., 

include  a  power  to  do  what  is  unusual,  however  urgent;  and  although 
in  the  case  referred  to  the  money  was  not  borrowed  by  a  partner,  but 
by  a  person  who  was  only  an  agent  of  the  firm,  the  decision  would,  it 
is  apprehended,  have  *been  the  same  if  he  had  been  a  partner. 
For  notwitiistanding  the  fact  that  every  partner  is  to  a  certain  '- 
extent  a  principal  as  well  as  an  agent,  the  liability  of  his  copartners 
for  his  acts  can  only  be  established  on  the  ground  of  agency.  As  their 
agent  he  has  no  discretion  except  within  the  limits  set  by  them  to  his 
authority,  and  the  fact  that  he  is  himself,  as  one  of  the  firm,  a  princi- 
pal, does  not  warrant  him  in  extending  those  limits,  save  on  his  own 
responsibility.  (Ii)  3 

{h)  See   Ricketts   v.   Bennett,    4   C.  B.  in  the  management  of  their  business,  and 

686,  and  Dickinson  v.  Valpy,  10  Baru.  &  that  consequently  the  other  partners  were 

C.  128.  bound  by  his  act.    Woodward  v.  Winship, 

3.  Discretion  in  urgent  cases. —  12  Pick.  (Mass.)  430. 
While  it  is  a  rule  of  general  application  In  Const  v.  Harris  (Turn.  &  R.  496, 
that  in  the  absence  of  a  special  agreement,  525),  Lord  Eldon  says:  "  I  call  that  the 
neither  partner  can  make  any  contract  act  of  all  which  is  the  act  of  the  majority, 
beyond  the  commercial  custom  of  the  provided  all  are  consulted,  aad  the  major- 
business  of  the  firm,  without  the  consent  ity  are  acting  bona  fide,  meeting  not  for 
of  the  other  (Chandler  v.  Sherman,  16  the  purpose  of  negativing  what,  when 
Fla.  99),  if  that  other  can  be  consulted  they  are  met  together,  they  may,  after  due 
beforehand ;  still,  if  he  cannot  be  con-  consideration,  think  proper  to  negative, 
suited,  and  the  exigencies  of  the  case  For  a  majority  to  say,  '  We  do  not  care 
render  it  necessary  for  the  partner  on  the  what  one  partner  may  say,  we,  being  the 
spot  to  act,  he  may  generally  do  so.  Ex  majority,  will  do  what  we  please,'  is,  I 
parte  Daniels,  14  R.  I.  500.  apprehend,  what   this  court   will  not  al- 

Thus,  in  Hunter  v.  Wayrick  (67  Iowa  low."  And  at  page  527,  he  continues  :"  In 

555),  where  a  partner,  who  did   not,  but  all  partnerships,  whether  it  is  expressed 

who  might  have  consulted  his  copartner  in  the  deed  or  not,  the  partners  are  bound 

by  mail  or  telegraph,  without  his  knowl-  to   be   true   and   faithful   to    each   other, 

edge  or  consent  sold  the  entire  property  They  are  to  act  upon  the  joint  opinion  of 

of  the  firm  to  one  who  knew  the  facts,  it  all,  and  the  discretion  and  judgment  of 

was  held  that  the  absent   partner  could  any    one     cannot     be    excluded.      What 

repudiate  the  sale.  weight   is   to   be  given    to  it   is    another 

On  the  other  hand,  where  one  partner  question.     The  most  prominent  point  on 

in  a  firm  organized  for  a  particular  busi-  which  the  court  acts,  in  appointing  a  re- 

ness  does  an  act  on  account  of  the  firm  ceiver  of  a  partnership    concern,  is   the 

which  is  prima  facie  beyond  the  scope  of  circumstances  of  one  partner  having  taken 

his   authority,  it   is   competent   to   show  upon     himself    the    power     to     exclude 

that  in  the  exercise  of  good  fail h  and  rea-  another  partner  from  as  full  a  share  in 

Bonable  discretion  he  was  waranted  in  so  the  management  of  the  partnership,  as  he, 

doing  by  the  course  pursued  by  the  firm  who  assumes  that  power,  himself  enjoys." 

166 


CHAP.  I.,  §  I.]     AUTHORITY  OP  ONE  PARTNER.  127* 

Nature  of  the  business  the  test  of  necessity. — The  question  whether 
a  given  act  can  or  cannot  be  said  to  be  necessary  to  the  transaction  of 
a  business  in  the  way  in  which  it  is  usually  carried  on,  must  evidently 
be  determined  by  the  nature  of  the  business,  and  by  the  practice  of 
persons  engaged  in  it.  Evidence  on  both  of  these  points  is,  therefore, 
necessarily  admissible,  and,  as  may  readily  be  conceived,  an  act  which 
is  necessary  for  the  prosecution  of  one  kind  of  business  in  the  ordinary 
way  may  be  wholly  unnecessary  for  carrying  on  another.  Conse- 
quently, no  answer  of  any  value  can  be  given  to  the  abstract  question 
— Can  one  partner  bind  his  firm  by  such  and  such  an  act? — unless, 
having  regard  to  what  is  usual  in  business,  it  can  be  predicated  of  the 
act  in  question  either  that  it  is  one  without  which  no  business  can  be 
carried  on,  or  that  it  is  one  which  is  not  necessary  for  carrying  on  any 
business  whatever.  There  are  obviously  very  few  acts  of  which  any 
such  assertions  can  be  truly  made.  The  great  majority  of  acts,  and, 
practically,  all  which  giv^e  rise  to  doubt  are  those  which  are  necessary 
in  one  business  and  not  in  another.  Take,  for  example,  negotiable 
instruments ;  it  may  be  necessary  for  one  member  of  a  firm  of  bankers 
to  draw,  accept  or  endorse  a  bill  of  exchange  on  behalf  of  the  firm, 
and  to  require  that  each  member  should  put  his  name  to  it  would  be 
ridiculous ;  but  it  by  no  means  follows,  nor  is  it,  in  fact,  true,  that 
there  is  any  necessity  for  one  of  several  solicitors  to  possess  a  similar 
power,  for  it  is  no  part  of  the  ordinary  business  of  a  solicitor  to  draw, 
accept  or  endorse  bills  of  exchange.  The  question,  therefore,  Can  one 
partner  bind  the  firm  by  accepting  bills  in  its  name?  admits  of  no 
*1 9sl  general  answer ;  the  nature  of  the  business  and  *the  practice 
of  those  who  carry  it  on  (usage  or  custom  of  the  trade)  must 
be  known  before  any  answer  can  be  given,  (i)  4 

The  question  when  the  agency  of  a  partner  begins  and  ends  will  be 
examined  hereafter,  see  book  II.,  ch.  2,  §  3. 

(t)  See  Hogarth  v.  Latham,  3  Q.  B.  D.  duced  that  he  knew  of  the  transaction  and 

643 ;  Taunton  v.  Royal  Ins.  Co.,  2  Hem.  assented   to    it.     Goodman   v.   White,  25 

&M.  135.  Miss.  163;    Steagale  v.  Coney,   49  Miss. 

4.  Nature  of  the  business  the  test  of  761 ;  Hotdiin  v.  Kent,  8  Mich.  526  ;  Cay- 

the  power   to  bind  — One  member  of  a  ton   v.   Hardy,    27    Mo.   536 ;    Welles    v. 

copartnership  cannot  be  made  liable  for  March,  30  N.  Y.  344;  Bell  v.   Faber,   1 

the  act  or  undertaking  of  another,  in  a  Grant  (Pa.)  Cas.  31 ;  Nichols  v.  Hughes, 

transaction  not  embraced  in  their  original  2  Bailey  (S.  C.)  109 ;  Scott  v.  Bandy,  2  Head 

partnership  business,  unless  proof  is  ad-  (Tenn.)  197 ;  Venable  v.  Levick.  Id.  351. 

167 


128^ 


IMPLIED    POWERS    OF    PARTNERS. 


[book  II., 


SECTION  II. — LIABILITIES  OF  PARTNERS  IN  RESPECT  OF  ACTS  WHICH 
ARE  NEITHER  TORTS  NOR  FRAUDS. 

Having  noticed  the  general  principles  determining  the  extent  to 
wlijch  one  partner  is  the  agent  of  the  firm,  it  is  proposed  to  examine 


Speculative  dealings  in  "futures"  by 
one  partner  in  a  firm  dealing  in  grain,  are 
not  to  be  deemed  within  the  scope  of  the 
business.     Irwin  v.  Williar,  110  U.  S.  499. 

The  authority  of  partners  to  bind  each 
other  is  not  fixed  by  tlie  articles  of  copart- 
nership, but  by  the  character  of  their  deal- 
ings, and  the  manner  in  which  they  hold 
themselves  out  to  the  world.  Catlin  v. 
Gilders,  3  Ala.  536. 

It  is  proper  to  show  the  general  busi- 
ness of  a  firm  as  bearing  upon  the  ques- 
tion whether  certain  acts  of  one  partner 
bind  them.  Saltmarsh  v.  Bower,  34  Ala. 
613. 

Thus,  a  farming  partnership  confers  no 
authority  on  one  partner  to  carry  on  in 
the  firm  name  a  store  for  the  sale  of  mer- 
chandise.    Humes  v.  O'Bryan,  74  Ala.  64. 

In  law  partnerships  either  partner  may 
attend  to  business  intrusted  to  the  firm. 
But  if  a  firm  contract  with  a  client  for  the 
personal  services  of  a  particular  partner, 
and  he  fails  to  perform  them,. it  is  a  breach 
of  contract;  yet  the  damages  for  such 
breach  will  be  but  nominal,  if  another 
party  shall  perform  the  duty  with  due 
professional  skill,  and  without  injury  to 
the  client.     Smith  v.  Hill,  13  Ark.  173. 

A  copartnership  formed  to  transport 
passengers  and  their  baggage,  by  a  line 
of  stages,  does  not,  from  the  mere  nature 
of  the  business,  authorize  one  of  the  part- 
ners to  bind  tlie  firm  by  an  agreement 
that  he  will  convey  a  person  a  certain 
distance  in  a  specified  time.  Walcott  v. 
Garfield,  3  Conn.  194. 

A  declaration  alleged,  in  brief,  as  fol- 
lows :  The  defendants,  as  partners,  were 


engaged  in  the  sale  of  drugs  and  medi- 
cines in  the  city  of  Macon,  and  were  in- 
debted to  plaintiff  in  the  sum  of  $130.12, 
with  interest.  The  plaintiff  was  employed 
by  them  as  a  clerk,  and  while  so  employed, 
he  was  the  owner  of  a  formula  for  "  Rus- 
sel's  Axle  Grease."  After  making  and 
selling  this  preparation  for  some  time, 
one  of  the  members  of  the  firm  volun- 
tarily told  him  that  he  would  allow  him 
a  liberal  royalty  on  the  sale  of  the  prepa- 
ration, whereupon  ho  compounded  and 
sold  it  solely  for  the  defendants,  giving 
them  all  the  profits.  The  plaintiff  sold  a 
quantity  stated.  The  agreement  fixed  no 
amount  as  the  plaintiff's  royalty.  He 
was  reasonably  entitled  to  half  the  net 
profits.  Held,  no  cause  of  action ;  the 
only  liability,  if  any,  being  that  of  an  in- 
dividual member  of  the  firm,  based  on  a 
promise  without  valuable  consideration. 
There  was  nothing  on  which  an  amend- 
ment could  be  founded.  Lamar  v.  Rus- 
sel  (Ga.),  2  S.  E.  Rep.  467. 

Where  one  deals  with  a  partner  in  a 
matter  not  within  the  scope  of  the  firm 
business,  the  law  presumes  that  he  deals 
with  him  in  his  individual  capacity. 
Davis  ».  Blackwell,  5  Bradw.  (111.)  32. 

Partners  in  the  practice  of  medicine  are 
not  jointly  liable  for  the  expenditures  of 
each  other  having  no  connection  with 
their  partnership  business  as  physicians. 
Thompson  v.  Howard,  2  Ind.  245. 

In  order  to  establish  that  a  commercial 
partnership  is  not  bound  by  the  act  of 
one  of  the  partners,  in  any  particular 
matter,  it  is  necessary  expressly  to  deny 
his  authority  and  to  disclose,  by  evidence, 


168 


CHAP.  I.,  §  II.]                  DOCTRINES    OF    AGENCY.  128* 

the  power  of  one  partner  to  bind  his  firm  in  particular  cases  where 
there  is  no  question  of  tort  or  fraud.  For  the  sake  of  convenience, 
subjects  noticed  will  be  arranged  in  alphabetical  order. 

1.  Accounts. — An  account  rendered  by  one  partner  relative  to  a 

the  nature  of  their  commercial  business,  of  the  partnership  business.     Hutison  v. 

Vienne  v.  Harris,  14  La.  Ann.  382.  McKenzie,  1  E.  D.  Smith  (N.  Y.)  358. 

Ordinary  partners  are  not  bound  in  Either  partner  can  bind  himself  by 
solido  for  attorney's  fees  for  services  ren-  using  the  firm  name  in  an  affair  having 
dered  the  firm  under  the  employment  by  no  connection  with  its  business,  but  the 
one  of  its  members.  In  such  a  case  each  liability  extends  no  further  as  long  as  the 
one  of  the  partners  is  bound  for  his  party  dealing  with  him  understood  iiim  to 
share,  if  no  agreement  has  been  made  be  so  using  the  firm  name.  Merchant  v. 
between  the  attorney  and  the  partner  who  Belding,  49  How.  (N.  Y.)  Pr.  344. 
employed  him.  Hyams  v.  Rogers,  24  La.  One  partner  cannot  bind  his  copartner 
Ann.  230.  by  any  contract,  unless  it  is  in  some  way 
A  partner  is  not  liable  for  bonds  re-  connected  with  the  partnership  business, 
ceived  without  his  knowledge  by  his  co-  or  unless  the  act  be  adopted  and  recog- 
partner  on  special  deposit,  where  the  re-  nized  by  the  copartner,  or  unless  it  be  a 
ceiving  of  special  deposits  is  no  part  of  bill  or  endorsement  of  a  note,  which  the 
the  business  of  the  firm.  Hatheway's  Ap-  party  taking  it  had  good  reason  to  believe 
peal,  52  Mich.  112.  was  authorized  by  the  firm.  Long  i>.  Car- 
One  who  deals  with  a  partner  in  mat-  ter,  3  Ired.  (N.  C.)  L.  238. 
ters  outside  the  business  of  the  firm  can  One  partner  cannot  make  himself  the 
acquire  no  claim  against  the  partnership,  agent  of  his  firm  to  subscribe  stock  to  a 
unless  he  can  prove  a  previous  authority  railroad  company,  the  building  of  rail- 
for,  or  a  subsequent  ratification  of  the  roads  not  being  within  the  scope  of  the 
partner's  act;  and  this  cannot  be  implied  partnership.  Livingston?).  Pittsburg,  &c., 
from  the  mere  fact  of  partnership.  Sel-  K.  R.  Co.,  2  Grant  (Pa.)  Cas.  219. 
den  V.  Bank  of  Commerce,  3  Minn.  166.  Each  member  of  an  unincorporated 
A  knowledge  of  third  persons  of  the  business  association,  in  law  a  partnership, 
limited  nature  of  the  partnership  will  be  may  bind  his  copartners  for  debts  con- 
inferred  from  circumstances.  Livingston  traded  within  the  scope  of  the  legitimate 
V.  Roosevelt,  4  Johns.  (N.  Y.)  251.  business  of  the  association  ;  otherwise,  as 
Partnership  in  a  patent  right,  as  for  the  to  debts  for  purposes  foreign  to  its  ob- 
navigation  of  steam  vessels,  does  not  au-  jects ;  as  to  such,  a  partner  can  be  held 
thorize  one  partner  to  bind  the  partner-  liable  only  upon  his  assent  or  ratification, 
ship  for  building  steamboats,  this  not  Thompson's  Estate,  12  Phil.  (Pa.)  36. 
being  strictly  connected  with  the  enjoy-  A  partnership  to  efiect  a  special  end 
ment  of  their  joint  privileges.  Lawrence  binds  the  members  for  each  other's  acts 
V.  Dale,  3  Johns.  (N.  Y.)  Ch.  23.  only  in  the  prosecution  of  that  end,  unless 
An  assignment  by  one  of  two  partners,  an  authority  may  be  implied  from  the 
in  the  partnership  name,  confers  no  title,  method  of  transacting  business.  Town  v. 
unless  it  clearly  appear  that  the  assign-  Hendee,  27  Vt.  258. 
ment  relates  to  a  matter  within  the  scope 

169 


128*  IMPLIED    POWERS    OF    PARTNERS.  [bOOK    II.^ 

partnership  transaction  is  equivalent  to  an  account  rendered  by  the 
firm,  {k)  5 

The  power  of  one  partner  to  settle  accounts,  and  to  assent  to  a 
transfer  of  them,  will  be  found  noticed  infra  under  the  head  "Debts." 

2.  Admissions. — The  admissions  of  one  partner,  with  reference  to  a 
partnership  transaction,  are  evidence  against  the  firm ;  (l)  but  are  not 
necessarily  conclusive,  (m)  An  a  Amission  by  one  person,  who  after- 
wards enters  into  partnership  with  others,  is  no  evidence  against  them, 
merely  because  they  and  he  are  partners  when  the  evidence  is  sought 
to  be  used,  {n)  Moreover,  in  an  action  against  partners,  the  answer 
of  one  of  *them  to  interrogatories  cannot  be  read  against  the  r^.nq 
others,  (o)  unless  they  have  an  opportunity  of  contradicting  it.  6 

{k)  Fergusson  v.  Fyffe,  8  CI.  &  F.  121,  counts   thus   made   within   a    reasonable 

where    an   account   sent   by  one  partner  time,   he   must  be   considered  as  having 

showing  a  balance  due  from  the  firm,  and  acquiesced  in  their  correctness.     Heartt  v. 

bearing  interest  at  nine  per  cent.,  was  held  Corning,  3  Paige  (N.  Y.)  566. 
to  be  binding  on  the  firm.     See,  as  to  false        (l)   Wood  v.   Braddick,  1  Taunt.  104  ; 

accounts,  infra,  section  3.  Pritchard  v.   Draper,   1   Ry.   &  M.   191  ; 

5.  Accounts.— In  an  action  against  A  affirmed,  2  CI.  &  F.  379  ;  Nicholls  v.  Dowl- 
as the  dormant  partner  of  B,  accounts  ing,  1  Stark.  81 ;  Sangster  v.  Mazarredo, 
rendered  by  B  to  A,  and  retained  by  A  Id.  162 ;  Thwaites  v  Richardson,  1  Peake 
without  objection,  are  admissible  in  evi-  23;  Grant  v.  Jackson,  Id.  268;  Wright  v. 
dence  to  show  the  nature  of  the  connee-  Court,  2  Car.  &  P.  232 ;  and  see  the  last 
tion  between  them.  Corps  v.  Robinson,  2  preceding  note,  and  ante  p.  *87.  As  to 
Wash.  (U.  S.)  388.  But  an  account  in  part  owners,  see  Jaggers  v.  Binnings,  1 
the  handwriting  of  the  ostensible  partner.  Stark.  64. 

not  shown  to  have  existed  while  the  part-        (m)  Wickham  v.  Wickham,  2  Kay  &  J, 

nership    existed,    is    not   competent   evi-  491,  where  the  point  in  question  was  the 

dence,  in  a  suit  against  an  alleged  secret  amount  of  a  debt. 

partner,  to  show  to  what  the  business  ex-        (n)  Tunley  v.  Evans,  2  Dowl.  &  L.  747; 

tended.     Oakley  v.  Aspinwall,  2   Sandf.  Catt  v.  Howard,  3  Stark.  3. 
(N.  Y.)  7.  (o)    Parker    v.    Morrell,    2    Ph.    453; 

The  execution  of  a  certificate  of  deposit  Dale  v.  Hamilton,  5  Hare  393. 
by  a  partner  in  the  firm  name,  on  an  ac-  6.  Admissions  :  when  admissible, 
count  not  pertaining  to  the  business  of  the  generally. — As  a  general  rule,  subject  to 
firm,  and  with  the  depositor's  knowledge,  the  exceptions  hereinafter  noted,  the  ad- 
does  not  bind  the  firm.  Rutledge  v.  missions  or  declarations  of  one  partner  as 
Squires,  23  Iowa  53.  to  firm  transactions,  against  the  interest 

Under   a  stipulation,    in    the    articles,  of  the  firm,  are  admissible  to  bind  his  co- 

that   one  partner  should   make   up   and  partners.     In    such   cases  the   admission 

state  the  partnership  accounts  at  regular  may  be  received  in  evidence,  although  the 

periods,  it  was  held  that  unless  the  other  suit  may  not  be  in  the  name  of  the  firm, 

partner  objected  to  the  statements  of  ac-  Fisk  v.  Copeland,  1  Overt.  (Tenn.)  383. 

170 


CHAP.  I.,  §  II.J 


DOCT'RINES    OF    AGENCY. 


129' 


See  further,  infra,  under  the  heads  " Debts  ^^  and  "Representations.'^ 
3.  Agents. — As  to  the  appointment  of  agents,  see  infra,  under  the 
head  "Servants.''  "^ 


Where  one  partner  gives  a  note  for 
money  borrowed  for  the  tirin  and  on  its 
credit,  this  is  a  partnership  debt,  and  a 
written  admission  by  the  other  partner 
that  the  money  was  used  for  the  purposes 
of  the  firm  is  competent  evidence  of  the 
fact  in  a  suit  between  firm  creditors.  An- 
derson V.  Norton,  15  Lea  (Tenn.)  14.  So, 
also,  the  answer  of  one  partner,  admitting 
the  indebtedness  of  the  partnership,  is 
sufficient  to  charge  the  partnership  as 
garnishees.  Anderson  v.  Wanzer,  5  How. 
(Miss.)  587.  The  admissions  of  a  part- 
ner do  not  cease  to  be  evidence  in  an 
action  against  the  firm  because  a  nolle 
prosequi  has  been  entered  as  against  him. 
Boyce  v.  Watson,  3  J.  J.  Marsh.  (Ky.)  498. 

In  an  action  to  recover  the  balance  of 
a  partnership  account,  the  accounts  cur- 
rent rendered  by  each  of  the  partners  to 
the  others  are  admissible  to  show,  by  the 
admissions  of  the  parties,  that  the  items 
of  such  accounts  are  not  items  of  partner- 
ship account.  Barry  v.  Barry,  3  Cranch 
(U.  S.)  C.  C.  120. 

Where  two  mercantile  houses  do  busi- 


ness under  their  respective  names,  but  the 
same  partners  compose  both  firms,  the 
acknowledgment  of  one  is  prima  facie  evi- 
dence against  the  other.  Sneed  v.  Kelly, 
3  Dana  (Ky.)  538. 

—  vsrhen  inadmissible. —  Where  the 
authority  of  the  partner  making  the  ad- 
missions to  speak  for  his  associates  is  not 
shown,  his  statements,  so  far  as  concerns 
them,  are  mere  iiearsay.  HefFron  v.  Han- 
aford,  40  Mich.  305.  And,  in  any  case,  he 
can  only  bind  his  associates  by  his  admis- 
sions within  the  scope  of  the  business  of 
the  firm.     lb. 

Admissions  of  a  partner,  made  during 
the  partnership,  may  be  introduced  as 
evidence  against  him  in  favor  of  creditors 
of  the  firm,  but  not  as  evidence  against 
the  creditors  of  the  partnership,  for  the 
purpose  of  diverting  the  firm  assets  to  the 
payment  of  his  individual  debts.  Bond  v. 
Nave,  62  Ind.  506. 

Illustrations.  —  The  Jolloxoing  admissions 
have  been  held  admissible:  The  acknowl- 
edgment of  service  of  a  writ,  written  by 
one  partner  in  the  presence  of  the  other, 


7.  Agents. — One  partner   may  legally  the  title  to  the  mine  does  not  come  within 

authorize  a  clerk  of  the  firm  to  accept  the    limited    powers  vested   in  a  mining 

bills,  and  sign  and  endorse  notes,  in  the  partner.     But  this  rule  does  not  apply  to 

name  of  the  company.     Tillier  v.  White-  incorporated  mining  associations,  nor  to 

head,  1  Dall.  (U.  S.)  269.  partnerships  formed  under  Colorado  stat- 

One  partner  may  appoint  an  agent,  by  utes.     Charles  v.  Eshleman,  5  Colo.  107. 
parol,  to  make  and  endorse  bills,  &c. ;  and        Where  one  member  of  a  law  partner- 
such  power  is  not  void,  though  given  by  sJiip  obtained  possession  of  a  letter  con- 
him    by    writing    under   seal.      Lucas    v.  taining  an  authority  to  take   care  of  the 
Bank  of  Darien,  2  Stew.  (Ala.)  280.  writer's   interests,   directed   to   the  other 

Any  partner  in  a  firm  may  be  the  agent  partner,  and  acted  under  the  instructions 
of  a  third  person,  in  drawing  bills  in  favor  contained  in  the  letter — Held,  that  the 
of  the  firm,  for  advances  made  to  such  writer  was  bound  by  the  act  of  the  part- 
third  person,  under  an  express  authority,  ner,  as  much  so  as  if  the  other  partner 
Baring  v.  Lyman,  1  Story  (U.  S.)  396.  had  received  the  letter  and  acted  upon  it. 

The  employment  of  counsel  to  litigate  Beck  v.  Martin,  2  McMuU.  (S.  C.)  260. 

171 


129= 


IMPLIED    POWERS   OF    PARTNERS. 


[book  II., 


4.  Arbitration. — One  partner  cannot,  without  special  authority,  bind 
the  firm  by  a  submission  to  arbitration,  (p)     The  power  to  refer  dis- 


and  with  his  consent.  Freeman  v.  Car- 
hart,  17  Ga.  348.  The  confession  of  one 
member  of  a  copartnership  of  any  fact 
tending  to  bind  the  whole,  in  a  matter  of 
joint  concern.  Odiorne  v.  Maxcy,  15 
Mass.  39.  Entries  made  by  one  partner, 
during  the  continuance  of  the  partnership, 
in  a  book  of  accounts.  Walden  v.  Sher- 
burne, 15  Johns.  (N.  Y.)  409. 

Contra  as  to  a  declaration  of  a  partner 
that  a  liability  incurred  by  a  third  per- 
son, at  his  request,  in  borrowing  a  sum 
of  money,  was  for  the  benefit  of  the  firm. 
Thorn  v.  Smith,  21  Wend.  (N.  Y.)  365. 

Partnership  relation  not  provable 
by  admissions. — The  admission  of  one 
partner  is  not  suflBcient  to  prove  the  ex- 
istence of  the  copartnership  as  against 
the  other  partner.  Corps  v.  Robinson,  2 
Wash.  (U.  S.)  388  ;  Evans  v.  Corriell,  1 
Gr.  (Iowa)  25;  Lea  v.  Guice,  13  Smed. 
•&  M.  (Miss.)  656.  The  partnership  must 
first  be  proved  aliunde.  McFadgen  v. 
Harrington,  67  N.  C.  29  ;  Nixon  v.  Dow- 
ney, 42  Iowa  78  ;  Alcott  v.  Strong,  9  Cush. 
(Mass.)  323.  See,  also,  McLellan  v.  Fen- 
nel 1,  52  Me.  402. 

Where  a  partnership  is  alleged  to  exist 
between  two  persons,  the  acts  and  declara- 
tions of  either  bind  him,  but  do  not  affect 
the  other,  and  it  often  becomes  necessary 
to  prove  the  acts  and  declarations  of  one 
at  a  time,  and  therefore  such  testimony 
may  properly  be  admitted,  and  the  legal 
effect  of  it  postponed  until  the  judge  in- 
structs the  jury  upon  the  law  of  the  whole 
case,  whose  duty  it  would  be  to  inform 
them  that  the  acts  and  declarations  of  a 
party,  before  the  partnership  is  proved, 
bind  himself  only.  Jennings  v.  Estes,  16 
Me.  323. 


But  after  the  fact  of  partnership  is 
proved  by  otlier  evidence,  the  admissions 
of  one  partner  may  be  received  to  charge 
the  partnership  in  relation  to  transactions 
during  its  existence.  Phillips  v.  Puring- 
ton,  15  Me.  425;  Gulick  v.  Gulick,  2  Gr. 
(N.  J.)  578 ;  Goodenough  v.  Dufiield, 
Wright  (Ohio)  455;  Wolle  v.  Brown,  4 
Whart.  (Pa.)  365;  Allen  t;. Owens, 2 Spears 
(S.  C.)  170.  Thus,  in  an  action  against 
partners  jointly,  an  answer  in  chancery 
of  one  of  them  may  be  given  in  evidence 
by  the  plaintiff,  after  the  partnership  has 
been  proved,  to  show  admissions  of  the 
plaintiff's  demand,  and,  in  such  case, 
evidence  to  discredit  the  answer  cannot 
be  offered  by  the  other  members  of  the 
copartnership.  Hutchins  v.  Childress,  4 
Stew.  &  P.  (Ala.)  34. 

Admissions  after  dissolution. — Part- 
nership transactions  with  third  persons, 
which  took  place  after  the  sale  of  his 
present  interest  by  one  partner  to  another 
and  after  the  retiring  partner  had  ceased 
to  be  a  member  of  the  firm,  are  not  ad- 
missible against  him  upon  the  question 
of  the  value  of  his  interest  when  sold, 
nor  upon  the  question  of  fraud  or  mis- 
take in  the  contract  of  sale,  and  equally  in- 
admissible are  judgments  rendered  against 
the  new  firm,  to  which  the  retired  mem- 
ber was  no  party.  Dortie  v.  Dugas,  55 
Ga.  484. 

In  assumpsit  by  partners,  for  work  and 
labor,  statements  of  one  of  them,  made 
after  dissolution,  so  far  as  they  tend  to 
show  a  new  contract  destroying  the  part- 
nership claim  and  giving  to  each  partner 
a  separate  demand  for  his  part  of  the 
debt,  are  not  admissible ;  but  his  state- 
ments, so  far  as   they  show  a   payment 


(p)  See   Stead    v.   Salt,   2   Bing.    101 ;    Antram  v.  Chace,  15  East  209. 
Adams  v.  Bankhart,  1  Cr.,  M.  &  R.  681  ; 

172 


CHAP.  I.,  §  II.]  DOCTRINES    OF    AGENCY.  129* 

putes,  even  although  they  relate  to  dealings  with  the  firm,  cannot  be 
said  to  be  necessary  for  carrying  on  its  business  in  the  ordinary  way.  {q) 


made  to  liimself,  may  be  proved.  Lefa- 
vour  V.  Yandes,  2  Blackf.  (Ind.)  240. 

The  admissions  of  one  partner,  made  at 
the  time  of  the  payment  to  him  of  a  debt 
due  to  the  partners,  and  at  a  time  subse- 
quently to  a  dissolution,  are  admissible 
against  the  other  partners,  as  the  admis- 
sions of  an  agent  relative  to  an  act  within 
the  scope  of  his  authority,  made  at  the 
time  when  such  act  was  done,  are  admis- 
sible in  evidence  to  bind  his  principal. 
Kirk  V.  Hiatt,  2  Ind.  322. 

The  admissions  or  declarations  of  one 
partner,  after  dissolution  and  not  under  a 
new  authority,  are  not  evidence  against  a 
former  partner.  Craig  v.  Alverson,  6  J. 
J.  Marsh.  (Ky.)  509  ;  Crumless  v.  Sturgess, 
6  Heisk.  (Tenn.)  190 ;  Dougelot  v.  Raw- 
lings,  58  Mo.  75 ;  Tick  v.  MulhoUand,  48 
Wis.  419. 

One  partner  can  interrupt  prescription 
as  to  all  the  other  partners  who  are 
bound  in  solido,  even  after  the  dissolution 
of  the  partnership.  Carroll  v.  Gayarrd, 
15  La.  Ann.  671. 

A  and  B  were  partners  in  trade,  and 
upon  their  dissolution  B  ass.igned,  for 
value,  all  his  interest  in  the  partnership 
effects  to  A  Held,  that  B  could  not,  by 
his  mere  declaration,  made  after  such 
assignment,  defeat  an  action  brought  in 
their  joint  names.  Owings  v.  Low,  5  Gill 
&  J.  (Md.)  134. 

After  dissolution  of  partnership  between 
an  active  and  a  dormant  partner,  an  action 
for  the  balance  of  an  account  was  brought 
against  both,  in  which  the  dormant  part- 
ner pleaded  payment,  and  the  active  part- 
ner was  defaulted.  Held,  that  an  admis- 
sion made  after  the  dissolution  by  the 
active  parter,  that  such  balance,  in  conse- 


quence of  a  mistake,  had  not  been  paid, 
was  competent  evidence.  Bridge  v.  Gray, 
14  Pick.  (Mass.)  55. 

In  Pennsylvania,  under  the  statute  of 
1838,  authorizing  one  firm  to  maintain  an 
action  against  a-nother,  both  having  a  com- 
mon partner,  the  acts  and  declarations  of 
such  common  partner,  after  dissolution  of 
such  partnership,  are  admissible  in  evi- 
dence. Tassey  v.  Church,  4  Watts  &  S. 
(Pa.)  141. 

Admissions  of  deceased  partner. — 
In  an  action  against  a  surviving  partner 
for  fraud  and  deceit  in  the  purchase  of  a 
slave,  the  declarations  of  the  deceased 
partner,  by  whom  the  contract  was  made, 
before  and  after  the  purchase,  as  to  his 
object  in  purchasing,  are  not  admissible 
for  defendant  to  show  that  his  copartner 
made  the  purchase  on  his  own  individual 
account,  and  not  on  account  of  the  firm. 
Dixon  V.  Barclay,  22  Ala.  370. 

Where  surviving  partners  are  sued  on 
a  note  given  by  the  deceased  partner  in 
his  individual  name,  his  declarations  that 
the  note  was  given  for  the  partnership 
business,  and  was  a  company  note,  are  not 
admissible  in  the  absence  of  evidence 
aliunde  that  those  transactions  out  of 
which  the  note  arose  were  for  the  part- 
nership. Ostrom  V.  Jacobs,  9  Mete.  (Mass.) 
454.  Such  declarations  are  admissible 
against  the  survivor,  where  the  partner- 
ship is  admitted.  Doremus  v.  McCormick, 
7  Gill  (Md.)  49.  In  an  action  against  the 
surviving  partner,  for  money  lent  to  the 
deceased  partner,  the  defence  was  that  the 
money  was  not  borrowed  or  used  for  firm 
purposes.  Held,  that  declarations  of  the 
deceased  partner  to  third  persons,  made 
after  the  money  was  borrowed,  to  the  effect 


iq)  Stead  V.  Salt,  3  Bing.  101 ;  Adams    Boyd  v.  Emerson,  2  Ad.  &  E.  184. 
V.  Bankhart,  1  Cr.,  M.  &  R.  681 ;  and  see 

173 


129* 


IMPLIED    POWKRi^  OF    PARTNERS. 


[book  II., 


Wliere  a  partnersliip  has  been  dissolved  and  it  has  been  agreed  that 
one  of  the  pai'tners  shall  get  in  the  debts  due  to  the  firm,  he  has  no 
power,  after  bringing  an  action  in  the  name  of  the  firm  for  a  debt  due 
to  it,  to  bind  his  copartner  by  a  reference  of  all  matters  in  difference 


that  it  was  borrowed  and  ii-sed  for  firm  pur- 
poses, were  admissible.  Klocli  v.  Beck- 
man,  IS  Hun  (N.  Y.)  502. 

Admissions  of  surviving  partner. — 
If  tlie  admissions  of  a  surviving  partner 
with  respect  to  a  transaction  within  the 
scope  of  the  copartnership,  made  after  the 
death  of  his  copartner,  are  competent 
evidence  against  the  personal  representa- 
tives of  tlie  deceased  partner,  tliey  are 
not  conclusive.  McElroy  v.  Ludlam,  5 
Stew.  (N.  J.)  828. 

Admissions  of  dormant  partner. — 
Declarations  of  a  dormant  partner  are 
admissible  in  evidence  against  his  copart- 
ners, if  they  relate  to  the  partnership 
business.  Kaskaskia  Bridge  Co.  v.  Shan- 
non, 6  111.  (1  Gilm.)  1.5. 

Declarations  in  favor  of  hrm  or 
partner  making  them. — The  acts, 
declarations  or  admissions  of  one  of  two 
partners  are  not  admissible  as  evidence 
for  them,  in  an  action  against  them  as  a 
firm,  and  where  they  have  jointly  pleaded 
the  general  issue.  Hutchins  v.  Childress, 
4  Stew.  &  P.  (Ala.)  34.  So,  also,  the 
"admission"  of  one  partner  that  his  co- 
partner was  indebted  to  him  cannot  bind 
such  copartner,  in  a  suit  by  a  person 
claiming  through  the  former.  A  claim 
cannot  be  allowed  so  to  prove  itself  under 
the  name  of  an  admission.  Lewis  v. 
Allen,  17  Ga.  300.  The  rule  is  that  the 
declarations  of  the  alleged  partners,  unac- 
companied by  acts,  and  unconnected  with 
any  of  their  declarations  proved  by  the 
other  party,  are  inadmissible  in  their  own 
favor,  Phillips  v.  Puringtoa,  15  Me.  425. 
Thus,  in  a  suit  against  A  and  B  as  part- 
ners, declarations  of  A  that  B  was  not 
his  partner  cannot  be  introduced  as  evi- 


dence to  exonerate  B.     Young  v.  Smith, 
25  xMo.  341. 

Admission  must  have  been  relied 
on. — Wiiere  the  vendor  of  goods,  at  the 
time  of  the  sale,  professes  to  sell  them  to 
the  vendee  in  his  individual  capacity,  he 
cannot,  in  an  action  against  a  firm  of 
which  the  vendee  was  a  member,  give  in 
evidence  the  declarations  or  admissions 
of  such  vendee  that  the  goods  were  pur- 
chased for  the  benefit  of  the  firm.  Lararus 
V.  Long,  3  Ired.  (N.  C.)  L.  39. 

Instances  of  admissions  received  in 
evidence. — A,  being  indebted  to  a  firm 
on  a  note,  paid  a  portion  of  it  to  B,  one 
of  the  partners,  who  pnimised  to  endorse 
it  on  the  note,  but  did  not  do  so.  After 
the  dissolution  of  the  p.'.Jtnership,  C,  the 
other  partner,  gave  a  writing,  signed  by 
his  individual  name,  acknowledging  that 
he  had  retained  in  his  hands  the  money 
of  A,  to  the  amount  due  on  the  note,  and 
promising  to  refund  to  A  such  sum,  as,  in  a 
suit  then  pending  on  the  note,  the  court 
should  find  had  been  paid  thereon.  The 
money  so  retained  had  been  received  by 
C,  as  a  member  of  the  partnership,  and 
for  their  use  and  benefit.  The  suit  was 
then  withdra.wn,  and  A  brought  his 
action  against  B  and  C  jointly,  to  recover 
back  the  amount  first  paid  to  B.  Held, 
that  the  writing  given  by  C  to  A  was  ad- 
missible in  evidence.  Story  v.  Barrell,  2 
Conn.  665. 

Where  a  chose  in  action  against  a  part- 
nership was  assigned,  and  one  of  the  part- 
ners, being  called  upon  for  payment  by 
the  assignee,  said  he  would  pay  to  him  if 
he  was  legally  entitled  to  receive  it — 
Held,  that  it  was  sufficient  to  enable  the 
assignee  to  maintain  an  action  iii  his  own 


174 


-CHAP.  I.,  §  II.]  DOCTRINES    OF    AGENCY.  1 29* 

between  the  plaintiffs  and  the  Jefendant.  (r)  The  partner  actually 
referring  the  dispute  is,  however,  himself  bound  by  the  award,  (s)  and 
the  other  partners  may  become  bound  by  ratification,  [t)  8 

name  against  all  the  parlnera,  on  showing        A,  being  in   partnership   with    B,  col- 

a   legal   assignment.     Lang   v.  Fiske,  11  lected  a  sura  of  money  in  his  individual 

Me.  385.  capacity  for  C,  and  afterwards  executed  to 

Where  one  of  two  partners  had  assigned  tiie  latter  a  note  in  the  name  of  the  firm 

his  interest  in  the  partnership  property  to  for  the  amount.     In  a  suit  against  the  firm 

his  copartner  as  collateral  security  for  a  on  the  note,  the  plaintiff  offered  to  prove 

debt  which   he  owed   iiim,  but  was  still  that  A,  during  the  existence  of  the  firm, 

liable  for  the  debts  of  the  firm,  and   en-  had  declared   that  said  money  had  been 

titled   to   his    proportion    of  the   surplus  used  by  himself  and  partner  in  the  busi- 

property  after  tlie  debts  of  the  firm  and  ness  of  the  partnership.     Held,  that  the 

his  debt  to  his  partner  were  paid — Held,  evidence  was  inadmissible.     Hickman  v. 

that  a  paper  signed  by  the  partner  who  Reineking,  6  Blackf.  (Ind.)  388. 

had  assigned  his  interest,  and  made  after  (r)  Hatton   v.  Royle,  3   Hurlst.  &   N. 

the   commencement   of    the  suit,  stating  500. 

that  after  the  assignment  he  had  taken  (s)  Strangford  v.  Green,  2  Mod.  228. 

the  money  of  the  firm,  to  recover  which  (0  As  in  Thomas  v.  Atherton,  10  Ch. 

the  action  was   brought,  and    had   appro-  D.  185. 

priated  it  to  the  payment  of  the  note  of  8.  Arbitration. — The  weight  of  author- 

another  firm  of  which  he  was  a   member,  ity  is  to  the  effect  that  one  partner  cannot, 

in  the  hands  of  the  defendant,  was  admis-  while    the    partnersliip    continues,    bind 

sible  in  evidence  against  the  firm,  in  an  another  to  a  submission  of  the  Interests 

action  of  assumpsit   for   money  had    and  of  both  to  arbitration.  Carthaus  y.  Ferrers, 

received,  brought  for  the  benefit  of  the  1  Pet.  (U.  S.)  222  ;  Jones  v.  Bailey,  5  Cal. 

assignee  alone.     Foster  v.  Fifield,  29  Me.  345 ;  Wood  v.  Shepherd,   2   Patt.  &   H. 

136.  (Va.)  442;  Buchoz  v.  Grandjean,  1  Mich. 

Instances  of  admissions  rejected  as  367  ;  Martin  v.  Thrasher,  40  Vt.  460.  But 
evidence. — An  acknowledgment  of  ser-  he  can  bind  himself  to  the  extent  of  his 
vice  of  process,  on  a  writ  against  a  part-  interest  in  the  firm.  Carthaus  v.  Ferrers, 
nership,  by  one  of  the  partners,  signed  supra;  Fanchon  v.  Bibb  Furnace  Co, 
"T.  S.  C,  one  of  the  firm  of  C.  &  L.,"  is  (Ala.),  2  So.  Rep.  268  ;  Armstrong  v.  Rob- 
not  an  acknowledgment  in  behalf  of  his  inson,  5  Gill  &  J.  (Md.)  412;  Brink  v. 
copartners.  Clark  v.  Stoddard,  3  Ala.  New  Amsterdam,  &c.,  Ins.  Co.,  5  Robt. 
366.  (N.  Y.)  104. 

A  entered  into  partnership  with  B  in  But  where  the  other  parties  previously 
the  business  of  tanning,  and  C  bound  him-  assent  to  or  subsequently  ratify  such  sub- 
self,  in  a  covenant  to  B,  for  A's  conduct  mission,  it  will  bind  them.  Davis  v.  Ber- 
as  a  partner  for  a  certain  time.  Held,  ger,  54  Mich.  652,  and  cases  last  cited 
that  in  an  action  by  B  against  C  on  the  above. 

covenant,  the  admissions  of  A,  made  after  In  some  states,  however,  if  the  submis- 

the    expiration   of    the    stipulated    time,  sion  by  one  partner  be  not  under  seal,  it 

were  not  admissible  as  evidence  against  C.  will  bind  the  other  partners.     Hallack  v. 

Hotchkiss  V.  Lyon,  2  Blackf.  (Ind.)  222.  March,  25  111.  48 ;  Southard  v.  Steele,  3 

175 


129*  IMPLIED    POWERS    OF    PARTNERS.  [bOOK    II., 

5.  Banking  account. — One  partner  has  no  implied  authority  to  bind 
the  firm  by  opening  a  banking  account  on  its  behalf  in  his  own 
name,  (w)     See  infra,  "  Cheques." 

T.  B.  Mon.  (Ky.)  435 ;  Taylor  v.  Congell  Jackson,  7  T.  R.  207.  But  it  does  not  fol- 
12  Smed.  &  M.  (Miss.)  243;  Taylor  v.  low  that  one  of  several  persons,  who  are 
Coryell,  12  Serg.  &  R.  (Pa.)  243;  Gay  general  partners,  cannot  in  any  way  bind 
V.  Waltman,  89  Pa.  St.  453.  See,  also,  the  rest  by  a  submission  to  arbitration 
Armstrong  i;.  Robinson,  5  Gill  &  J.  (Md.)  upon  a  specific  matter  of  partnership 
412.  riglit.     One  partner  may  bring  or  settle 

That  a  sale  of  his  interest  by  one  part-  an  action  on  behalf  of  the  rest.  Furnival 
ner  to  the  other,  authorizes  the  latter  to  v.  Weston,  7  J.  B.  Moore  356;  Harwood  v. 
submit  the  firm  claims  to  arbitration,  see  Edwards,  Gow  on  Part.  (3d  ed.)  65,  note  g. 
Becker  v.  Boon,  61  N.  Y.  317.  Why  may  he  not  enter  into  an  agreement 

Where  one  partner  signed  a  sealed  sub-  to  refer  the  subject  matter?  And  if  so, 
mission  to  an  award,  and  accepted  the  why  may  not  one  agree,  on  behalf  of  the 
amount  awarded  in  favor  of  the  partner-  rest,  to  be  governed  by  an  opinion  in 
ship,  pursuant  to  such  submission,  and  which  both  they  and  the  opposite  party 
endorsed  a  receipt  in  full  on  the  award —  may  confide  ?  In  Strangford  v.  Green,  2 
Held,  that  it  operated  either  as  a  release  Mod.  228,  the  submission  appears  to  have 
by  one  partner,  or  as  an  award  and  satis-  been  by  arbitration  bond,  and  therefore 
faction,  and  was  sufficient  to  bar  the  part-  the  partner  could  not  be  bound.  In  Stead 
nership  claim,  though  the  submission  v.  Salt,  3  Bing.  101,  the  parties  were  not 
might  not  have  been  binding  upon  his  partners  generally,  but  only  in  the  deal- 
copartner.  Buchanan  f.  Curry,  19  Johns,  ings  to  which  the  award  related;  the 
(N.  Y.)  137.  matter  was  twice  referred.     In   the  first 

Mr.  Gow,  in  his  Treatise  on  Partner-  instance  four  partners  signed  the  agree- 
ship  (supplement,  London,  1841,  c.  2,  ?  2,  ment  of  reference;  the  arbitration  went 
p.  17),  in  reviewing  the  English  cases  on  ofi",  and  the  new  agreement  was  signed  by 
this  subject,  says :  "  In  the  case  of  Boyd  three  only.  In  the  absence  of  any  explan- 
V.  Emerson,  2  Ad.  &  E.  184,  one  question  ation,  it  was  reasonable  to  suppose  that 
was  whether  a  partner  could  bind  his  co-  if  both  agreements  were  signed  by  the 
partners  by  a  parol  submission  to  arbitra-  authority  of  all  the  partners  the  second 
tion.  But  the  case  being  disposed  of  on  would  have  been  executed  by  the  same 
other  points,  it  became  unnecessary  to  de-  number  as  the  first.  The  passage  cited  in 
aide  that  question.  However,  Sir  F.  that  case,  from  Com.  Dig., 'Arbitrament,' 
Pollock,  who  had  to  maintain  the  affirm-  D  2,  from  which  it  was  implied  that  a 
ative,  in  the  course  of  his  argument  ob-  partner  cannot  bind  his  copartner,  prob- 
served  that  the  point  might  be  considered  ably  refers  to  submissions  by  deed, 
as  res  integra,  and  admitted  that  '  one  There  is  no  ground  in  reason  for  saying 
partner  cannot  bind  another  in  a  matter  that  in  the  case  of  a  general  partnership  in  a 
of  arbitration,  where  the  submission  is  by  banking  firm,  one  partner  cannot  submit, 
deed ;  because,  in  general,  he  cannot  bind  on  behalf  of  all,  to  such  a  mode  of  settling 
his   partner   by  any  deed.'     Harrison  v.    a  dispute  upon  a  partnership  concern  as 

(u)  Alliance  Bank,  Limited,  v.  Kearsley,  L.  R.,  6  C.  P.  433. 

176 


CHAP.  I.,  §  II.]                  DOCTRINES    OF    AGENCY.  129* 

[5a.  Assignments  for  benefit  of  creditoi-s.^l 

6.  Bills  of  e.'^change  and  promissory  notes. — Every  member  of  an 
ordinary  trading  partnership  has  implied  power  to  bind  the  firm  by 

was  adopted  here.  Suppose  the  question  pressing  assent  or  dissent  (Loeb  v.  Pier- 
had  been  a  practical  one,  as  to  something  point,  58  Iowa  469  ;  S.  C,  43  Am.  Rep. 
to  be  done  in  the  course  of  business,  122;  Johnson  v.  Robinson  (Tex.),  4  S. 
might  not  a  partner  have  agreed  to  take  W.  Rep.  625),  or  has  abandoned  all  con- 
the  judgment  of  an  experienced  person,  trol  of  the  business  (Kemp  v.  Carnley,  3 
as  a  custom-house  officer,  a  dock-master,  Duer  (N.  Y.)  1),  or  has  sold  out  his  in- 
or  an  eminent  merchant?  And  if  so,  terest  to  the  partner  who  executes  the 
why  not  the  opinion  of  counsel  in  the  assignment  (Clark  v.  McClelland,  2  Grant 
present  case?  To  hold  that  the  opinion  (Pa.)  Cas.  31),  or  has  absconded  (Sullivan 
could  not  be  so  taken  would  throw  great  v.  Smith,  15  Neb.  476  ;  S.  C,  48  Am.  Rep. 
impediments  in  the  way  of  a  very  com-  354) — in  any  such  case  an  assignment 
mon,  useful,  and  economical  mode  of  executed  by  one  partner  is  ordinarily 
settling  such  disputes."  valid  on  the  ground  of  necessity,  though 

9.  Assignments  for  benefit  of  credi-  it  may,  perhaps,  be  voidable   by  his  co- 

itors — when  one  partner  may  assign. —  partner.     Sheldon  v.  Smith,  28  Barb.  (N. 

It  may  be  safely  said  that  under  ordinary  Y.)  593. 

circumstances  one  partner  may  not,  with-  So,  also,  an  assignment  by  a  partner  of 
out  the  assent  of  the  other,  assign  the  firm  his  separate  property,  m  trust  for  the  pay- 
property  to  a  trustee  for  the  benefit  of  the  ment  of  the  partnership  debts,  is  valid  as 
creditors ;  yet  if  an  extraordinary  emer-  against  a  separate  creditor  of  such  part- 
gency  occurs  in  the  affairs  of  the  partner-  ner.  Newman  v.  Bagley,  16  Pick.  (Mass.) 
ship,  and  the  non-assigning  partner  can-  570.  See,  also,  Hennessy  v.  Western  Bank, 
not  be  consulted  on  account  of  his  ab-  (6  Watts  &  S.  (Pa.)  300),  where  it  was 
sence,  under  circumstances  which  furnish  held  that  a  general  assignment  of  all  the 
reasonable  ground  for  inferring  that  he  partnership  effects  for  the  benefit  of  cred- 
intended  to  confer  upon  the  assigning  itors,  executed  by  a  part  only  of  the  firm, 
partner  authority  to  do  any  act  for  t-he  and  followed  by  delivery,  is  valid, 
firm  which  could  be  done  with  his  con-  In  Anderson?;.  Tompkins  (1  Brock.  (U. 
currence  if  he  were  present,  such  an  as-  S.)  456),  Marshall,  C.  J.,  lays  down  the 
signment,  if  fairly  made,  will  be  pre-  law  as  follows :  "  It  will  be  readily  con- 
sumed prima  facie  to  be  valid.  Stein  v.  ceded  that  a  fraudulent  sale,  whether 
La  Dow,  13  Minn.  412;  Forbes  r.  Scan-  made  by  deed  or  otherwise,  would  pass 
nell,  13  Cal.  242;  Robinson  v.  Gregory,  nothing  to  a  vendee  concerned  in  the 
29  Barb.  (N.  Y.)  560;  Palmer  v.  Myers,  fraud.  But,  with  this  exception,  I  feel 
43  Id.  509  ;  Deming  v.  Colt,  3  Sandf.  (N.  much  difficulty  in  setting  any  other  limits 
Y.)  284;  National  Bank  v.  Sackett,  2  to  the  power  of  a  partner  in  disposing  of 
Abb.  (N.  Y.)  Pr.  286;  Adams  v.  Thorn-  the  effects  of  the  company,  purchased  for 
ton  (Ala.),  3  So.  Rep.  20.  sale.     He  may  sell  a  yard,  a  piece,  a  bale, 

Where  the  other  partner  assents  to  the  or  any  number  of  bales.    He  may  sell  the 

making  of  the  assignment  by  his  copart-  whole  of  any  article,  or  of  any  number  of 

ner  (Baldwin  v.  Tynes,  19  Abb.  (N.  Y.)  articles.     This  power  certainly  would  not 

Pr.  32),  or  is  absent  or  incapable  of  ex-  be  exercised  in  the  presence  of  a  partner, 

177  12 


129*  IMPLIED    TOWERS   OF    PARTNERS.  [bOOK    II., 

drawing,  accepting  or  endorsing  bills  of  exchange,  or  by  making  and 
endorsing  promissory  notes  in  its  name  and  for  the  purposes  of  the 
firm,  {x)     And  if  two  partners,  unknown  to  each  other,  give  two  bills 

without  consulting  liim  ;  and,  if  it  were  so    be  consulted.     He  could  not  give  an  opin- 
exercised,  slight  circumstances  would  be    ion.    In  leaving  the  country  he  must  have 
sufficient   to   render  the  transaction  sus-    intended  to  confide  all  his  business  to  the 
picinus,  and,  perhaps,  to  fix  on  it  the  im-    partner  who  remained  for  the  purpose  of 
putation  of  fraud.     In  this  respect,  every    transacting  it.     Had  this,  then,  been  a  sale 
case  raustdepend  on-  its  own  circumstances,    for  money,  or  on  credit,  no  person,  I  think, 
But  with  respect  to  the  power,  in  a  case   could  have  doubted  its  obligation.     I  can 
perfectly  fair,  I  can  perceive  no  ground    perceive  no  distinction  in  law,  in  reason, 
on  which  it  is  to  be  questioned.     But  this    or  in  justice,  between  such  a  sale  and  the 
power,  it  is  said,  is  limited  to  the  course    transaction  which   has   taken    place.     A 
of  trade.      What   is   understood    by    the    merchant  may  rightfully  sell  to  his  cred- 
course  of  trade?     Is  it  that  which  is  act-    itor,  as  well  as  for  money.     He  may  give 
ually  done  every  day,  or  is  it  that  which    goods  in  payment  of  a  debt.     If  he  may 
may  be  done  whenever  the  occasion  for    thus   pay  a  small  creditor,  he  may  thus 
doing  it  presents  itself?     There  are  small    pay  a  large  one.     The  quantum  of  debt,  or 
traders  who  scarcely  ever,  in  practice,  sell    of   goods   sold,   cannot    alter    the   right, 
a  piece  of  cloth  uncut,  or  a  cask  of  spirits.    Neither  does  it,  as  I  conceive,  aSect  the 
But  may  not  a  partner  in  such  a  store  sell    power  that  these  goods  were  conveyed  to 
a  piece  of  cloth,  or  a  cask  of  spirits  ?   His    trustees  to  be  sold  by  them.     The  mode 
power  extends  to  the    sale  of  the   arti-    of  sale  must,  I  think,  depend  on  circum- 
cle,  and  the  course  of  trade  does  not  limit   stances.     Should   goods   be   delivered   to 
him  as   to  quantity.     So  with  respect  to    trustees   for   sale,   without    necessity,   the 
larger  concerns.     By  the  course  of  trade    transaction  would  be  examined  with  sem- 
is  understood    dealing    in    an    article  in    tinizing  eyes,  and  might,  under  some  cir- 
which  the  company  is  accustomed  to  deal;    cumstances,    be    impeached.     But   if  the 
and  dealing  in  that  article  for  the  com-    necessity  be  apparent,  if  the  act  is  justified 
pany.     Tompkins  &  Murray  sold  goods,    by  its  motives,  if  the  mode  of  sale  be  such 
A  sale  of  goods  was  in  the  course  of  their    as  the  circumstances  require,  I  cannot  say 
trade,  and  within  the  power  of  either  part-    that  the  partner  has  exceeded  his  power, 
ner.     A  fair  sale,  then,  of  all  or  of  a  part    This  is  denominated  a  destruction  of  the 
of  the  goods  was  within  the  power  vested    partnership  subject,  and  a  dissolution  of 
in  a  partner.    This  reasoning  applies  with    the  partnership.     But  how  is  it  a  destruc- 
increased  force  when  we  consider  the  sit-    tion  of  the  subject?     Can  this  appellation 
uation  of  these    partners.     The  one  was    be   bestowed    on  the   application   of  the 
on  a  voyage  to  Europe,  the  other  in  pos-    joint  property  to  the  payment  of  the  debts 
session  of  all  the  partnership  effects  for    of  the  company  ?    How  is  it  a  dissolution 
sale.    The  absent  partner  could  have  no    of  the  partnership?     A  partnership  is  an 
agency  in  the  sale  of  them.     He  could  not    association  to  carry  on   business  jointly. 

{x)  See  Re  Kiches,  4  De  G.,  J.  &  S.  581.  Smith  v.  Baily,  11  Mod.  401;  Lewis  v. 
andoN.  R.287;  Pinckneyi).  Hall,  ISalk.  Reilly,  1  Q.  B.  349;  Stephens  v.  Rey- 
126;  Dickinson  v.  Valpy,  10  Barn.  &  C.  nolds,  5  Hurlst.  &  N.  513.  See,  also.  The 
128-    Sutton   V.  Gregory,  2   Peake   150;    Bills  of  Ex.  Act,  1882,  §  23,  cl.  2. 

178 


OHAP.  I.,  §  II.]  DOCTEINES   OP   AGENCY.  130* 

in  the  name  of  the  firm  in  payment  *of  the  same  demand, 
-'  the  firm  will  be  liable  on  both  bills  if  held  by  bona  fide 

holders  for  value  without  notice  of  the  mistake,  {y)  10 

This  association  may  be  form«d  for  the  partner  had  a  right  to  dissolve  this  part- 
future  before  any  goods  are  acquired.  It  nership.  The  act,  however,  of  applying 
may  continue  after  the  whole  of  a  particu-  the  means  of  carrying  on  their  business  to 
lar  purchase  has  been  sold.     But  either  the  payment  of  their  debts,  rnight  suspend 

(y)  Davison  v.  Robertson,  3  Dow  218.  In  all  such  cases  the  burden  of  proof 
10.  Power  of  one  partner  to  execute  is  on  the  firm  in  the  first  instance,  the 
bills  and  notes. — The  law  implies  an  au-  legal  presumption  being  that  the  note 
thority  in  one  of  several  partners  to  exe-  was  given  for  a  partnership  indebtedness 
cute  promissory  notes  in  the  name  of  the  in  the  regular  course  of  business,  until 
firm :  ( 1 )  where  such  authority  is  neces-  the  contrary  be  shown.  Thurston  v. 
sary  to  the  successful  carrying  on  of  tlie  Lloyd,  4  Md.  283 ;  Knapp  v.  McBride,  7 
business  of  the  firm;  or  (2)  according  to  Ala.  19;  Barrett  v.  Swann,  17  Me.  180; 
the  usage  of  similar  partnerships;  or  (3)  Eusminger  v.  Marvin,  5  Blackf.  (Ind.) 
according  to  the  course  of  trade  of  that  210;  Littell  v.  Fitch,  11  Mich.  525  ;  Hogg 
particular  partnership.  Gray  v.  Ward,  18  v.  Orgill,  34  Pa.  St.  344 ;  Miller  v.  Hines, 
111.  32;  Storer  v.  Hinkley,  Kirby  (Conn.)  15  Ga.  197  ;  Gregg  v.  Fisher,  3  111.  App. 
147  ;  Newell  v.  Smith,  23  Ga.  170 ;  Dow  261 ;  Adams  v.  Ruggles,  17  Kan.  237 ; 
V.  Phillips,  24  111.  249 ;  Miller  v.  Hughes,  Magill  v.  Merrie,  5  B.  Mon.  (Ky.)  168 ; 
1  A.  K.  Marsh.  (Ky.)  181 ;  Waldo  Bank  Hamilton  v.  Soraers,  12  Id.  11  ;  Waldo 
V.  Lumbert,  16  Me.  416  ;  Coursey  v.  Baker,  Bank  v.  Greeley,  16  Me.  419  ;  Carrier  v. 
7  Harr.  &  J.  (Md.)  28  ;  Bascom  v.  Young,  Cameron,  31  Mich.  373;  Laler  v.  Jordan, 
7  Mo.  1 ;  Potter  v.  Dillon,  Id.  228;  Partin  44  Miss.  283 ;  Sylverstein  v.  Atkinson,  45 
V.  Leiterloh,  6  Jones  (N.  C.)  Eq.  341;  Id.  81;  Davis  v.  Cook,  14  Nev.  265; 
Kirkpatrick  v.  Turnbuli,  Add.  (Pa.)  259.  Whittaker  v.  Brown,  16  Wend.  (N.  Y.) 
Each  partner  is  the  agent  of  the  other  for  505 ;  National  Union  Bank  v.  London, 
this  purpose,  but  not  to  sign  the  firm  name  66  Barb.  (N.  Y.)  189. 
to  notes  relating  to  business  outside  of  the-  Such  a  note,  even  though  given  without 
scope  of  the  partnership.  Zuel  v.  Bowen,  the  knowledge  or  consent  of  the  other 
78  111.  234  ;  Wagnor  v.  Clay,  1  A.  K.  partner,  and  for  a  debt  unconnected  with 
Marsh.  (Ky.)  257 ;  Blodgett  v.  Weed,  119  the  partnership  business,  will  bind  the 
Mass.  215;  Nat.  Union  Bank  v.  London,  firm  in  the  hands  of  an  innocent  endorsee 
€6  Barb.  (N.  Y.)  189  ;  Ditts  v.  Lonsdale,  for  value.  Duncan  v.  Clark,  2  Rich.  (S. 
49  Ind.  521.  The  implied  power  exists  C.)  587  ;  Haldeman  v.  Bank  of  Middle- 
only  where  ihe  usual  course  of  the  busi-  town,  28  Pa.  St.  440 ;  Collier  v.  Cross,  20 
ness  would  appear  to  require  it.  Bradley  Ga.  1 ;  Rich  v.  Davis,  4  Cal.  22 ;  S.  C,  6 
1).  Linn,  19  111.  App.  322.  See,  however,  Cal.  141 ;  Hawes  v.  Dunton,  1  Bailey  (S. 
3  Kent  Com.  42,  where  it  is  said  that  C.)  146;  Marsh  v.  Thompson  National 
^'even  if  the  paper  was  made  in  a  case  Bank,  2  111.  App.  217;  Walworth  v.  Hen- 
which  was  not  in  its  nature  a  partnership  derson,  9  La.  Ann.  339;  Boardman  v. 
transaction,  yet  it  will  bind  the  firm  if  it  Gore,  15  Mass.  331 ;  First  National  Bank 
was  done  in  the  name  of  the  firm  and  v.  Morgan,  73  N.  Y.  593 ;  Roth  v.  Colvin, 
there  be  evidence  that  it  was  done  under  32  Vt.  125. 
its  express  or  implied  sanction."  In   applying  the  foregoing   principles 

179 


130*  IMPLIED   POWERS   OF   PARTNERS.  [bOOK   II.^ 

Acceptances  in  blank. — One  partner,  however,  has  no  implied  power 
to  accept  bills  in  blank,  nor  to  bind  his  copartners,  otherwise  than 

the  operations  of  the  company,  but  did  not  is  nothing  in  what  is  said  above  which. 

dissolve   the  contract  under  which  their  militates  against  the  well-settled  rule  that 

operations  were  to  be  conducted."  an  assignment  of  all   the  property  of  a 

When  one  may  not  assign. — There  firm,  for  the  benefit  of  creditors,  made  by 


it  has  been  held   that  although   the  ac-  cept  in  blank)  that  he  possesses  to  make 

ceptance  of  a  security  of  a  higher  dignity  notes  which  will  bind  the  firm,  the  form 

merges    and    extinguishes    the    original  of  the  paper  not  changing  the  principles 

cause  of  action ;  yet,  if  one  partner,  who  examined   above.      Thus,   one    copartner 

has  executed,  in  the  name  of  the  firm,  a  may  bind  the  firm  by  a  bill  of  exchange 

single  bill,  for  the  amount  of  a  debt  which  drawn  by  him  in  his  own  name  upon  the 

the  firm  owes,  afterwards  gives  a  promis-  firm  for  a  partnership   debt.     Dougal  v. 

sory  note  in  the  name  of  the  firm,  a  re"  Cowles,  5  Day  (Conn.)  511.     But  to  sup- 

covery  may  be  had  thereon  against  the  port  an  action  against  two  as  acceptors  of 

firm.  The  partnership  debt,  which  was  ex-  a  draft  in    their   partnership  name,  the- 

tinguished  by  the  acceptance  of  the  single  plaintiff   must    prove    the    partnership, 

bill,    is    thereby    revived.      Davidson    v.  and  that  one,  at  least,  of  the  defendants 

Kelly,  1  Md.  492.  accepted   the  draft.     Head  v.  Sleeper,  2a 

So,  if  one  copartner  make  a  negotiable  Me.  314. 
note  in  the  name  of  the  firm,  and  forge        The  act  of  drawing  a  bill  by  one  part- 

upon  it  the  name  of  another  person  as  ner,  in  his  own  name,  on  the  firm  of  which 

endorser,  a  bona  fide  holder  of  the   note,  he  is  a  member,  for  the  use  of  the  part- 

who  has  paid  a  valuable  consideration  for  nership,  is,  in  law,  an  acceptance  by  the 

it,  may  maintain  an  action  against  all  the  drawer  in  behalf  of  the  firm,  and  an  ac-i 

partners   to  recover   the   amount   of  the  tion  may  be  maintained  against  the  firm 

note,  although  it  was  made  without  their  as  on  an  accepted  bill.     Dougal  i'.  Cowles, 

knowledge  and  there  be  no  evidence  that  supra. 

they  derived  any  benefit  from  it.     Board-        An  individual  acceptance  of  an  order 

man  i'.  Gore,  15  Mass.  331.  on  two  firms  to  pay  what  might  be  in  their 

And  if  one  member  of  a  partnership  hands,  or  in  the  hands  of  any  partner,  by 
sign  a  note  representing  a  partnership  a  partner  of  both  intrusted  with  the  set- 
debt,  all  the  other  partners  are,  as  between  tlement  of  all  accounts  with  the  drawer,, 
themselves,  under  the  same  obligation  to  is  presumed  to  be  upon  consideration  of 
pay  the  note  as  the  signer.  Consequently,  having  the  funds  under  his  control,  and  is 
a  payment  of  the  note  by  a  partner  other  therefore  valid.  Prentiss  v.  Foster,  28 
than  the  signer,  although  from  his  private  Vt.  742. 

funds,  extinguishes  the  note ;  nor  will  it  But  an  acceptance  of  an  order  by  one 
be  revived  by  a  bare  promise  made  by  the  member  of  a  firm  will  not  bind  the  corn- 
signer  to  the  partner  who  paid  the  note  to  pany  where  there  is  no  allegation  that  the 
pay  the  same.  Sprague  v.  Ainsworth,  40  defendants  were  partners,  unless  the  part- 
Vt.  47.  nership  be  proved.     Meachem  v.  Batchel- 

Power  of  one  partner  to  draw  or  ac-  der,  3  Chand.  (Wis.)  316. 
cept   bills. — One  partner  has   the   same       So,  also,  it  is  no  part  of  the  business  of 

power  to  draw  bills  and  accept  them  (ex-  mercantile  partnersliips  to  draw  or  accept 

180 


CHAP.  I.,  §  II.]  DOCTRINES    OF    AGENCY.  130* 

jointly  with  iiimself.     A  bill  accepted  in  blank  by  one  partner  in  the 
name  of  the  firm  is  not  binding  on  it  except  in  favor  of  a  bona  fide 

some  of  the  partners  without  the  consent  v.  Stone,  34  Mo.  329 ;  Hughes  v.  Ellison, 

of  the  otiiers,  is  void,  not  only  as  to  the  5  Mo.  463;  Fish  v.  Miller,  5  Paige  (N. 

other  partners,  but  as  to  creditors.     Pettee  Y.)  26;  Wells  v.  March,  30  N.  Y.  344; 

V.  Orser,  18  How.  (N.  Y.)  Pr.  442;  Hook  Coope  v.  Bowles,  42   Barb.  (N.  Y.)   87  ; 

bills  in  order  to  pay  debts  of  individual  on  bills  of  exchange,   it  is  a  fact  from 

partners  or  as  security  for  third  persons,  which  the  jury  may  legally  infer  that  he 

and  such  acts  by  one  partner  in  the  name  had  authority  from  the  other  partners  so 

of  the  firm  create  no  obligation  against  to  do.     Bank  of  Kentucky  v.  Brooking,  2 

the  other  members  of  the  firm  unless  they  Litt.  (Ky.)  41. 

assent.    Tutt  v.  Addams,  24  Mo.  186.    But  But  one  partner  is  not  an  agent  for  his 

see  Freeman  v.  Eoss,  15  Ga.  252  ;  Flem-  copartner,  to  endorse  other  than  partner- 

ming  V  Prescott,  3  Kich.  (S.  C.)  307.  ship   paper.     Bowman   v.  Cecil    Bank,  3 

In  Louisiana  one  partner  cannot  bind  Grant  (Pa.)  Cas.  33.     Nor  can  he,  with- 

the  other  by  a  draft ;  but  where  the  action  out  the  consent  of  the  other,  endorse  a 

is  not  on  the  draft  only,  and  the  advances  note  for  the  benefit  of  a  third  person,  in 

for  which  it  was  given  are  shown  to  have  the  partnership  name.    Such  endorsement 

been  for  the  partnership,  such  other  part-  imposes  no  liability  on  the  firm.     Lang 

ner  will  be  bound  for  his  share  of  the  ad-  v.   Waring,   17    Ala.   145  ;    Chenowith   v. 

vances,  though  not  for  any  portion  of  the  Chamberlin,  6  B.  Mon.  (Ky.)  60;  Laverty 

damages  on  the  protested  bill.     Hermanos  v.  Burr,  1  Wend.  (N.  Y.)  529. 

V.  Duvigneaud,  10  La.  Ann.  114,  Power  of  one  partner  to  endorse  for 

Power  of  one  partner  to  endorse  accommodation. — Where  one  partner 
bills  and  notes.— So,  also,  a  partner  may  endorses  a  note  in  the  name  of  the  firm 
endorse  a  note  in  the  name  of  his  firm,  for  the  accommodation  of  a  third  person, 
and  it  may  be  declared  on  as  the  endorse-  without  express  authority  from  his  co- 
ment  of  the  firm.  Manhattan  Co.  v.  partners,  they  will  not  be  bound  thereby 
Ledyard,  1  Cai.  (N.  Y.)  191 ;  Commercial  as  against  the  partner  endorsing  the  note, 
Bank  v.  Lewis,  21  Miss.  226;  State,  Ac,  and  the  latter  having  paid  the  note,  a 
Bank  v.  Thompson,  42  N.  H.  369.  The  judgment  on  it,  recovered  by  an  innocent 
same  presumption  of  regularity  and  holder  against  all  the  members  of  the 
authority  attaches  as  in  the  case  of  the  firm,  is  not  evidence  to  charge  such  co- 
making  of  a  bill  or  note  by  one  partner  partners  with  contribution.  Berryhill  v. 
(see  su^ra,  in  this  note).  Manning  v.  McKee,  I  Humph.  (Tenn.)  31. 
Hayes,  6  Md.  5.  Even  though  it  appears  that  each  one 

Each  partner  has  the  same  right  to  of  a  firm  has,  with  the  assent  of  the  other 
raise  money  for  the  use  of  the  firm  by  members,  repeatedly  endorsed  accommo- 
endorsement  of  negotiable  paper,  as  to  dation  notes  in  the  firm  name,  this  is  no 
do  so  by  means  of  paper  already  is-  evidence  that  either  member  was  author- 
sued.  Moorehead  v.  Gilmore,  77  Pa.  St.  ized  to  sign  as  maker  and  surety.  Early 
118.  See,  also,  Manhattan  Co.  v.  Led-  v.  Reed,  6  Hill  (N.  Y.)  12. 
yard,  swpra.  Still,  a  bona  fide  holder,  without  notice, 

If  one  of  the  partners  has  been  in  the  of  an  accommodation  note,  endorsed  with 

habit  of  endorsing  the  name  of  the  firm  the  name  of  a  firm  by  one  of  the  mem- 

181 


130* 


IMPLIED   POWERS    OF    PARTNERS. 


[book  II.^ 


holder  for  value  without  notice  of  the  way  in  which  the  bill  was- 
accepted,  (z) 

Joint  and  several  notes. — A  joint  and  several  promissory  note  signed 
by  one  partner  for  himself  and  copartners  does  not  bind  them  sev- 

18    Abb.   (N.    Y.)   Pr.   442;    Palmer   v.  v.  Murray,  1  E.  D.  Smith  (N.  Y.)  341. 

Myers,  29  How.  (N.  Y.)  Pr.  8;  Kimball  For  there  is  no  implied  authority  result- 

V.  Hamiltou  Fire  Ins.  Co.,  8   Bosw.  (N.  ing  from  the  nature  of  the  contract  of 

Y.)  495;  Pettee  V.  Orser,  6  Id.  123;  Fisher  partnership  that  will  authorize  one  part- 


bers,  without  the  assent  of  the  others, 
may  collect  it  of  the  firm.  Austin  v.  Van- 
derniark,  4  Hill  (N.  Y.)  259;  Maudlin  v. 
Branch  Bank,  2  Ala.  502 ;  Stall  v.  Cats- 
kill  Bank,  18  Wend.  (N.  Y.)  46t^ ;  Wells 
V.  Evans,  20  Id.  251 ;  22  Id.  324 ;  Bank 
of  St.  Albans  v.  Gilliland,  23  Id.  311 ; 
Emerson  r.  Harmon,  14  Me.  271 ;  Catskill 
Bank  v.  State,  15  Id.  364  ;  Gildersleeve  v. 
Mahony,  5  Duer  (N.  Y.)  383;  Whaley  v. 
Moody,  2  Humph.  (Tenn.)  495. 

But  one  who  receives  a  note  so  en- 
dorsed, knowing  at  the  time  that  the  en- 
dorsement was  not  given  for  a  partner- 
ship debt  or  in  the  partnership  business, 
but  was  written  by  one  member  of  the 
firm,  in  a  matter  not  relating  to  the  firm's 
business,  but,  on  the  contrary,  for  the  ac- 
commodation of  another  person,  cannot 
recover  thereon  against  the  other  mem- 
bers of  the  firm.  Fielden  v.  Lahens,  9 
Bosw.  (N.  Y.)  436;  Whitmore  v.  Adams, 
17  Iowa  567  ;  Elliott  v.  Dudley,  19  Barb. 
(N.  Y.)  326. 

Power  of  one  partner  to  ^enev^r  bills 
and  notes. — Again,  a  partnership  note 
continues  binding  on  the  firm,  although 
renewed  with  the  signature  of  one  partner 
only,  when  no  change  in  the  liabilities  of 
the  parties  is  intended.  Horsey  v.  Heath, 
5  Ohio  358.  The  renewal  by  one  partner 
of  such  a  note,  after  the  dissolution  of 
the  partnership,  is  binding  upon  the  co- 
partner if  the  latter  recognized  and  con- 
sented to  it.  Sanborn  v.  Stark,  31  Fed. 
Rep.  18.  So,  a  member  of  a  firm  may  re- 
new a  note  originally  given  for  money  to 

1 


be  applied  to  his  individual  uses,  but 
which  was  signed  with  the  firm  name,  by 
his  only  partner,  with  the  understanding 
that  the  loan  was  made  on  the  credit  of 
the  firm.  Tilford  v.  Ramsey,  37  Mo.  563. 
S.  P.,  Wilson  V.  Richards,  28  Minn.  337. 

Power  of  one  partner  to  waive  grace^ 
or  demand  and  notice. — A  partner  may 
waive  grace  upon  a  firm  note  given  by 
him.  Pierce  v.  Jackson,  21  Cal.  636.  So-, 
also,  he  has  authority  to  waive  notice  of 
non-payment,  or  direct  any  particular 
mode  of  dishonor,  and  such  waiver  i& 
binding  upon  the  firm  if  the  holder  did 
not  know  that  it  was  fraudulently  done ;. 
and  it  makes  no  difference  that  the  note 
in  suit  was  not  running  at  the  time  of  the 
waiver.  But  a  partner  has  no  right,  as- 
against  his  copartners,  to  waive  notice 
upon  a  note  endorsed  by  him  for  his  own 
benefit.  Windham  County  Bank  v.  Ken- 
dall, 7  R.  I.  77.  And  a  settling  partner, 
after  dissolution  of  the  partnership  and 
publication  of  notice  thereof,  has  power 
to  waive  demand  and  notice  of  a  note  en- 
dorsed by  the  firm  during  its  existence, 
and  all  the  partners  are  bound  thereby. 
Seldner  v.  Mount  Jackson  Nat.  Bank 
(Md.),  8  All.  Rep.  262.  Where  a  note  is 
endorsed  by  a  partnership  in  the  partner- 
ship name,  an  agreement  by  one  of  the 
partners  to  receive  notice  at  a  particular 
place  is  binding  upon  his  copartners. 
Nutt  V.  Hunt,  4  Smed.  &  M.  (Miss.) 
702. 

(2)  Hogarth  v.  Latham,  L.  R.,  3  Q.  B>. 
D.  643. 
82 


CHAP.  I.,  §  II.] 


DOCTRINES    OF    AGENCY. 


ISO^* 


erally  ;  (a)  but  it  does  bind  them  and  hrm  jointly  (6)  and  himself  sep- 
arately, (c) 


ner  to  make  a  general  assignment  of  the 
partnership  effects,  without  the  knowledge 
or  consent  of  his  copartner.  Kirby  v. 
Ingersoll,  Harr.  (Mieh.)  Ch.  172;  S.  C, 

1  Dougl.  477 ;  Wetter  v.  Schlieper,  4  E. 
D.  Smith  (N.  Y.)  707  ;   Kelly  v.   Baker, 

2  Hilt.  (N.  Y.)  531  ;  Haggerty  v.  Gran- 
ger, 15  How.  (N.  Y.)  Pr.  243;  Paton  v. 
Wright,  Id.  481. 

When  a  partnership  formed,  not  for  the 
purpose  of  buying  and  selling,  but  for  a 
business  in  which  the  continued  owner- 
ship of  the  partnership  property  is  indis- 
pensable, has  closed,  or  is  about  closing, 
neither  of  the  partners  can  make  an  as- 
signment or  sale  of  the  joint  property, 
even  for  the  payment  of  creditors,  when 
the  other  is  present  and  capable  of  acting 
in  the  matter,  without  his  consent;  and, 
in  such  a  case,  mere  knowledge  of  the 
intended  sale  will  not  be  sufficient  evi- 
dence of  assent.  Sloan  v.  Moore,  37  Pa. 
St.  217. 

Power  of  one  partner  to  assign  with 
preferences. — In  Egberts  v.  Wood  (3 
Paige  (N.  Y.)  517),  Chancellor  Walworth 
says :  "  It  appears  to  be  the  better  opin- 
ion that  one  of  the  partners,  at  any  time 
during  tiie  existence  of  the  partnership, 
may  assign  the  partnership  effects,  in  the 
name  of  the  firm,  for  the  payment  of  the 
debts  of  the  company,  although,  by  such 
assignment,  a  preference  is  given  to  one 
set  of  creditors  over  another.  In  the  case 
of  Dickinson  v.  Legare  and  others,  cited  by 
the  complainant's  counsel  from  the  equity 
reports  of  South  Carolina  (1  Desaus.  537), 
the  Court  of  Chancery  of  that  state  de- 
cided against  the  validity  of  an  assign- 
ment of  all  the  partnership  effects,  made 


by  one  of  the  partners  without  the  knowl- 
edge or  consent  of  the  other,  to  pay  the 
debt  of  a  particular  creditor.  Chancellor 
Matthews,  who  delivered  the  opinion  of 
the  court  in  that  case,  admits  that  it  was 
a  question  of  the  first  impression,  no  case 
analogous  to  it  havmg  come  under  the 
view  of  the  court.  That  assignment,  how- 
ever, was  made  under  very  peculiar  cir- 
cumstances. The  company,  during  the 
revolutionary  war,  were  doing  business  in 
this  country,  and  while  one  of  the  part- 
ners was  on  a  voyage  to  France  he  was 
taken  by  a  British  ship  of  war  and  car- 
ried as  a  prisoner  to  England,  where  he 
was  prevailed  upon  by  a  creditor  residing 
there  to  give  him  a  general  assignment 
of  all  the  partnership  funds,  which  funds 
were  then  in  this  country,  to  secure  the 
payment  of  his  particular  debt  against 
the  firm.  Although  the  decision  was  put 
upon  the  general  groimd  that  one  partner 
had  not  the  right  to  assign  the  partner- 
ship funds  in  this  manner  without  the 
consent  of  his  copartner,  there  is  no  doubt 
that  the  particular  circumstances  under 
which  that  assignment  took  place  had  a 
very  considerable  influence  in  bringing 
the  mind  of  the  Chancellor  to  that  result. 
The  assignment  in  that  case  being  made 
by  a  citizen  of  one  of  the  United  States, 
during  the  existence  of  the  war,  to  an 
alien  enemy  and  in  an  enemy's  country, 
was  probably  void  by  the  laws  of  war,  so 
far,  at  least,  as  to  prevent  its  being  car- 
ried into  effect  by  any  of  the  courts  of 
this  country ;  and  certainly  it  could  not 
be  considered  as  made  according  to  any 
mercantile  usage.  That  decision,  how- 
ever, has  been  recently  overruled  by  the 


(ft)  See  Perring  v.  Hone,  4  Bing.  32  ;  2        (c)  See  Elliot  v.  Davis,  2  Bos.  &  P.  338 ; 
Car.  &  P.  401.  Gillow  v.  Lillie,  1  Bing.  N.  C.  695. 

(6)  Maclae  v.  Sutherland,  3  El.  &  B.  1. 

183 


330*  IMPLIED    POWERS   OF    PARTNERS.  [bOOK    II., 

Powers  of  attorney  to  draw  bills,  &c. — In  consequence  of  the  doc- 
trine that  every  member  of  an  ordinary  trading  partnership  has  au- 

Court  of  Appeals  in  the  same  state,  in  the  insolvent  concern.  As  a  court  of  equity, 
case  of  Robinson  v.  Crowder,  4  McCord  upon  a  proper  application,  would  protect 
(S.  C.)  519,  where  it  was  held  that  an  the  rights  of  the  several  partners  in  this 
assignment  by  one  partner  of  all  the  respect  before  an  assignment  had  actually 
effects  of  the  firm,  in  payment  of  the  been  made,  and  if  they  could  not  agree 
partnership  debts,  was  valid  as  against  among  themselves,  would  appoint  a  re- 
his  copartners.  In  Pearpoint  v.  Graham,  ceiver  of  the  effects  of  the  partnership, 
4  Wash.  (U.  S.)  232,  in  the  Circuit  Court  and  would  apply  them  in  payment  of  all 
of  the  United  States  for  the  District  of  the  debts  due  from  the  firm  ratably,  it 
PeuDsylvania,  Judge  Washington  doubled  might  perhaps  apply  the  same  rule  to  tlie 
the  right  of  one  of  the  partners,  without  case  of  an  assignment  to  a  trustee  for  the 
the  consent  of  the  others,  to  assign  the  payment  of  the  favorite  creditors  of  one 
whole  of  the  partnership  effects  in  such  of  the  partners  only,  wliere  the  equitable 
a  manner  as  to  terminate  the  partnership,  rights  of  the  parties  had  not  in  fact  been 
But  he  declined  expressing  any  decided  changed  by  any  proceedings  under  the 
opinion  upon  this  question,  which  he  con-    assignment." 

sidered  unnecessary  to  the  decision  of  .the  In  a  later  case,  however  (Havens  v. 
cause  then  before  him,  as  in  that  case  the  Hussey,  5  Paige  (N.  Y.)  30),  Chancellor 
copartner  had  subsequently  assented  to  Walworth  qualified  his  former  opinion 
the  assignment.  In  Mills  v.  Barber,  4  and  limited  his  previous  decision,  saying  : 
Day  (Conn.)  428,  the  Supreme  Court  of  "In  the  case  of  Egberts  v.  Wood,  3  Paige 
Errors  in  Connecticut  decided  that  one  517, 1  had  occasion  to  refer  to  most  of  the 
partner,  without  the  knowledge  of  the  cases  relative  to  assignments  of  partner- 
other,  might  make  a  valid  assignment  of  ship  effects  made  by  one  of  the  copart- 
partnership  funds  to  secure  the  payment  ners.  And  I  then  arrived  at  the  conclu- 
of  a  debt  due  from  the  firm.  See  Fork-  sion  that  from  the  nature  of  the  contract 
ner  v.  Stuart,  6  Gratt.  (Va.)  197 ;  and  in  of  copartnership  one  of  the  partnership 
Harrison  v.  Sterry,  5  Cranch  (U.  S.)  289,  might  make  a  valid  assignment  of  the 
the  Supreme  Court  of  the  United  States  partnersliip  effects,  or  so  much  thereof  as 
decided  that  one  of  the  partners  might  was  necessary  for  that  purpose,  in  the 
assign  the  partnership  effects  to  a  trustee  name  of  the  firm,  directly  to  one  or  more 
for  the  security  or  payment  of  the  cred-  of  the  creditors  in  payment  of  his  or  their 
itors  of  the  firm,  without  the  concurrence  debts,  altiiough  the  effect  of  such  assign- 
of  his  copartners.  I  do  not  intend,  in  ment  was  to  give  a  preference  to  one  set 
this  case,  to  express  any  opinion  in  favor  of  creditors  over  another.  But  as  it  was 
of  the  validity  of  such  an  assignment  of  not  necessary  for  the  decision  of  that  case, 
the  partnership  effects  to  a  trustee  by  one  I  did  not  express  any  opinion  as  to  the 
partner  against  the  known  wishes  of  his  validity  of  an  assignment  of  the  partner- 
copartner,  and  in  fraud  of  his  right  to  ship  effects  by  one  partner,  against  the 
participate  in  the  distribution  of  the  known  wishes  of  his  copartner,  to  a  trustee, 
partnership  funds  among  the  creditors,  for  the  benefit  of  the  favorite  creditors  of 
or  in  the  decision  of  the  question  which  the  assignor,  in  fraud  of  the  rights  of  his 
of  those  creditors  should  have  a  prefer-  copartner  to  participate  in  the  distribu- 
ence  in  payment  out  of  the  effects  of  an    tion  of  the  partnership  eflects  among  the 

184 


DOCTRINES    OF    AGENCY. 


130* 


€HAP.  I.,  §  II.] 

thority  to  draw,  accept  and  endorse  bills  in  its  name  if  a  member  of 
such  a  partnership  goes  abroad  and  gives  his  copartner  a  power  of 


creditors,  or  in  the  decision  of  tlie  ques- 
tion as  to  wliich  of  the  creditors,  if  any, 
should  have  a  preference  in  payment  out 
of  the  effects  of  an  insolvent  concern. 
The  present  case  presents  that  point  dis- 
tinctly for  the  decision  of  the  court.  And, 
upon  the  most  deliberate  examination  of 
the  question,  I  am  satisfied  that  the  de- 
cision of  the  Vice  Chancellor  is  correct ; 
that  such  an  assignment  is  both  illegal 
and  inequitable,  and  cannot  be  sustained. 
The  principle  upon  which  an  assignment 
by  one  partner,  in  payment  of  a  partner- 
fihip  debt,  rests  is  that  there  is  an  implied 
authority  for  that  purpose  from  his  co- 
partner, from  the  very  nature  of  the  con- 
tract of  partnership;  the  payment  of  the 
company  debts  being  always  a  part  of  the 
necessary  business  of  the  firm.  And  while 
either  party  acts  fairly  within  the  limits 
of  sucli  implied  authority,  his  contracts 
are  valid,  and  binding  upon  his  copartner. 
One  membei^  of  the  firm,  therefore,  with- 
out any  express  authority  from  the  other, 
may  discharge  a  partnership  debt,  either 
by  the  payment  of  money,  or  by  the  trans- 
fer to  the  creditor  of  any  other  of  the  co- 
partnership effects ;  although  there  may 
not  be  sufficient  left  to  pay  an  equal 
amount  to  the  other  creditors  of  the  firm. 
But  it  is  no  part  of  tlie  ordinary  business 
of  a  copartnership  to  appoint  a  trustee  of 
all  the  partnership  effects,  for  the  purpose 
of  selling  and  distributing  the  proceeds 
among  the  creditors  in  unequal  propor- 
tions. And  no  such  authority  as  that  can 
be  implied.  On  the  contrary,  such  an  ex- 
ercise of  power  by  one  of  the  firm,  with- 
out the  consent  of  the  other,  is  in  most 
cases  a  virtual  dissolution  of  the  copart- 
nership, as  it  renders  it  impossible  for 
the  firm  to  continue  its  business.  The 
case  of  Harrison  v.  Sterry,  5  Cranch  (U. 
S.)  289,  which,  perhaps,  has  gone  as  far 


as  any  other  on  the  subject,  was  not  sus- 
tained as  an  assignment  of  all  the  part- 
nership effects  to  a  trustee  for  the  payment 
of  preferred  creditors.  It  professed  to  be 
the  transfer  of  a  certain  specific  portion  of 
the  partnership  property,  for  the  purpose 
of  saving  the  credit  of  the  firm,  and  to 
raise  funds  to  carry  on  the  partnership 
business.  And  upon  the  ground  that  it 
was  not  in  fact  what  it  professed  to  be, 
but  was  merely  intended  to  give  a  prefer- 
ence to  particular  creditors,  the  court  held 
the  assignment  void,  as  a  fraud  upon  the 
bankrupt  laws.  It  was  only  upon  the 
supposition  that  the  assignment  was  in 
fact  what  it  professed  to  be  that  Chief 
Justice  Marshall  held  it  to  be  within  the 
power  usually  exercised  by  a  managing 
partner."  See,  also,  Wilcox  v.  .Jackson,  7 
Colo.  521 ;  Bull  v.  Harris,  18  B.  Mon. 
(Ky.)  195  ;  Matter  of  Lowenstein,  7  How. 
(N.  Y.)  Pr.  100. 

In  Hitchcock  v.  St.  John  (Hoffm.  (N. 
Y.)  Cli.  511),  Hoffman,  V.  C,  says,  as  to 
the  power  to  prefer  creditors  :  "  The 
power  to  make  a  sale  of  the  partnership 
effects  resides  in  each  partner  while  the 
relation  exists.  The  power  to  bind  the 
firm  upon  a  purchase  equally  exists  in 
each,  although  the  goods  never  came  into 
joint  stock.  All  these  instances  of  au- 
thority, as  well  as  that  to  make  negotiable 
paper,  flow  from  the  principle  that  each 
is  the  agent  of  the  whole.  But  for  what 
is  he  such  agent?  For  the  purposes  of 
carrying  on  the  business  of  the  firm,  and 
because  the  authority  to  do  the  act  is  im- 
plied from  the  nature  of  the  business. 
Best,  J.,  in  Barton  v.  Williams,  5  Barn.  & 
Aid.  395,  405.  Now,  a  transfer  of  all  the 
effects  of  a  firm  for  payment  of  its  debts,  is 
a  virtual  dissolution  of  the  partnership.  It 
supersedes  all  the  business  of  the  firm  as 
such.     It  takes  from  the  control  of  each 


185 


130*  IMPLIED   POWERS   OF   PARTNERS.  [bOOK   II.^ 

attorney  to  manage  his  affairs,  and  draw,  accept  or  endorse  bills  in  hi& 
name,  this  authority  warrants  the  attorney  in  putting  his  principal's 
name  to  non-partnership  bills  only,  his  authority  to  put  the  partner- 
ship name  to  partnership  bills  being  independent  of  and  unaffected  by 
the  letter  of  attorney,  (d) 

Bills,  &c.,  of  non-trading  partnerships. — With  respect  to  partner- 
ships which  are  not  trading  partnerships,  the  question  whether  one 
partner  has  any  implied  authority  to  bind  his  copartners  by  putting 
the  name  of  the  firm  to  a  negotiable  instrument,  depends  upon  the 

all  the  property  with  which  such  business  whole.  The  capacity,  integrity  and  in- 
is  conducted.  The  purposes  of  the  busi-  dustry  of  another  are  brought  to  the  man- 
ness,  then,  clearly  do  not  require  that  such  ag«ment,  and  the  fitness  of  the  party 
a  power  should  be  implied.  What  other  selected  is  judged  of  solely  by  one  mem- 
reason  is  there  for  holding  that  by  the  ber  of  the  firm.  From  what  part  or  prin- 
contract  of  partnership  it  is  to  be  inferred  ?  ciple  of  the  partnership  relation  can  such 
I  do  not  think  that  the  principle  insisted  an  authority  emanate?  It  is  impossible 
upon  by  the  counsel  for  the  defendant  is  to  uphold  a  rule  which  would  rob  every 
the  true  one,  namely,  that  such  a  transfer  member  of  a  firm  of  a  voice  and  share  in 
is  only  invalid  when  it  operates  as  a  fraud  this  last,  and  probably  most  important^ 
upon  the  other  partner ;  when,  for  exam-  act  of  a  failing  house.  It  is  no  contradic- 
ple,  it  is  made  against  his  wishes  and  to  tion  of  this  doctrine  that  where  the  as- 
give  preferences  which  he  is  unwilling  to  signment  is  made  after  insolvency,  and 
give.  It  strikes  me  that  the  principle  divides  the  funds  with  perfjfct  equality 
upon  which  the  invalidity  is  established  among  all  the  creditors,  it  will  be  sup- 
lies  deeper.  I  consider  thai  neither  dur-  ported.  It  is  clear  that  either  partner 
ing  the  existence  nor  after  the  dissolution  might  file  a  bill,  obtain  an  injunction  and 
of  a  partnership,  can  such  a  transfer  be  receiver  and  insure  an  equal  distribution 
made,  because  of  want  of  power  in  any  of  all  the  funds.  An  assignment  fairly 
one  partner  to  make  it.  A  direct  pay-  securing  the  same  equality  is  an  object  of 
ment  of  money  or  a  transfer  of  property  favor  in  this  court.  In  the  absence  of 
to  an  acknowledged  creditor  is  an  admitted  any  indication  on  the  part  of  the  copart- 
and  a  necessary  power  during  the  exist-  ner  of  a  contrary  intention,  it  may  well  be 
ence  of  the  partnership.  We  probably  inferred  that  he  consents  to  do  justice.  A 
are  compelled  by  authorities  to  go  so  far  serious  question  might  indeed  arise  in  a 
as  to  say  that  it  is  a  necessary  surviving  case  in  which,  after  such  an  assignment  by 
power  after  a  dissolution,  in  whatever  way  one  partner,  the  other  should  make  a 
that  is  effected.  All  that  is  requisite  to  transfer  of  a  specific  piece  of  property  in 
test  the  transfer  is  the  amount  of  debt  and  payment  of  a  just  debt  of  the  firm." 
the  extent  of  the  fund  assigned.  But  In  Heye  v.  Bolles  (33  How.  (N.  Y.) 
upon  an  assignment  of  the  property  of  a  Pr.  266),  a  partner  in  two  separate  firms 
firm  to  a  trustee,  a  complication  of  duties  became  the  purchaser  of  the  whole  prop- 
and  responsibilities  is  involved.  An  agent  erty  of  each,  and  afterward  made  a  general 
is  appointed  to  control  and  dispose  of  the    assignment  for  the  benefit  of  creditors,  iiv 


(d)  Attwood  V.  Munnings,  7  Barn.  &  C.  278. 

186 


CHAP.  I.,  §  ir.]  DOCTRINES   OF.  AGENCY.  130* 

nature  of  the  business  of  the  partnership,  (e)  In  the  absence  of  evi- 
dence showing  necessity  or  usage,  the  power  has  been  denied  to  one  of  sev- 
eral mining  adventurers,  (/)  quarry  workers,  (^)  *  farmers,  (/i) 
solicitors,  (i)  Where  two  firms  agreed  to  accept  each  other's  ^ 
drafts,  and  to  share  the  profits  arising  from  their  sale,  it  was  held  that 
one  of  these  firms  was  not  liable  to  a  person  who  had  purchased  a  bill 
drawn  on  it  by  the  other  firm,  but  which  the  drawees  had  not 
accepted,  [k) 

If,  however,  a  member  of  a  non-mercantile  firm  concurs  in  drawing, 
or  authorizes  his  partner  to  draw  a  bill  in  the  name  of  the  firm,  he 
impliedly  authorizes  its  endorsement  in  the  same  name,  for  the  purpose 
for  which  it  was  drawn.  (I)  H 

which  he  directed  his  assignee  to  pay  first  partnership    effects,     preferring     certain 

his  individual  debts.     It  was   held   that  creditors  to  others,  which  was  contrary 

this  assignment  was  fraudulent  as  against  to  a  stipulation  in  the  articles  of  dissolu- 

creditors  of  either  firm.  tion,  providing  for  the  equal  payment  of 

In  Marsh  v.  Bennett  (5  McLean  (U.  S.)  all  creditors,  was  held  void. 
117),  an  assignment,  by  a  partner,  of  the 

(e)  See  Dickinson  v.  Valpy,  10  Barn.  &  matter  not  connected  with  their  business 

C.  128.  ( Walworth  v.  Henderson,  9  La.  Ann.  339), 

(/)  Brown  I).  Byers,  16  Mees.  &  W.  252;  the  rule  is  otherwise  as  to   non-trading 

Dickinson  v.  Valpy,   10  Barn.  &  C.  128.  partnerships,  one  member  of  which  cannot 

Compare  Brown  v.  Kidger,  3  Hurlst.  &  N.  so  bind  his  copartner,  even  though  it  be  for 

853.  a  debt  of  the  firm,  unless  he  has  express 

{g)  Thicknesse  v.  Bromilow,  2  Cr.  &  J.  authority  therefor  from  his  copartner,  or 

425.  the  giving  of  such  instruments  is  neces- 

(h)  Greenslade  v.  Dower,  7  Barn.  &  C.  sary  to  the  carrying  on  of  the  partnership 

635.  business,  or  is  usual  in  similar  partner- 

(i)  Hedley  v.  Bainbridge,  3  Q.  B.  316 ;  ships ;  and  the  burden  is  upon  the  party 

Levy  V.  Pyne,  Car.  &  M.  453;  Harman  v.  suing  on  such  note  or  bill  to  prove  such 

Johnson,  2  El.  &  B.  61,  and  3  Car.  &  K.  authority,  necessity  or  usage.     Smith  v. 

272.  Sloan,  37  Wis.  285.     See,  also.  Prince  v. 

(k)  Nicholson  v.  Kicketts,  2  El.  &  E.  Crawford,  50  Miss.  344, 

497.  When,   however,  a  partnership  is  en- 

(Z)  See  Garland  v.  Jacomb,   L.    R.,   8  gaged  in  a  coursje  of  business  in  which  the 

Ex.  216  ;  Lewis  v.  Keilly,  1  Q.  B.  349.  use  of  its  commercial  paper  is  appropriate 

11.  Bills  and  notes  of  non-trading  and  reasonably  to  be  expected,  or  does  in 

partnerships. — While    the   law   holds   a  fact  make  use  of  it,   with  the   common 

commercial  firm  bound  to  any  bona  fide  knowledge  of  the   members  of  the  firm, 

holder  of  a  note  or  draft  drawn,  accepted  whenever  the  convenience  or  necessities 

or  endorsed  by  any  partner  in- the  part-  of  the  firm  may  require,  the  firm  is  liable 

nership  name,    though  without   the    au-  upon  commercial  paper  made  in  its  name 

thority  of  the  other  partners,  and  in  a  by  one  of  its  members  to  one  who  takes 

187 


331* 


IMPLIED    POWERS    OF    PARTNERS. 


[book  II., 


Authonty  to  transfer  bill. — It  must  be  borne  in  mind  that  a  person 
who  lias  no  authority  to  use  the  name  of  another,  so  as  to  render  him 


it  bona  fide,  in  the  usual  course  of  business, 
before  maturity,  and  for  a  valuable  con- 
eideration,  notwithstanding  any  fraud  of 
the  partner  making  the  paper,  or  misap- 
propriation by  him  to  other  uses  than 
those  of  his  firm.  Nat.  Exchange  Bank  v 
White,  30  Fed.  Kep.  412. 

Such  Ihibility  is  not  restricted  to  the 
case  of  a  trading  copartnership,  if  by  that 
term  is  intended  one  engaged  in  the  busi- 
ness of  buying  and  selling,  though  it 
would,  as  a  rule,  include  such,  but  ex- 
tends to  all  cases  where  the  nature  of  the 
business  fairly  and  reasonably  implies 
such  use  as  an  appropriate  incident  there- 
to, or  where  the  actual  course  of  business 
pursued  adopts  the  practice  of  issuing  the 
mercantile  paper  of  the  firm  to  accommo- 
date its  necessities  or  convenience  when- 
ever the  occasions  occur,  and  such  occa- 
sions do  in  fact  occur,  and  are  thus  pro- 
vided for.     lb. 

It  thus  becomes  important  to  ascertain 
what  classes  of  partnerships  are  deemed, 
in  law,  to  be  commercial  or  trading  part- 
nerships, and  this,  of  course,  depends  en- 
tirely upon  the  character  of  the  business 
<ione  or  intended  to  be  done. 

The  following  have  been  held  to  be  com- 
mercial partnerships  in  such  a  sense  that 
negotiable  paper  made  or  endorsed  by  one 
partner  will  bind  the  others:  A  firm  engaged 
in  buying  and  selling  cattle  (Smith  v. 
Collins,  115  Mass.  388;  Wagner  v.  Sim- 
mons, 61  Ala.  143) ;  or  in  making  collec- 
tions, even  though  that  be  not  its  princi- 
pal business  (Van  Brunt  v.  Mather,  48 
Iowa  503) ;  or  in  the  manufacture  of 
refrigerators  (Holt  v.  Simmons,  16  Mo. 
App.  97) ;  or  in  the  real  estate  brokerage 
business  (Du  Bois  v.  Lamson,  18  N.  Y. 
Week.  Dig.  490). 

On  the  other  hand,  the  following  have  been 
held  not  to  be  trading  firms  within  the  rule : 


A  firm  jointly  owning  and  cdltivating  land 
(Benton  v.  Roberts,  4  La.  Ann.  216) ;  a 
grocery  firm  [accommodation  paper] 
(Mechanics'  Bank  v.  Livingston,  33  Barb. 
(N.  Y.)  458);  a  livery  stable  firm  (Levi 
V.  Latham,  15  Neb.  509;  S.  C,  48  Am. 
Rep.  361);  a  firm  engaged  in  the  busi- 
ness of  conducting  a  theatre  (Pease  ?;.  Cole, 
53  Conn.  53;  S.  C,  55  Am.  Rep.  53) ;  a 
mining  firm  (Judge  v.  Braswell,  13  Bush. 
(Ky.j  67) ;  a  firm  of  commission  mer- 
chants (Hibbler  v.  De  Forrest,  6  Ala.  92) ; 
partners  in  the  milling  business  (Graves 
V.  Kellenberger,  51  Ind.  66) ;  or  in  the 
tavern-keeping  business  (Cocke  v.  Branch 
Bank,  3  Ala.  175) ;  or  in  the  practice  of 
physic  (Crosthwait  v.  Ross,  1  Humph. 
(Tenn.)  23) ;  or  in  the  practice  of  law 
(Breckenridge  v.  Shrieve,  4  Dana  (Ky.) 
375) ;  or  in  the  cultivation  of  sugar  (Burn- 
ley ».  Rice,  18  Tex.  481);  or  in  general 
agricultural  work  (Ulerg  v.  Ginrich,  57 
111.  531 ;  Hunt  v.  Chapin,  6  Lans.  (N.  Y.) 
139  ;  McCrary  v.  Slaughter,  58  Ala.  230) ; 
a  firm  engaged  in  the  insurance,  real 
estate  and  collecting  business  (Deardorf  i;. 
Thacher,  78  Mo.  128 ;  S.  C,  47  Am.  Rep. 
95;  a  firm  of  mere  brokers  (Third  Bank 
V.  Snyder,  10  Mo.  App.  211);  a  partner- 
ship between  stevedores  (Benedict  v. 
Thompson,  33  La.  Ann.  196) ;  a  partner- 
ship in  the  operation  of  a  threshing- 
machine  (Horn  V.  Newton  City  Bank,  32 
Kan.  518). 

Various  applications  of  the  rule. — 
A  partnership  was  formed  for  tiie  purpose 
of  carrying  on  a  farm  and  a  steam  saw- 
mill, and  the  firm  also  engaged  in  trade, 
as  the  jury  found.  The  managing  part- 
ner drew  bills  in  the  name  of  the  firm,  on 
an  accommodation  acceptor,  to  raise 
money.  Held,  that  the  firm  was  bound 
by  them.  Kimbro  v.  Bullitt,  22  How. 
(U.S.)  256. 


188 


CHAP.  I.,  §  II.] 


DOCTRINES   OF   AGENCY. 


131= 


liable  on  a  bill  or  note,  may  nevertheless  have  sufficient  authority  to 
transfer  the  property  therein,  (m) 

Before  leaving  the  subject  of  negotiable  instruments,  it  may  be  ob- 
served that  it  is  often  difficult  to  say  whether  they  purport  to  be  the 
paper  of  a  firm,  or  only  that  of  some  one  or  more  of  the  partners. 
Unless  the  paper  purports  to  be  the  paper  of  a  firm,  no  one  whose 
name  is  not  on  the  paper  is  liable  to  be  sued  on  it.  [n)  This  subject 
will  be  adverted  to  hereafter. 

7.  Bonds. — See  "  Borrowing  raoney  and  deeds/' 

8.  Borrowing  money.  General  power  to  borrow. — One  of  the  most 
important  of  the  implied  powers  of  a  partner  is  that  of  borrowing 
money  on  the  credit  of  the  firm.  The  sudden  exigencies  of  commerce 
render  it  absolutely  necessary  that  such  power  should  exist  in  the 
members  of  a  trading  partnership,  and  accordingly  in  a  comparatively 
early  case  this  power  was  clearly  recognized,  (o)  It  has  been  already 
seen  that  one  partner  can  bind  the  firm  by  a  bill  or  note,  upon  which 


Where  three  persons  are  engaged  in 
carrying  on  a  steam  saw-mill  in  copart- 
nership for  a  specified  term,  and  during 
its  continuance  the  note  of  the  firm  is 
given,  with  the  concurrence  of  two  of  the 
partners,  for  necessary  supplies  ordered 
by  one  of  them,  for  the  hands  engaged  in 
carrying  on  the  business,  the  partnership 
is  bound  by  it.  Johnston  v.  Dutton,  27 
Ala.  245. 

The  members  of  a  mining  partnership 
may  bind  one  another  in  matters  which 
one  dealing  with  them  might  fairly  pre- 
sume to  be  within  the  scope  of  the  busi- 
ness, not,  perhaps,  by  a  promissory  note, 
but  by  dealings  on  credit  for  working  the 
mine.     Manville  v.  Parks,  7  Colo.  128. 

Where  one  member  of  a  firm  had  put 
in  as  stock,  his  saw-mill  and  a  quantity 
of  saw-logs,  against  a  money  equivalent 
put  in  by  the  other — Held,  that  a  firm 
note  the  former  had  given  for  a  balance 
due  upon  the  saw-logs  would  not  bind  the 
firm  although  it  had  received  the  benefit 
of  the  logs — no  acquiescence  of  the  copart- 
ner being  shown.  Wiltram  v.  Van  Wor- 
mer,  44  111.  525. 


A  promissory  note  given  by  one  of  two 
partners  in  the  business  of  farming  and 
coopering,  signed  "  A  B  &  C  D,"  is  bind- 
ing upon  both.  McGregor  v.  Cleveland, 
5  Wend.  (N.  Y.)  475. 

Where  two  members  of  a  partnership, 
formed  for  the  purpose  of  speculating  in 
lands,  loaned  money  of  the  firm,  in  good 
faith,  to  a  manufacturer,  as  an  inducement 
to  establish  mills  on  their  lands,  whereby 
the  lands  were  expected  to  be  enhanced 
in  value,  and  afterwards  the  mills  proved 
a  bad  enterprise  and  a  part  of  the  debt  was 
l-ost,  a  court  of  chancery  refused  to  relieve 
a  third  partner,  who  did  not  assent  to  the 
loan,  from  bearing  his  share  of  the  loss. 
Blair  v.  Johnston,  1  Head  (Tenn.)  13. 

(m)  See  on  this  subject,  Smith  v.  John- 
son, 3  Hurlst.  &  N.  222  ;  Heilbut  v.  Nevill, 
L.  R.,  5  C.  P.  478,  where,  however,  the 
property  was  held  not  to  pass. 

{n)  Bills  of  Ex.  Act,  1882,  §  23. 

(o)  See  Lane  v.  Williams,  2  Vern.  277, 
292;  Roth  well  v.  Humphries,  1  Esp.  406  ; 
Denton  v.  Rodie,  3  Camp.  493 ;  Lloyd  v. 
Freshfield,  2  Car.  &  P.  333;  Ex  parte 
Bonbonus,  8  Ves.  540 ;  see,  too,  De  Rib- 


189 


132*  IMPLIED    POWERS    OF    PARTNERS.  [bOOK   II., 

^  09-1  money  may  be  obtained,  by  the  every *day  process  of  discouut- 
-'  iug ;  and  the  power  of  one  partner  to  pledge  partnership  goods 
for  advances  is  equally  well  established,  (p)  At  the  same  time,  the 
power  of  borrowing  money,  like  every  other  implied  power  of  a  part- 
ner, only  exists  where  it  is  necessary  for  the  transaction  of  the  partner- 
ship business  in  the  ordinary  way;  and,  consequently,  if  money  is 
borrowed  by  one  partner-  for  the  declared  purpose  of  increasing  the 
partnership  capital,  (g)  or  of  raising  the  whole  or  part  of  the  capital 
agreed  to  be  subscribed  in  order  to  start  the  firm,  (/•)  or  if  the  business 
is  such  as  is  customarily  carried  on  on  ready-money  principles,  e.  g,, 
mining  on  the  cost-book  principle,  (.s)  or  without  borrowing,  as  in  the 
case  of  solicitors,  {t)  the  firm  will  not  be  bound,  unless  some  actual 
autiiority  or  ratification  can  be  proved.  Still  less  will  the  firm  be 
bound  where  borrowing  is  prohibited,  and  the  person  advancing  the 
money  is  aware  of  the  prohibition,  (u)  12 

eyre  v.  Barclay,  23  Beav.  125  ;  Gordon  v.  borrows  money,  not  expressly  on  his  indi- 

EUiii,  7  Man.  &  G.  607  ;  Brown  v.  Kidger,  vidual  credit,  if  it  was  used  for  the  benefit 

3  Hurlst.  &  N.  853.  of  the  firm.     Church  v.  Sparrow,  5  Wend. 

(p)  See,  infra,  "Mortgage"  and  "Pledge."  (X.  Y.)  223. 

(q)  Fisher  v.  Taylor,  2  Hare  218.  An  acting  partner  may,  for  the  benefit 

(r)  Greenslade  v.  Dower,  7  Barn.  &  C.  of  his  firm,  and  in  order  to  raise  money, 

635.  use  the  name  of  the  firm,  by  accepting  a 

(s)  Hawtayne  i'.  Bourne,  7  Mees.  &  W.  bill  of  exchange,  to  be  exchanged  for  the 

595 ;    Burmester    v.   Norris,  6  Ex.  796 ;  acceptance   of    another    firm.      Gano    v. 

Ricketts  v.  Bennett,  4  C.  B.  686.  Samuel,  14  Ohio  592.     So,  if  a   partner 

{t)  Plumer  v.  Gregory,  18  Eq.  624,  as  borrows  money  upon  the  security  of  his 

to  the  £1700.  firm's  acceptance  of   another's  draft,  the 

(u)  Worcester  Corn  Exchange   Co.,  3  acceptance,    in    the    absence    of    matter 

DeG.,  M.  &  G.  180.     See,  also,  the  cases  which  will  avoid  it,  establishes  the  rela- 

in  the  next  note.  tion  of  debtor  and  creditor  to  the  amount 

12.  Power  of  one  partner  to  borrow  of  the  draft,  between  the  firm  and    the 

money  on  credit  of  firm. — The  general  lender.     Saltmarsh  v.  Bower,  22  Ala.  221. 

rule  is  that  all  the  members  of  a  commer-  Whether  a  loan  made  to  one  partner  is 

cial   firm  are  liable  for  money  borrowed  loaned  upon  his  creditor  that  of  the  firm, 

by  one  of  the  firm,  on  the  credit  of  the  and  whether  his  individual  check  given 

firm,   altiiough  the  money   is   misappro-  therefor  is  so  far  payment  thereof  as  to 

priated.     Onondaga  Bank  v.  De  Puy,  17  preclude  recourse   by  the  lender  to    the 

Wend.  (N.  Y.)  47;  Whitaker  v.   Brown,  firm,  are  questions  of  fact  depending  upon 

16  Id.  605;  Steel  v.  Jennings,  Cheves  (S.  the  intent,  understanding  and  agreement 

C.)  183 ;  Gregg  D.  Fisher,  3  Bradw.  (111.)  of   the    parties.      Smith   v.   Collins,    115 

261.     Even  though  the  money  is  appro-  Mass.  388. 

priated  to  the  use  of  one  partner.     So,  the  What  firms  may  borrow. — A  partner, 

partnership  is  liable  if  one  of  the  firm  unless  he  is  a  member  of  a  commercial 

190 


CHAP.  I.,  §  II.] 


DOCTRINES    OF    AGENCY. 


132* 


Overdrawing  banking  account. — Overdrawiug  a  banking  account  is 
borroieing  money,  {x) 


firm,  or  one  engaged  in  general  promiscu- 
ous trading,  has  no  implied  authority  to 
bind  his  firm  by  borrowing  money  and 
executing  promissory  notes,  mortgages,  or 
other  securities,  unless  the  money  is  neces- 
sary for  the  business,  and  such  pledge  of 
the  credit  of  the  firm  is  usual.  Davis  v. 
Kichardson,  45  Miss.  499.  But  in  Has- 
•kinson  i'.  Elliott  (62  Pa.  St.  393)  it  was  held 
that  the  rule  giving  implied  authority  to 
borrow  on  the  credit  of  the  firm,  within 
the  general  scope  of  its  authority,  and  ac- 
cording to  the  usual  course  of  its  busi- 
ness, applies  as  well  to  partnerships 
formed  for  mechanical  or  manufacturing 
purposes  as  to  commercial  partnerships, 
and  to  special  as  well  as  general  partner- 
ships. 

And  for  what  purposes. — Several  per- 
sons, as  partners,  were  engaged  in  various 
businesses,  and,  among  other  things,  took 
stock  in  a  woolen  mill.  One  of  the  part- 
ners, in  order  to  raise  money  to  carry  on 
the  mill,  signed  the  firm  name  to  a  note 
along  with  other  stockholders.  Held,  that 
the  raising  of  money  to  keep  the  woolen 
mill  running  was  within  the  scope  of  the 
partnership,  and  the  other  partners  were 
bound  thereby.  Morse  v.  Hagenah  (Wis.), 
32  N.  W.  Kep.  634.  So,  in  Leffier  v. 
Eice  (44  Ind.  103),  it  was  held  that  money 
may  properly  be  borrowed  by  a  partner  to 
purchase  middlings  and  grain  for  a  mill 
owned  by  the  firm. 

Agreeing  to  pay  usurious  interest. — 
The  liability  of  a  partner  for  the  acts  of 
his  copartner,  done  in  behalf  of  the  firm, 
cannot  be  held  to  extend  to  illegal  con- 
tracts ;  and,  therefore,  where  money  is 
borrowed  at  usurious  interest  by  one  mem- 


ber, without  the  knowledge  or  consent  of 
the  other,  the  latter  is  not  responsible  for 
the  money  borrowed.  Hutchins  v.  Tur- 
ner, 8  Humph.  (Tenn.)  415;  Hutchins  v. 
Hudson,  Id.  426.  But  a  partner  who 
knowingly  and  without  objection  allows 
the  financial  partner  to  continually  raise 
money  at  usurious  rates,  thereby  im- 
pliedly gives  him.  authority  to^bind  the 
firm  to  pay  usurious  interest,  from  which 
he  can  only  escape  by  pleading  usury. 
Hurd  V.  Haggerty,  24  111.  171. 

Rights  of  innocent  lender  without 
notice. — A  person  lending  money  to  one 
partner  upon  a  note  signed  by  him  in  the 
name  of  the  firm,  is  entitled  to  recover 
therefor  against  the  partnership,  if  at 
the  time  of  taking  the  note  he  did  not 
know  or  have  reason  to  know  that  the 
money  was  not  to  be  applied  to  the  use  of 
the  partnership ;  and  he  is  not  bound  to 
prove  that  the  money  actually  went  to  the 
use  of  the  firm  (Hay ward  v.  French,  12 
Gray  (Mass.)  453  ;  Blinn  v.  Evans,  24  111. 
317  ;  Sindh  v.  Crowley,  29  Kan.  756),  un- 
less the  circumstances  were  such  as  to  put 
him  upon  inquiry,  and  he  neglected  to  in- 
quire. Wagner  v.  Fresche,  56  N.  H.  495  ; 
Gregg  V.  Fisher,  3  Bradw.  (111.)  261 ;  On- 
ondaga Bank  i'.  De  Puy,  17  Wend.  (N.  Y.) 
47;  Whitaker  v.  Brown,  16  Id.  505; 
Steel  V.  Jennings,  Cheves  (S.  C.)  183; 
Church  V.  Sparrow,  5  Wend.  (N.  Y.)  223; 
Haldeman  v.  Bank  of  Middletown,  28  Pa. 
St.  440;  Potter  v.  Price,  3  Pittsb.  (Pa.) 
136. 

Accountability  between  partners  re- 
specting loans. — Where  partners  borrow 
money,  to  be  used  in  the  firm  business, 
it  becomes   a  partnership   fund,  and   no 


(x)  Bla-ckburn  Building  Soc.  v.  Cunlifi^e,    and  Re  Cefn  Cilcen  Mining  Co.,  7  Eq.  88, 
Brookes  &  Co.,  22  Ch.  D.  61,  and  9  App.    contra,  must  be  considered  as  overruled. 
Cas.  827  ;  Waterlow  v.  Sharp,  8  Eq.  501 ; 

191 


132^ 


IMPLIED    POWERS    OF    PARTNERS. 


[book  II., 


Increasing  capital, — Connected  with  the  subject  of  borrowing  money, 
is  that  of"  increasing  capital.  A  sole  trader  who  borrows  money  for 
the  purpose  of  his  trade  cannot,  with  propriety,  be  said  to  increase  his 
capital ;  but  if  two  or  more  persons  are  in  partnership,  and  each  bor- 


matter  liow  they  stand  on  the  security 
given  to  the  lender,  they  are  accountable 
to  one  another  as  partners.  Baily  v. 
Brownfield,  20  Pa.  St.  41. 

If  one  partner,  in  negotiating  a  loan  for 
the  firm,  deceives  his  copartner,  without 
the  privify  of  the  lender,  by  inserting  in 
the  security  a  private  debt  of  his  own, 
the  remedy  of  such  copartner  is  against 
the  fraudulent  partner  only.  Dowdall  v. 
Lenox,  2  Edw.  (N.  Y.)  267. 

When  a  loan  is  made  by  two  members 
of  a  firm,  in  a  matter  foreign  to  its  busi- 
ness, and  in  disregard  of  the  express 
opposition  of  the  third  member,  the  two 
members  making  the  loan  are  justly 
chargeable  with  its  amount.  Cooke  v. 
Allison,  30  La.  Ann.  963. 

Illustrations  of  the  foregoing  princi- 
ples.— Where  the  managing  partner  of  a 
concern,  who  had  been  in  the  habit  of 
borrowing  checks  for  the  purpose  of 
meeting  the  firm's  liabilities,  a  short 
time  before  the  firm  dissolved  called  at 
the  office  of  S.  and  requested  his  check, 
which  he  received,  at  his  request  made 
payable  "  to  currency,"  promising  to  re- 
turn the  amount  within  an  hour  or  so, 
until  he  collect  some  bills  of  the  firm, 
which  he  failed  to  do — Held,  that  the 
other  partner  was  liable  to  pay  it,  the 
check  having  been  borrowed  on  the 
credit  of  the  firm,  though  the  proceeds 
were  not  appropriated  to  the  business  of 
the  firm.     Stark  v.  Corey,  45  III.  431. 

At  the  request  of  one  partner,  plaintiff 
became  surety  on  a  note  signed  by  him 
in  the  firm  name,  without  the  actual 
knowledge  of  the  other  partner,  though 
the  money  was  needed  by  the  firm,  and 
was  used  by  it  in  its  business.  Held,  tliat 
having  paid  the  note,  plaintiff  could  re- 


cover therefor  from  the  firm.  Deitz  v. 
Regnier,  27  Kan.  94. 

B.,  who  was  a  partner  in  a  firm,  obtained 
from  R.  three  bonds  of  the  United  States, 
which  were  made  payable  to  bearer,  to 
be  used  by  the  firm  and  to  be  returned 
to  R.  upon  request.  B.  was  on  his  way  to 
San  Francisco  to  purchase  a  stock  of 
goods  for  the  firm  at  the  time  the  bonds 
were  delivered  to  him,  and  he  proposed 
pledging  them,  or  in  some  other  way  rais- 
ing money  upon  them,  and  to  use  the 
money  so  obtained  in  the  purchase  of 
goods.  B.  lost  his  life  before  reaching 
San  Francisco,  and  the  bonds  were  lost. 
Held,  that  the  firm  was  liable  to  R.  for  the 
amount  of  the  bonds.  Roney  v.  Buck- 
land,  4  Nev.  45. 

A  and  B,  in  1847,  were  partners  in  buy- 
ing wheat.  One  C  let  A  have  $300,  and 
a  few  days  afterwards  took  his  individual 
note  for  it.  The  money  was  used  to  pay 
for  grain  that  A  had  purchased.  In  the 
fall  of  1848  A  failed,  and  in  the  winter 
following  paid  part  of  the  note,  and  gave 
his  note  for  the  balance,  $198.  In  1849 
C  sold  the  note  last  named  to  D  for  $140, 
which  D  then  paid  him.  After  D  had 
kept  the  note  some  time,  C,  by  an  instru- 
ment in  writing,  assigned  to  D  all  his 
claim  against  A  and  B  for  moneys  loaned 
them  in  the  spring  of  1847.  The  consid- 
eration expressed  in  the  instrument  was 
$193.25,  but  no  new  consideration  was 
then  received.  Held,  that  C,  at  the  time 
of  the  sale  of  the  note  to  D,  had  a  valid 
claim  against  the  partners  A  and  B,  and 
that  this  claim  was  transferred  by  the  sale 
of  the  note;  or,  if  not,  that  it  passed  by  the 
subsequent  assignment.  Rose  v.  Baker,  13- 
Barb.  (N.  Y.)  230. 

Where    two    parties  are  jointly  inter- 


192 


CHAP.  I.,  §  II.]  DOCTEINES   OF   AGENCY.  132* 

rows  money  on  his  own  separate  credit,  and  the  money  is  then  thrown 
into  the  common  stock,  the  capital  of  the  firm,  as  distinguished  from 
the  separate  capitals  of  the  persons  composing  it,  may,  with  propriety, 
be  said  to  be  increased.  But,  in  this  case,  the  firm  is  not  the  borrower, 
nor  is  it  debtor  to  the  lender  for  the  money  borrowed.  If  a  firm 
borrows  money  so  as  to  be  itself  liable  for  it  to  the  lender,  the  capital 
of  the  firm  is  no  more  increased  than  is  the  capital  of  an  ordinary 
individual  increased  by  his  getting  into  debt.  When,  therefore, 
*it  is  said  that  one  partner  has  no  implied  power  to  borrow  on  j-^ 
the  credit  of  the  firm  for  the  purpose  of  increasing  its  capital, 
what  is  meant  is  that  one  partner,  as  such,  has  no  power  to  borrow, 
on.  the  credit  of  himself  and  copartners,  money,  which  each  was  to 
obtain  on  his  individual  credit,  and  then  to  bring  into  the  common 
stock,  (y)     Unless  the  expression  means  this,  it  means  notliing.  [z) 

Difference  between  borrowing  and  obtaining  goods,  &o.,  on  credit. — 
There  is  a  practical  difference  between  borrowing  money  and  procuring 
works  and  materials  on  credit,  which  requires  notice.  The  difference 
consists  in  this,  tliat  he  who  possesses  power  to  borrow  on  the  credit 
of  another  has  a  much  more  extensive,  and  therefore  more  easily 
abided,  trust  reposed  in  him  than  one  who  is  empowered  only  to 
pledge  the  credit  of  another  for  value  received,  when  the  pledge  is 
given.  A  power,  therefore,  to  incur  debt,  which  is  necessarily  inci- 
dental to  almost  every  partnership,  by  no  means  involves  a  power  to 
borrow  money,  and  the  cases  which  show  that  adventurers  in  cost-book 

ested  in  the  operation  of  baying  and  ship-  used  the  "gold  dust"  to  buy  goods  ;  that 

ping  oats,  one  party  may  bind  both  in  he  encouraged  C.  to  embark  it  as  capital, 

borrowing  oats  to  be  paid  in  oats,  in  their  and  had  advised  the   plaintiff  to   permit 

common  business  and  for  their  common  his  brother-in-law,  C,  to  put  it  in  the  firm 

benefit.     Adee  v.  Demorest,  54  Barb.  (N.  as  such,  but  there  was  no  evidence  that 

y.)  433.  J.  had   ever  assumed  any  responsibility 

C,  about  to  go  into  business  with  his  in  regard  to  it.     Held,  that  the  loan  was 

brother  J.,  put  in  "as  stock  for  the  pur-  a  personal  credit  to  C,  and  not  a  loan  to 

pose  of  forming  a  partnership  with  equal  the  firm;  hence,  J.  was  not  liable  as  sur- 

shares"  certain  "gold  dust"  sent  to  his  viving   partner.     Donnelly  v.   Ryan,    41 

wife  fuom  her   brother  R.,  for  which  C.  Pa.  St.  306. 

subsequently   gave   his  individual   note.  (y)  See  Greenslade  v.   Dower,  7  Barn. 

After  the  dissolution  of  the  partnership  &  C.  635;  Fisher  v.  Taylor,  2  Hare  218, 

and   the   death    of  C,    R.   brought    suit  as  to  the  power  of  one  partner  to  do  this, 

against  J.,  as  surviving  partner,  for  the  (z)  See  Bryon  v.  Metropolitan  Saloon 

loan  to  C,  claiming  it  to  be  a  firm  debt.  Omnibus  Co.,  3  De  G.  &  J.  123. 
On  the  trial  it  was  proved   that  J.  had 

193  13 


133* 


IMPLIED    POWERS   OF    PARTNERS. 


[book   II., 


mines  are  liable  for  supplies  furnished  to  the  mine,  (a)  but  not  for 
money  borrowed  for  the  purposes  of  the  mine,  [b)  show  that  the  dif- 
ference here  alluded  to  is  judicially  recognized. 

The  effect  of  having  had  the  benefit  of  money  improperly  borrowed 
will  be  noticed  hereafter.     See  infra,  section  6. 

See  further,  as  to  borrowing  money,  infra,  '^Mortgages  and  Pledges.'" 

9.   Cheques. — One  partner  has  implied  power  to  bind  the  firm  by 

cheques,  not  post  dated,  (c)  drawn  on  the  bankers  of  the  firm  in  the 

partnership  name ;  {d)  and  if  one  partner  directs  the  bankers  of  the 

firm  not  to  pay  a  cheque  of  the  firm,  the  *bankers  incur  no 


134] 


liability  to  the  firm  if  they  follow  such  directions,  (e)  13 


(a)  Tredwen  v.  Bourne,  6  Mees.  &  W.  Where  a  bank  pays  out  the  money  of  a 

461 ;  Hawken  v.  Bourne,  8  Id.  703.  firm  to  one    partner  upon   his  check,  in 

{b)  Hawtayne  v.  Bourne,  7  Mees.  &  VV.  fraud  of  the  rights  of  the  other,  an  action 

595 ;    Burmester   v.    Norris,    6   Ex.  796  ;  at  law  cannot  be  maintained  in  the  firm 

Kicketts  v.  Bennett,  4  C.  B.  686  ;  Brown  v.  name  against  the  bank,  but  resort  must 

Byers,   16  Mees.  &  W.  252.      See,   also,  be  had  to  a  court  of  equity  for  the  relief 

Beldon  v.  Campbell,  6  Ex.  886.  of  the   partner   claiming    to  be   injured. 

(c)  See  Forster  v.  Mackreth,  L  R.,  2  Church  v.  First  National  Bank,  87  111.  68. 
Ex.  163;  Bull  v.  O'Sullivan,  L.  R.,  6  Q.  See,  also.  Miller  v.  Price,  20  Wis.  117,  as 

•  B.  209.  to  tlie  necessary  parties  to  such  an  action. 

(d)  Laws  V.  Rand,  3  C.  B.  (X.  S.)  442  ;  An  overdraft  by  a  partner  may  bind  the 
Backhouse  v.  Cliarlton,  8  Ch.  D.  444.  As  firm,  alihough  he  misapplies  the  proceeds, 
to  cheques  drawn  by  directors,  see  Re  in  the  absence  of  any  facts  which  should 
Gloucester,  Aberystwith,  &c.,  Rail.  Co.,  18  have  charged  the  drawee  with  notice, 
Jur.  815,  L.  J.  where  the  power  existed  to  overdraw  for 

(e)  Before  the  Jud.  Acts,  an  action  for  the  firm.  Darlington  v.  Garrett,  14  111. 
dishonoring  the  cheque  must  have  been  App.  238. 

brought  in  the  names  of  all  the  partners.  Where  a  person  who  is  a  member  of 
and,  in  the  case  supposed,  such  an  action  two  firms  gives  the  check  of  one  firm  to 
could  not  have  been  sustained.  See  infra,  pay  the  note  of  the  other,  wliich  had  been 
book  II.,  ch.  3.  It  is  conceived  tliat  the  deposited  with  a  banker  for  collection,  a 
statement  in  the  text  is  correct,  notwith-  mutual  understanding  between  the  firms 
standing  the  modern  rules  as  to  parties.  may  well  be  presumed,  and  the  person 
13.  Checks. — Where  one  partner  con-  receiving  the  proceeds  of  the  note  is  not 
sents  to  the  application  of  a  check  of  the  liable  in  an  action  by  the  former  firm  to 
firm  to  an  individual  debt  of  his  copart-  restore  them.  Nor  is  the  notorious  in- 
ner, he  may  withdraw  such  consent  at  any  solvency  of  the  member  who  drew  the 
time  before  such  application  is  in  fact  note  and  the  check  constructive  notice  of 
made,  or  the  rights  of  third  parties  inter-  his  want  of  authority.  Murphy  v.  Cam- 
vene,  and  after  notice  by  him  not  to  so  den,  18  Mo.  122. 

apply  the  check,  it  cannot  be  so  applied.  Where  there  are  two  establishments  in 

National  Bank  of  Jacksonville  v.  Mapes,  the  same  place  for  carrying  on  the  same 

85  111.  67.  business,  both  conducted  by  the  same  per- 

194 


€HAP.  I.,  §  II.]  DOCTRINES   OF   AGENCY.  134* 

10.  Contracts. — One  partner  can  bind  his  copartners  by  varying  a 
a  contract  made  with  both  in  the  ordinary  course  of  business.  (/) 

11.  Debts.  Payment  to  one  partner. — If  a  debt  is  owing  to  a  firm, 
payment  by  the  debtor  to  any  one  partner  extinguishes  the  claim  of 
all,  each  partner  being  ostensibly  the  agent  of  all  the  rest  to  get  in 
debts  owing  to  the  firm,  {g)  After  a  dissolution,  payment  to  any  one 
of  the  partners  discharges  the  debtor,  [h)  even  though  a  third  person 
is  appointed  to  collect  the  debts  owing  to  the  firm,  and  the  creditor  is 
aware  of  that  fact,  (i)  But  if  on  a  dissolution  a  debt  due  to  the  part- 
nership is  assigned  to  one  of  the  partners,  and  the  debtor  has  notice 
of  the  assignment,  he  can  only  pay  the  assignee,  {k)  If  there  are  two 
firms  with  one  common  partner,  and  a  bill  of  exchange  is  given  to  one 
firm,  and  is  endorsed  by  it  to  the  other,  payment  to  the  first  firm  is  an 
answer  to  an  action  brought  on  the  bill  by  the  second.  [I)  14 

son,  in  one  of  which  he  is  a  partner,  and  v.  Phillips,  3  Hare  281,  as  to  the  receipts 

in  the  other  sole  proprietor,  and   he  ob-  of  a  surviving  partner. 

tains   moneys   from    a    bank    on    checks        (i)  Bristow  v.  Taylor,  2  Stark.  60 ;  Por- 

drawn   by  him  and  signed  with   his  own  ter  v.  Taylor,  6  Mau.  &  S.  156 ;  King  v. 

name  as  agent,  in  an  action   by  the  bank  Smith,  4  Car.  &  P.  108. 

against  the  firm  they  may  show  that  they        (k)  See  Duff  t;.  East  India  Co.,  15  Ves. 

are  not  indebted  to  the  bank,  if  they  did  213. 

not  know  the  mode  in  which  the  checks        [l)  See  Jacaud  v.  French,  12  East  317. 

were   drawn.      Mechanics',  &c..  Bank  v.        14.  Debts :  payment  to  one  partner. — 

Dakin,  24  Wend.  (N.  Y.)  411.  Payment  of  a  debt  to  one  partner  of  a  firm 

G.,  a  member  of  a  firm,  made  a  check  is  good  against  the  other  partners,  and  a 

in  the  firm  name,  payable  to  H.  or  hearer,  release  by  one  partner  to  a  debtor  of  the 

for  the  purpose  of  paying  an  account  due  firm  is  obligatory  on  the  others.     Yandes 

from  the  firm  to  H. ;  but,  instead  of  using  v.  Lefavour,  2  Blackf.  (Ind.)  371  ;  White 

the  check  for  that  purpose,  paid  H.'s  ac-  v.  Jones,  14  La.  Ann.  681 ;  Vanderburgh 

count  by  an  account  which  he  held  indi-  v.   Bassett,  4    Minn.   242;    Allen   v.  Far- 

vidually  against  H.,  and  by  payment  of  rington,    2    Sneed     (Tenn.)    526;     Scott 

the   balance   in   cash,    and    subsequently  v.  Trent,   1   Wash.  (Va.)   77;   Salmon  v. 

transferred  the  check  to  the  plaintiff,  to  Davis,    4    Binn.    (Pa.)    375;    Gregg    v. 

pay  an  individual  debt.     Held,  that  as  it  James,    Breese    (111.)    167.     A    payment 

appeared   that   the  check    was  drawn  in  to  one  partner  is   payment   to  both,  un- 

good  faith  to  pay  a  partnership  debt,  an  less  strictly  forbidden.     Gregg  v.  James, 

action  would  lie  upon  it  against  the  firm,  supra;  Scott  v.  Trent,  supra;  Salmon  v. 

Gale  V.  Miller,  44  Barb.  (N.  Y.)  420.  Davis,  supra. 

(/)  Leiden  v.  Lawrence,  2  N.  R.  283,        Presumptively,   whatever   one   partner 

^^-  does  in  the  collection  of  a  firm  debt   is 

{g)  Anon.,  12  Mod.  446.  done    with    the    consent   of    the    others. 

{h)  Dufi"D.  East  India  Co.,  15  Ves.  198;  Rolfe  v.  Dudley,  58  Mich.  208.     Thus, 

Brasier  v.  Hudson,  9  Sim.  1.    See  Phillips  where  a  written  contract  is  entered  into 

195 


134* 


IMPLIED   POWERS   OF    PARTNERS. 


[book   II.,. 


Payment  to  one  partner  of  debt  not  due  to  firm. — Moreover,  when  it 
is  said  that  payment  to  one  partner  is  payment  to  all,  it  is  supposed 
that  the  payment  is  made  in  discharge  of  a  debt  due  to  the  firm.  If 
it  is  due,  not  to  the  firm,  but  to  one  of  the  partners,  the  rule  does  not 
hold.  Therefore,  if  an  owner  of  goods  sells  them,  the  purchase  money 
must  be  paid  to  him  or  his  agent,  and  payment  to  a  person  interested 
with  him  in  the  profits  accruing  from  the  sale  will  not  do  ;  for  though 
the  two  may  be  liable  as  if  they  were  partners  by  reason  of  their  com- 
munity of  interest  in  the  profits,  it  does  not  there*fore  follow 


that  he  who  is  to  share  the  profits  is  entitled  to  receive  the 


[*135 


by  an  individual  to  do  certain  work,  in  a 
suit  by  him  to  recover  the  price  of  the 
work,  the  defendant  may  show  that  the 
plaintiff  had  a  partner  in  the  job,  and 
that  the  partner  had  been  paid  in  full. 
Shepard  v.  Ward,  8  Wend.  (N.  Y.)  542. 
The  facts  of  the  insolvency  of  the  partner 
receiving  the  money,  or  his  misapplica- 
tion of  it,  do  not  affect  his  right  to  receive 
it.  Major  v.  Hawkes,  12  111.  298  ;  Heartt 
V.  Walsh,  75  111.  200. 

Debts  due  to  a  firm  may  be  assigned  to 
either  of  the  partners,  and  a  note  given  to 
the  assignee  for  the  amount  due  by  a 
debtor  to  the  firm  extinguishes  the  debt 
to  the  partnership.     Lamkin  v.  Phillips, 

9  Port.  (Ala.)  98. 

But  a  debt  due  to  a  firm  cannot  be  dis- 
charged by  one  of  the  partners  applying 
it  in  payment  of  an  individual  debt  ow- 
ing by  him  to  the  debtor  of  the  firm,  un- 
less done  with  the  knowledge  and  iippro- 
bation  of  the  other  partners.  Evering- 
ham  V.  Ensworth,  7  Wend.  (N.  Y.)  326  ; 
McJS^air  v.  Piatt,  46  111.  211  ;  Pierce  v. 
Pass,  1  Port.  (Ala.)  232 ;  Pierce  v.  Hick- 
enburg,  2  Id.  198;  Norment  v.  Johnson, 

10  Ired.  (N.  C.)  L.  89;  Jones'  Case,  1 
Overt.  (Tenn.)  455. 

In  South  Carolina,  although  one  part- 
ner may  discharge  a  debt  due  to  the  firm 
by  a  third  person,  by  discounting  it  against 
a  debt  due  by  him  individually  to  such 
person,  yet  his  agreement  to  discount  will 


not  charge  the  firm  with  the  balance  of 
his  private  debt  remaining  due  after  such 
discount,  nor  enable  his  individual  cred- 
itor to  discount  that  balance  against 
another  debt  due  by  him  to  the  firm. 
Beckham  v.  Peay,  2  Bailey  (S.  C.)  133. 

An  agreement  between  partners,  on  dis- 
solution, that  one  shall  have  the  settle- 
ment of  their  affairs,  he  assuming  all  the 
debts  of  the  firm  and  agreeing  to  pay  to 
the  outgoing  partner  all  the  money  con- 
tributed by  him,  except  what  he  had 
before  drawn  out,  operates  as  an  assign- 
ment of  the  debts  due  the  firm  to  the  re- 
maining partner ;  and  a  subsequent  re- 
lease of  a  debt  due  the  firm  by  the  out- 
going partner  to  a  debtor  having  notice 
of  the  agreement,  is  void.  Cram  v.  Cad- 
well,  5  Cow.  (N.  Y.)  489.  See,  also,  Lunt 
V.  Stevens,  24  Me.  534. 

A  and  B  were  partners,  and  on  a  disso- 
lution of  the  firm  transferred  lo  C  all  the 
partnership  effects  for  the  purpose  of  pay- 
ing and  collecting  the  debts  of  the  firm. 
C  afterwards  transferred  the  partnership 
property  to  B.  D,  a  debtor  of  the  firm, 
after  notice  of  the  transfer  to  G,  paid  hia 
debt  to  A.  B  sued  D  for  the  debt.  Held, 
that  as  C  was  not  vested  with  the  title  of 
the  partnership  effects  as  assignee,  pay- 
ment to  A,  as  one  of  the  firm,  was  a  good 
discharge  of  the  debt.  Gordon  v.  Free- 
man, 11  111.  14. 


196 


CHAP.  I.,  §  II.] 


DOCTRINES    OF    AGENCY. 


135^ 


proceeds  of  the  sale  of  the  goods  themselves,  which  belong  exclusively 
to  the  other,  (m)  So,  where  a  court  orders  payment  to  be  made  to  one 
partner  by  name,  the  order  must  be  strictly  obeyed,  and  payment  to 
the  partner  of  the  person  named  in  the  order  will  not  suffice,  though 
both  are  defendants  in  the  action  in  which  the  order  is  made,  {n)  15 

Receipts  given  by  one  partner. — As  one  partner  can  accept  payment 
of  a  debt  due  to  the  firm,  so  he  can  effectually  release  (o)  and  give  a 
valid  receipt  for  such  deht.{p)  It  is,  however,  to  be  remembered  that 
although  one  partner  has  implied  authority  to  get  in  debts  owing  to 
the  firm  and  to  give  discharges  for  them,  still  a  receipt  is  not  con- 
clusive evidence  of  payment ;  so  that  if  one  partner  gives  a  receipt  in 
fraud  of  his  copartners,  it  will  not  preclude  the  firm  from  recovering 
the  money,  [q)  Nor  will  a  release  given  by  one  partner  bind  the  firm 
if  the  releasing  partner  acts  in  fraud  of  his  copartners  and  in  collusion 
with  the  debtor,  (r)  16 


(m)  See  Smith  v.  Watson,  2  Barn.  &  C. 
401. 

{n)  See  Showier  v.  Stoakes,  2  Dowl.  & 
L.  3.  As  to  payments  by  tlie  paymaster- 
general  to  one  of  several  partners,  see 
Supreme  Court  Fund  Kules,  1886,  r.  63. 

15.  If  one  partner  receives  from  a  third 
person  payment  of  a  debt  owing  by  him 
to  the  firm,  which  has  been  allotted  to  his 
copartner,  the  latter  may  maintain  an 
action  against  him  to  recover  the  amount 
so  received.  Crosby  v.  Nichols,  3  Bosw. 
(N.  Y.)  450. 

(o)  See  Hawkshaw  v.  Parkins,  2  Swanst. 
639,  and  post,  "  Release." 

(p)  Henderson  v.  Wild,  2  Camp.  561. 

{q)  Farrar  v.  Hutchinson,  9  Ad.  &  E. 
•641 ;  Henderson  v.  Wild,  2  Camp.  561. 

(r)  Aspinall  v.  The  London  &  N.  W. 
Rail.  Co.,  11  Hare  325,  and  see po-U,,  "Re- 
lease." 

16.  Receipts  given  by  one  partner. 
— A  receipt  being  signed  by  a  firm,  and 
the  question  being  whether  the  members 
were  bound,  or  only  the  one  signing  it,  in 
the  absence  of  all  explanatory  evidence, 
the  court  should  give  it  the  construction 
which  will  operate  most  strongly  against 


those  purporting  to  be  bound  by  it.  Hogan 
V.  Reynolds,  8  Ala.  59. 

Where,  however,  a  member  of  a  com- 
mercial firm  receives  from  a  firm  debtor  a 
note  of  a  stranger,  which  he  receipts  for 
in  the  firm  name,  and  agrees  in  the  receipt 
to  collect,  and  after  paying  the  debt  to  re- 
turn the  proceeds  to  the  debtor,  this  does 
not  bind  his  partners  who  have  no  notice 
of  the  transaction.  Pickels  v.  McPherson, 
59  Miss.  216. 

Instances. — After  the  dissolution  of  a 
firm  which  had  endorsed  a  note,  the  maker 
paid  a  sum  of  money  to  one  of  the  late 
partners,  and  took  a  receipt  signed  with 
the  firm  name,  by  which  it  was  agreed 
that  the  money  should  be  applied  to  the 
payment  of  the  note.  Held,  that  another 
partner  was  not  liable  on  this  receipt  for 
the  misapplication  of  the  money,  the 
maker  of  the  note  not  being  a  dealer  with 
the  firm,  and  being  bound  to  take  notice 
of  its  dissolution.  Sanders  v.  Ward,  23 
Ark.  241. 

A  power  of  attorney  for  the  sale  of  land 
was  transmitted  through  the  hands  of  a 
partner  to  the  attorney.  The  attorney 
sold  the  land,  and  afterwards,  in  the  set- 


197 


135*  IMPLIED    POWERS    OF    PARTNERS.  [BOOK    11.^ 

Assent  to  creditors^  deed. — If  one  of  sev^eral  partners  assent  to  a 
deed  executed  by  a  debtor  of  the  firm  in  favor  of  his  creditors,  the 
firm  is  bound  by  the  deed,  (s)  and  the  doctrine  that  one  partner  has 
no  implied  authority  to  bind  his  copartners  by  an  instrument  under 
seal  has  no  application  to  such  a  case,  {t) 

Assent  to  transfer  of  debt. — One  partner  can  bind  the  firm  by  assent- 
ing to  a  transfer  of  debt  due  to  it,  as,  for  example,  to  a  transfer  of 
the  firm's  account  from  their  banker  to  his  successor  in  business,  (ii) 
So,  where  a  creditor  of  the  firm  assigns  the  debt  due  to  him,  and 
*one  of  the  partners  recognizes  the  transfer  and  promises  to 
-^  pay  the  transferee,  the  firm  is  bound  by  this  promise,  (x)  17 

Taking  bill  in  payment. — Again,  one  partner  may  receive  a  bill  in 
payment  of  a  debt  due  to  the  firm,  and  so  preclude  the  firm  from 
suing  for  the  debt  so  long  as  the  bill  is  running,  (y) 

Payment  to  an  agent  of  a  firm  of  a  bill  drawn  in  his  own  name 
and  payable  to  his  own  order  in  respect  of  a  debt  due  to  the  firm,  is 
not  payment  to  the  firm  unless  he  has  authority  to  draw  in  that  way,, 
or  the  firm  gets  the  money,  (z) 

Settling  debts. — Although  each  partner  has  power  to  receive  pay- 
ment of  a  partnership  debt,  and  to  give  a  discharge  for  it  on  payment,. 

tlement  of  his  accounts  with  the  partner-  Tlius,  one  member  of  a  firm  may  order 

ship,  accounted  for   the  money  received  the  contents  of  a  note  made  payable   to 

for  the  land  with  the  partner  from  whom  the  firm  or  order,  to  be  paid  to  himself^ 

he  had  received  the  papers,  and  took  from  and  maintain  a  suit  in   his  own  name, 

him  a  receipt,  signed  as  if  for  the  partner-  Burnham  v.  Whittier,  5  N.  H.  334. 

ship,  which  had   been  dissolved.     Held,  In  Kull  v.  Thompson  (38  Mich.  685), 

that  the  partnership  was  not  liable  for  the  where   an    assignment   of    a   partnership 

money.    Hiitchins  w.  Gilman,  9  N.  H.  359.  claim  was  made  by  an  agent  of  the  firm 

(s)  See   Morans  v.  Armstrong,  Arms.,  with  the  consent  of  one  of  the  partners,  to 

M.  &  O.,  Ir.  N.  P.  Rep.  25 ;  Dudgeon  v.  apply  on  a  demand  against  the  agent  and 

O'Connell,  12  Ir.  Eq.  566.  the   consenting   partner — Held,  that    the 

(<)  Dudgeon  i'.  O'Connell,  12  Ir.  Eq.  566.  objection  that  the  assignment  was  invalid 

(u)  Beale  v.  Caddick,  2    Hurlst.  &  N.  for  want  of  assent  of  all  the  partners,  only 

326.     See,  also.  Backhouse  V.  Charlton,  8  went  to  the  suiBciency  of  the  consideration 

Oh.  Div.  444.  as   between    the  partnership  and  the  as- 

(x)  Lacy  v.  McNeile,  4  Dowl.  &  R.  7.  signees,  and  could  only  be  raised  by  the 

17.  Assent     to    transfer    of    debt. —  partners  themselves. 

Ordinarily,  one  partner  has  power,  with-  (y)  See  Tomlins  v.  Lawrence,  3  Moo.  & 

out  the  assent  of  the  others,  to  transfer  or  P.  555. 

assign  a  chose  in  action  of  the  partnership.  (2)  See  Hogarth  v.  Wherley,  L.  R.,  10 

Clarke    v.   Hogeman,    13    W.   Va.    718.  C.  P.  630. 

198 


DOCTRINES    OF    AGENCY. 


136' 


CHAP.  I.,  §  II.] 

it  does  not  follow  that  he  has  power  to  compromise  or  settle  the  debt 
in  any  way  he  likes  without  payment.  As  a  general  proposition,  an 
authority  to  receive  payment  of  a  debt  does  not  include  an  authority 
to  settle  it  in  some  other  way ;  (a)  and  a  partner  has  no  implied  au- 
thority to  discharge  a  separate  debt  of  his  own  by  agreeing  that  it 
shall  be  set  against  a  debt  due  to  his  firm.  (6)  18 


(a)  See  the  last  note,  and  Pearson  v. 
Scott,  9  Ch.  D.  198 ;  Young  v.  White,  7 
Beav.  506 ;  Underwood  v.  Nicholls,  17  C. 
B.  239  ;  Story  on  Agency,  g  98. 

(6)  Piercy  v.  Fynney,  12  Eq.  69.  See, 
also,  Kendal  v.  Wood,  L.  R.,  6  Ex.  243. 
Compare  Wallace  v.  Kelsall,  7  Mees.  & 
W.  264. 

18.  Settling  debts. — A  partner  has 
power  to  compromise  and  discharge  a 
claim  of  the  partnership  against  a  third 
party.  Noyes  v.  New  Haven,  &c.,  R.  R. 
Co.,  30  Conn.  1 ;  Doremus  v.  McCormick, 
7  Gill  (Md.)  49.  But  where  money  is 
due,  a  partner  cannot  compromise  by  re- 
ceiving land  from  a  debtor  instead  of 
money.     Russell  v.  Green,  10  Conn.  269. 

Applying  firm  claim  to  liquidation 
of  individual  indebtedness. — It  is  a  well- 
settled  principle  of  the  law  of  partnership 
that  one  member  of  a  firm  cannot  apply  a 
debt  due  from  his  creditor  to  the  firm  of 
which  he  is  a  member,  to  cancel  his  pri- 
vate debt  without  the  assent  or  ratification 
of  the  other  partners.  Pierce  v.  Pass,  1 
Port.  (Ala.)  232  ;  Pierce  v.  Hickenburg,  2 
Id.  198;  Norment  v.  Johnson,  10  Ired. 
(N.  C.)  L.  89;  Jones'  Case,  1  Overt. 
(Tenn.)  455  ;  McNair  v.  Piatt,  46  111.  211 ; 
Sims  V.  Smith,  12  Rich.  (S.  C.)  685;  Har- 
per V.  Wrigley,  48  Ga.  570;  Thomas  v. 
Pennich,  28  Ohio  St.  55 ;  Everingham  v. 
Ensworth,  7  Wend.  (N.  Y.)  326.  See, 
however,  Beckham  v.  Perry,  2  Bailey  (S. 
C.)  133;  and  such  assent  will  not,  ordin- 
arily, be  inferred  from  mere  knowledge 
of  the  transaction.  Todd  v.  Lorah,  75 
Pa.  St.  155. 

Thus,  a  surety  for  a  firm,  who  is  also 


surety  for  one  of  its  members  individually, 
receiving  funds  belonging  to  the  firm,  has 
no  right  to  apply  them  to  the  payment 
of  the  individual  debt,  without  the  con- 
sent of  the  other  partner ;  if  he  does  so, 
and  afterwards  pays  the  firm  debt  with 
his  own  money,  he  will  be  held  as  having 
paid  it  with  the  partnership  funds. 
Downing  v.  Linville,  3  Bush  (Ky.)  472. 

A  credit  given  to  one  partner  on  his 
own  separate  account  is  not  a  discharge, 
pro  tanto,  of  a  demand  against  tlie  part- 
nership, unless  it  were  intended  or  ac- 
cepted as  such ;  and  if  a  creditor  receive 
the  effects  of  one  of  the  partners,  which 
he  may  apply  to  the  payment  of  his  de- 
mand against  the  partnership,  yet,  if  he 
relinquish,  and  restore  the  property,  he 
may  still  hold  all  the  partners.  Barker 
V.  Blake,  11  Mass.  16. 

However,  in  Homer  v.  Wood  (11  Cush. 
(Mass.)  62),  it  was  held  that  if  one  mem- 
ber of  a  partnership  settles  a  demand  due 
from  him  individually,  by  setting  off  and 
discharging  a  demand  due  from  his 
creditor  to  the  partnership,  although  this 
is  a  fraud  upon  the  partnership,  no  action 
at  law  can  be  maintained  in  the  name  of 
the  partnership  to  recover  the  demand 
due  it  from  such  creditor,  the  latter  hav- 
ing acted  in  good  faith.  See,  also,  Halls 
V.  Coe,  4  McGord  (S.  C.)  136. 

Effect  of  assent  or  knowledge  of 
other  partner.— Where  an  indebtedness 
from  an  individual  partner  to  a  third 
person  is  canceled  by  passing  a  like  sum 
to  the  credit  of  such  third  person  in  the 
books  of  the  firm,  he  may  recover  the 
amount  in  an  action  of  assumpsit  against 


199 


136*  IMPLIED    POWERS    OF    PARTNERS.  [bOOK    II., 

Promise  by  one  partner  to  ])ay  a  debt  of  the  firm. — A  promise  by 
one  partner  to  pay  a  debt  owing  by  the  firm,  undoubtedly  binds  the 

the  firm,  if  the  transaction  was  had  with  that  one  partner  couiil  not  show  that  the 
the  knowledge  or  ratification  of  the  other  other  had  received  his  own  notes  in  pay- 
partners.     Corbin  v.  McChesney,  26  111.  ment.     Cook  v.  Bloodgood,  7  Ala.  683. 
231 ;  Bates  v.  Halliday,  3  Ind.  159.  Where  it  appeared  that  one  partner  re- 

Where  B  is  indebted  to  A,  and  A  is  ceived  of  the  plaintiff  certain  promissory 
indebted  to  a  firm  of  which  B  is  a  co-  notes  to  collect,  for  which  he  gave  a  re- 
partner,  and  it  is  agreed  between  A  and  ceipt  in  his  own  name,  and  the  plaintiff, 
B  that  the  one  demand  shall  be  set  off  or  to  evince  the  liability  of  the  partners,  by 
extinguished  by  the  oilier,  such  an  agree-  showing  that  the  transaction  had  rtlaiion 
ment  is  binding  upon  a  subsequent  as-  to  the  partnership  business,  offered  to 
signee  of  A's  demand  against  B,  if  the  prove  that  such  notes  were  delivered  to 
assent  thereto,  express,  implied,  or  to  be  the  partner  while  he  was  attending  to 
inferred,  of  the  other  members  of  the  other  concerns  of  the  partnership,  to  be 
firm,  can  be  shown.  Wilson  v.  Dargan,  collected  and  applied  in  satisfaction  of  a 
4  Eich.  (S.  C.)  544.  Partners  in  trade  note  due  from  the  plaintiff  to  the  part- 
who  have  taken  a  note  for  goods  sold,  nership,  and  that  that  partner  did  accord- 
may  make  an  agreement  while  still  hold-  ingly  collect  one  of  such  notes,  and  en- 
ing  the  note,  that  it  shall  be  satisfied  by  dorse  the  avails  on  the  plaintiff's  note  to 
work  done  by  the  maker  for  one  of  the  the  partnership,  it  was  held  that  such  evi- 
partners  individually.  If  one  of  the  dence  was  admissible.  Brown  v.  Law- 
partners  makes  this   agreement,  and  the  rence,  5  Conn.  397. 

other  assents,  and  the  customer  does  work  One  of  the  partners  being  indebted  to 
enough  to  cover  the  note,  it  is  immediately  the  plaintiff,  it  was  agreed  that  he  might 
thereby  discharged.  Camp  v.  Page,  42  take  goods  out  of  the  store  in  payment  of 
Vt.  739.  Partners  proved  to  have  known,  the  debt,  and  that  the  same  should  be 
or  to  have  had  good  reason  to  know,  that  charged  to  the  individual  partner.  Upon 
a  creditor  has  relied  upon  an  agreement  dissolution,  the  partner  originally  in- 
of  one  of  the  firm  to  allow  his  individual  debted  transferred  his  interest  to  his  co- 
debt  to  be  applied  as  a  credit  on  the  in-  partner,  who  afterwards  assigned  for  the 
debtedness  of  the  creditor  to  the  firm,  benefit  of  creditors.  Held,  that  the 
will  not  be  permitted  to  repudiate  it,  assignee  was  not  entitled  to  recover  for 
unless  they  show  that  they  had  given  goods  sold  before  the  assignment,  but  that 
notice,  at  the  earliest  practicable  period  for  those  sold  afterwards  he  could  re- 
after  it  had  come  to  their  knowledge,  cover,  unless  it  was  shown  that  they  were 
that  they  would  not  sanction  the  ar-  sold  by  him  in  pursuance  of  the  original 
rangement.     Casey  v.  Carver,  42  111.  225.  agreement.     Woodward  v.  Horst,  10  Iowa 

Various  illustrations  of  the  forego-  120. 

ing  principles. — Where  one  of  two  attor-  After  the  dissolution  of  a  partnership, 

neys,  who  were  partners,  received  his  own  A,  one  of  the  partners,  bought  a  horse  of 

notes  in  part  payment  of  a  demand  left  B,  and  gave  his  note  for  the  price,  agree- 

for  collection,  and  gave  the  receipt  of  the  ing  that  if  any  thing  should  be  due  from 

firm  to  the  debtor  for  the  claim,  and  a  B  to  the  firm,  A's  note  should  be  applied 

suit  was  brought  against  the  attorneys  for  as  a  credit  on  the  copartnership  debt.     It 

the  amount  of  the  demand,  it  was  held  appeared  that  the  partnership  claims  on 

200 


CHAP.  I. 


II.] 


DOCTRINES   OF   AGENCY. 


136^ 


firm,  (c)  How  far  a  promise  by  one  partner  will  prevent  the  statute 
of  limitations  from  running  in  favor  of  the  others  will  be  seen  here- 
after, (d)  19 


B  had  been  deposited  with  C,  another 
partner,  for  collection  after  the  dissolu- 
tion, but  prior  to  the  sale  of  the  horse ; 
but  there  being  no  proof  that  B  had  no- 
tice of  this  trust,  or  even  of  the  dissolu- 
tion, it  was  held  that  A's  contract  with  B 
was  binding.  Combs  v.  Boswell,  1  Dana 
(Ky.)  473. 

The  defendant's  agent  sold  and  deliv- 
ered to  one  of  the  partners  of  a  grocery- 
firm,  to  which  the  defendant  was  indebted 
for  groceries,  certain  cattle  belonging  to 
the  defendant,  agreeing  to  receive  the 
price  thereof  in  groceries  at  the  store  of 
the  firm,  and  that  the  amount  already  due 
should  be  included  as  part  payment  of 
such  price.  Held,  that  such  agreement 
was  not  binding  upon  the  firm,  without 
affirmative  proof  of  their  knowledge  and 
consent  thereto,  and  that  in  the  absence 
of  such  proof  their  assignee  in  insolvency 
might  recover  against  the  defendant  the 
whole  amount  of  his  account.  Cadwalla- 
der  V.  Kroesen,  22  Md.  200. 

Attorneys  who  were  partners,  rendered 
services  for  a  client,  and  afterwards  an 
agreement  was  made  between  one  of  the 
partners  and  such  client  that  the  services 
so  rendered,  and  services  thereafter  to  be 
rendered,  should  be  applied  in  payment 
of  a  debt  due  from  such  partner  alone  to 
the  client,  which  agreement  was  not 
known  to  the  other  partner.  Held,  after 
the  death  of  the  partner  making  the 
agreement,  that  the  surviving  partner 
could  not  recover  for  services  rendered 
by  the  firm  after  such  agreement ;  but,  as 
the  agreement  was  executory  and  without 
consideration  as  to  the  services  previous- 
ly rendered,  he  could  recover  for  them. 
Strong  V.  Fish,  13  Vt.  277. 

Where  one  of  two  partners  was  individ- 
ually indebted,  and  his  creditor  charged 


the  debt  to  the  firm,  and  informed  both 
partners  that  he  had  done  so,  and  subse- 
quently the  indebted  partner  delivered  to 
the  creditor  property  of  the  firm  in  pay- 
ment of  the  debt,  and  this  was  known  to 
the  other  partner,  who  also  knew  that  the 
creditor  supposed  that  he  was  receiving 
the  property  in  payment  of  the  debt,  it 
was  held,  in  an  action  on  book  account, 
brought  by  the  firm  against  the  creditor, 
and  in  which  they  claimed  to  recover  for 
the  property  so  delivered,  that  the  cred- 
itor was  entitled  to  be  allowed  for  the 
charge  thus  made  by  him  against  the 
firm.     Miller  v.  Dow,  17  Vt.  235. 

A  was  a  member  of  the  firms  A  &  B 
and  A  &  C,  and  was  managing  partner 
in  both  concerns.  Both  firms  had  deal- 
ings with  the  firm  of  D  &  E.  The  firm 
of  A  &  B  was  dissolved  by  the  death  of 
B,  and  was,  at  the  time,  largely  indebted 
to  A  &  C,  who  were  also  indebted  to  D 
&  E.  A,  after  B's  death,  having  done 
the  same  thing  before,  transferred  the  in- 
debtedness of  A  &  C  to  the  firm  D  & 
E,  from  the  account  between  them  to  the 
account  between  D  &  E  and  A  &  B, 
and  credited  the  same  amount  to  the  last- 
named   firm,  on  the   account   between  A 

6  B  and  A  &  C.  Held,  that  A  had, 
under  the  circumstances  of  the  case, 
authority  to  do  this.     Peyton  v.  Stratton, 

7  Gratt.  (Va.)  380. 

(c)  Anon.  v.  Layfield,  Holt  434  ;  Lacy 
V.  McNeile,  4  Dowl.  &  R.  7. 

{d)  A  promise  to  one  enures  for  the 
benefit  of  all.  White  v.  Williams,  Willm., 
W.  &  H.  52. 

19.  Revival  of  debt  by  one  partner. — 
Where  the  members  of  a  firm  gave  a 
bond,  individually,  for  a  debt  of  the  firm, 
and  property  was  delivered  by  them  and 
accepted  as  a  payment  thereof,  it  was  held 


201 


136*  IMPLIED    POWERS   OF    PARTNERS.  [BOOK   II., 

Tender. — If  a  debt  is  owing  to  a  firm,  tender  to  one  partner  is  ten- 
der to  all,  and  if  a  debt  is  owing  by  a  firm,  tender  by  one  partner  is 
tender  by  all ;  (e)  and  if,  after  tender  by  a  firm,  the  creditor  demands 
the  sum  tendered,  a  refusal  to  pay  made  by  the  partner  on  whom  the 
demand  is  made  is  a  refusal  by  the  firm.  (/) 

12.  Deeds. — One  partner  has  no  implied  authority  to  bind  *his 
copartners  by  deed;(5r)  but  a  release  of  a  debt  or  demand  r^j.^y 
stands  on  a  peculiar  ground,  and  will  bind  the  firm,  though 
executed  by  one  partner  ouly.  (/i)  A  deed  executed  by  one  partner, 
in  the  name  and  in  the  presence  of  his  copartners,  is  deemed  an  exe- 
cution by  them;(i)  and  if  one  partner  executes  a  warrant  of  attorney 
in  the  partnership  name,  with  the  consent  of  his  copartner,  the  court 
will  not  set  it  aside  on  the  ground  that  the  latter  did  not  execute  it.  {k) 

A  joint  and  sev^eral  bond,  executed  by  one  partner  in  the  name  of 
himself  and  copartners,  bind<  him  separately,  although  it  is  invalid 
ao-ainst  them ;  {I)  and  it  has  been  held  that  a  deed  purporting  to  be 
made  by  all  the  partners  of  a  firm,  and  to  assign  all  their  property 
to  trustees  for  creditors,'  is  operative  against  a  partner  who  executes 
it,  although  his  copartners  ultimately  decline  to  execute  it  also.(m)2(V 

that  the  bond  was  thereby  discharged,  and  name  and  on  behalf  of  the  firm,  was 
that  it  was  not  in  the  power  of  one  of  the  held  to  be  the  bond  of  the  firm  ;  and  see 
oblio-ors,  by  agreement  with  the  obligee,  Palmer  v.  Justice  Assurance  Society,  & 
to  withdraw  the  payment,  and  thus  again    El.  &  B.  1015. 

put  the  bond  in  force.     Jarman  v.  Ellis,  7        {k)  Brutton  v.  Burton,  1  ChiUy  707. 

Jones  (N.  C.)  L.  77.  (0  Elliott  :-.  Davis,  2  Bos.  &  P.  338. 

(e)  Douglas  v.  Patrick,  3  T.  K.  683.  (m)  Bowker  v.  Burdekin,  11   Mees.  & 

(/)  Peirse  v.  Bowles,  1  Stark.  323.  W.  128;  Curaberledge  v.  Lawson,  1  C.  B, 

{g)   Harrison  v.  Jackson,  7  T.  R.  207;    (N.  S.)  709;  and  compare  Latch  v.  Wed- 

Steiglitz  V.  Eggington,  Holt  141.     As  to    lake,  11  Ad.  &  E.  959,  and  Lascaridi  v. 

presuming   an  authority  given   by  deed,    Gurney,  9  Jur.  (X.  S.)  302,  C.  P. 

see  Holt  141.  20.  Deeds  :  The  general  rule  requir- 

(A)  See  Hawkshawu  Parkins,  2  Swanst.    ing    special    authority.— It    is    a  well- 

539,  and  as  to  creditors'  deeds,  Dudgeon    settled,  though  technical  rule  of  the  com- 

t>.  O'Connell,  12Ir.  Eq.  566.     See,  in  cases    mdn   law.  that  one  partner  cannot  bind 

of  fraud,  ante  p.  *135,  note  (r),  and  ivfra,    his  copartner  by  the  execution  of  a  deed 

«  jielease."  (Anthony  v.  Butler,  13  Pet.  (U.  S.)  423), 

(i)  Ball  V.  Dunsterville,  4  T.  R.  313;    unless  his  authority  so  to  do  is  itself  under 

Burn  V.   Burn,   3    Ves.   578.     See,   as   to    seal.     Donaldson  v.  Kendall,  2  Ga.  Dec. 

ratifying  a  deed  executed  by  one  person    227 ;  Trimble  v.  Coons,  2  A.  K.  Marsh. 

for  another,  Ttipper  v.  Foulkes,  9  C.  B.    (Ky.)   375;    Snyder  v.    May,   19   Pa.   St. 

(N.  S.)  797.    In  Orr  v.  Chase,  1  Mer.  729,    235 ;  Napier  v.  Catron,  2  Humph.  (Tenn.) 

a  bond  executed  by  one  partner,  in  the    534 ;  Lambden  v.  Sharp,  9  Id.  224 ;  Mor- 

202 


CHAP.  I.,  §  II.]  DOCTRINES   OF   AGEXCY.  IS?*" 

13.  Distress. — If  several  partners  grant  a  lease,  any  one  of  thera 
may  distrain,  or  appoint  a  bailiff  to  distrain,  in  the  name  of  all ;  and 


ris  V.  Jones,  4  Harr.  (Del.)  428. 

In  Blackburn  v.  McCallister  (Peck 
(Tenn.)  371)  it  is  held  that  he  may  do  so 
if  the  terms  of  the  partnership  authorize 
it ;  but,  in  Napier  v.  Catron,  supra,  where, 
in  the  agreement  of  partnership,  under 
seal,  each  ptrrtner  was  authorized  to  bind 
his  copartners  by  deed,  and  such  agree- 
ment expired  by  its  own  limitation,  and 
was  continued  by  a  written  agreement,  not 
under  seal,  it  was  held  that  tlie  continua- 
tion did  not  carry  with  it  the  power ;  and 
that  a  mortgage  of  real  estate,  executed 
by  one  of  the  firm  to  secure  the  partner- 
ship, did   not  bind    the  other  members. 

In  Harrison  v.  Jackson  (7  T.  K.  207,  210) 
Lord  Kenyon  said :  "  The  law  of  mer- 
chants is  part  of  the  law  of  the  land  ;  and 
in  mercantile  transactions,  in  drawing  and 
accepting  bills  of  exchange,  it  never  was 
doubted  but  that  one  partner  might  bind 
the  rest.  But  the  power  of  binding  each 
other  by  deed  is  now,  for  the  first  time, 
insisted  on,  except  in  the  nisi  prius  case 
cited,  the  facts  of  which  are  not  sufiiciently 
disclosed  to  enable  me  to  judge  of  its  pro- 
priety. Then  it  was  said  that  if  this 
partnership  were  constituted  by  writing 
under  seal,  that  gave  authority  to  each  to 
bind  the  otiiers  by  deed.  But  I  deny 
that  consequence  just  as  positively  as  tlie 
former;  for  a  general  partnership  agree- 
ment, though  under  seal,  does  not  author- 
ize the  partners  to  execute  deeds  for  each 
other,  unless  a  particular  power  be  given 
for  that  purpose.  This  would  be  a  most 
alarming  doctrine  to  hold  out  to  the  mer- 
cantile world  ;  if  one  partner  could  bind 
the  others  by  such  a  deed  as  the  present, 
it  would  extend  to  the  ca^  of  mortgages, 
and  would  enable  a  partner  to  give  to  a 
favorite  creditor  a  real  lien  on  the  estates 
of  the  other  partners." 

The  acting  partner  of  a  mercantile  part- 


nership cannot  transfer  the  real  property 
of  the  firm  in  the  same  manner  as  its 
personal  property  ;  the  conveyance,  as- 
well  as  the  descent  of  real  property,  is 
regulated  by  statute ;  and  neither  of  these 
modes  is  aflected  by  any  general  law  of 
partnership.  Piatt  v.  Oliver,  3  McLean 
(U.  S.)  27;  affirmed  on  other  grounds,  3 
How.  333. 

For  the  same  reason,  one  partner  can- 
not execute  a  bond  under  seal,  in  the 
partnership  name,  so  a?  to  bind  the  other 
partner  (Gerard  v.  Basse,  1  Dall.  (U.  S.) 
119  ;  Hart  v.  Withers,  2  Pen.  (X.  J.)  285  ,- 
Button  V.  Hampson,  Wright  (Ohio)  93  ; 
McDonald  v.  Eggleston,  26  Vt.  1-54  ;  Pier- 
son  V.  Hooker,  3  Johns.  (N.  Y.)  68 ;  and 
the  plea  of  non  est  factiira  will  be  sus- 
tained in  an  action  against  the  firm  on  a 
bond  so  executed,  even  though  it  was  exe- 
cuted under  an  authority  from  the  copart- 
ner, not  under  seal,  to  execute  a  note  in 
his  name.  Henry  County  v.  Gates,  26 
Mo.  315.  In  short,  at  common  law,  one 
partner  cannot  do  any  act  under  seal  to 
afiect  the  interests  of  his  copartner,  unless 
it  is  to  release  a  debt.  M'Bride  v.  Hagan, 
1  Wend.  (N.  Y.)  326. 

Cases  holding  parol  or  verbal  au- 
thority sufficient. — In  Gram  v.  Seton 
(1  Hall  (N.  Y.)  262)  a  case  decided  in  the 
Superior  Court  of  the  city  of  New  York, 
Jones,  C.  J.,  after  reviewing  the  English 
and  American  cases  on  this  subject,  says : 
"  The  principle  that  a  partner  cannot,  by 
virtue  of  the  authority  he  derives  from 
the  relation  of  copartnership,  bind  his 
copartner  by  deed,  has  been  too  long  set- 
tled to  be  now  shaken.  It  is  the  technical 
rule  of  the  common  law  applicable  to 
deeds  which  has  been  engrafted  into  the 
commercial  system  of  the  law  of  partner- 
nership ;  and  unless  the  charter  party  in 
question  can,  under  the  circumstances  of 


203 


137* 


IMPLIED    POWERS    OF    PARTNERS. 


[book  II., 


a  distress  by  one  partner,  or  by  the  bailiff  appointed  by  him,  will  be 
lawful,  although  the  other  partners  are  no  parties  to  the  distress  and 
do  not  assent  thereto,  (n) 


this  case,  be  construed  to  be  the  deed  of 
Bunker,  the  defence  must  prevail.  The 
reasons  for  the  restrictions  are  not  very 
satisfactory,  for  all  tl>e  mischiefs  which 
the  expositors  of  the  rule  ascribe  to  the 
authority  of  members  of  a  copartnership 
to  seal  for  their  copartners  may  flow 
almost  as  extensively,  and  nearly  with 
equal  facility,  from  the  use  of  the  name 
and  signature  of  the  copartnership.  The 
dangers  of  allowing  the  use  of  a  seal  to 
the  members  of  a  copartnership  are  sup- 
posed to  consist  in  these  two  attributes  of 
the  seal :  that  it  imports  a  consideration, 
and  that  it  is  competent  to  convey  abso- 
lutely, or  to  charge  and  encumber  real 
estate.  But  negotiable  paper,  by  which 
the  partner  may  bind  the  firm,  equally 
imports  a  consideration  with  a  seal ;  and, 
upon  general  principles,  the  use  of  the 
seal  of  the  copartner,  equally  with  the 
signature  of  the  copartnership,  would,  if 
permitted,  be  restricted  to  copartnership 
purposes  and  copartnership  operations 
solely,  and  the  joint  deed  of  the  copart- 
ners, executed  by  the  present  for  the  ab- 
sent members,  be  held  competent  to  con- 
vey or  to  encumber  the  copartnership 
property  alone,  and  to  have  no  operation 
upon  tlie  ptivat*  funds  or  separate  estate 
of  the  copartners.  With  these  restric- 
tions upon  the  use  and  operation  of  the 
seal,  is  not  the  power  of  a  partner  to  bind 
his  copartner  and  to  charge  and  encum- 
ber his  estate  as  great  and  as  mischievous, 
without  the  authority  to  use  the  seal  of 
the  absent  partner,  as  it  would  be  with 
that  authority  ?  Those  powers  unde- 
niably place  the  fortune  of  the  members 
of  a  general  copartnership,  to  a  great  de- 
gree, at  the  disposal  of  any  one  of  the  co- 


partners ;  but  it  is  necessary  to  the  bene- 
ficial management  of  the  joint  concern 
that  extensive  powers  should  be  vested  in 
the  members  who  compose  it ;  and  when 
the  copartners  live  remotely  from  each 
other,  their  joint  business  concerns  can- 
not be  advantageously  conducted  or  car- 
ried on  without  a  latitude  of  authority  in 
each  which  is  inconsistent  with  the  per- 
fect safety  of  the  other  copartners.  It 
cripples  the  operation  of  a  partner,  whose 
distant  residence  precludes  a  personal  co- 
operation, to  deny  him  the  use  of  the  seal 
of  his  copartner  for  instruments  requir- 
ing it,  and  which  the  exigencies  of  their 
joint  concerns  render  expedient  or  bene- 
ficial to  them.  He  must  be  clothed  with 
the  power  to  execute  deeds  for  his  copart- 
ner when  necessarily  required  for  the 
purposes  of  the  trade ;  and  if  that  au- 
thority is  not  inherent  in  the  copartner- 
ship, it  must  be  conferred  by  letter  of 
attorney,  and  it  must  be  general,  or  it  will 
be  inadequate  to  the  ends  of  its  creation. 
A  copartnership,  especially,  which  is  em- 
ployed in  foreign  trade,  and  has  occasion 
to  employ  ships  for  the  transportation  of 
merchandise,  or  to  borrow  money  on  re- 
spondentia, if  its  members  are  dispersed, 
as  is  often  the  case,  must  be  seriously  em- 
barrassed in  it?  operations  by  the  applica- 
tion of  the  rule  that  requires  every  co- 
partner who  is  to  be  bound  by  the  charter 
party  or  the  respondentia  bond  to  seal  it 
personally,  or  by  attorney  duly  consti- 
tuted for  that  specific  purpose,  with  its 
own  seal.  Similar  difiiculties  would  arise 
out  of  the  same  rule  when  the  operations 
of  the  house  required  the  copartnership  to 
execute  other  deeds.  Can  it  then  be  that 
this  stern  rule  of  the  common  law,  which 


(n)  See  Robinson  v.  Hofman,  4  Bing.  562,  and  the  cases  there  cited. 

204 


CHAP.  I.,  §  II.] 


DOCTRINES   OF    AGENCY. 


137^ 


14.  Extension  of  business. — It  follows,  from  the  principles  investi- 
gated at  the  commencement  of  the  present  chapter,  that  one  partner 


has  its  appropriate  sphere  of  action,  and 
a  most  salutary  operation  on  those  rela- 
tions of  society  where  men  not  otherwise 
connected  are  the  owners  of  undivided 
property,  is  to  be  applied  in  all  its  force, 
and  to  govern  with  unbending  severity  in 
the  concerns  of  copartners  whose  inti- 
mate connection  and  mutual  interest  re- 
quire such  large  power  and  ample  confi- 
dence in  the  integrity  and  prudence  of 
eac'i  other,  to  give  to  their  operations 
efficiency,  vigor  and  success  ?  The  pres- 
sure of  these  considerations  has  induced 
a  relaxation  of  the  common  law  rule  to 
adapt  it  to  the  exigencies  of  commercial 
copartnerships  and  other  associations  of 
individuals  operating  with  joint  funds  for 
the  common  benefit.  The  rule  itself  re- 
mains, but  the  restrictions  it  imposes  are 
qualified  by  the  application  of  other  prin- 
ciples. The  general  authority  of  a  part- 
ner, for  example,  derived  from  his  relation 
to  his  copartners,  does  not  empower  him 
to  seal  an  instrument  for  them,  so  as  to 
make  it  binding  upon  them  without  their 
assent  and  against  their  will.  This  is  the 
fair  import  of  the  modern  cases,  and  is,  I 
apprehend,  the  principle  courts  are  dis- 
posed to  apply  to  the  use  of  a  seal  in 
joint  contracts  for  copartnership  purposes. 
An  absent  partner  is  not  bound  by  a  deed 
executed  for  him  by  his  copartner,  with- 
out his  previous  authority  or  permission 
or  his  subsequent  assent  and  adoption. 
But  the  previous  authority  or  permission 
of  one  partner  to  another  to  seal  for  him, 
or  his  subsequent  adoption  of  the  seal  as 
his  own,  will  impart  eflBcacy  to  the  instru- 
ment as  his  deed ;  and  that  previous  au- 
thority or  subsequent  adoption  may  be  by 
parol.  These  are  the  results  which  I  de- 
duce from  the  judicial  decisions,  especially 
those  of  our  own  courts,  on  the  subject ; 
and,  if  I  am  correct  in  my  deduction,  the 


conclusion  must  be  favorable  to  the 
validity  of  this  gharter  party  as  the  deed 
of  both  the  partners."  See,  also,  to  the 
efTect  that  the  authorization  may  be  by 
parol,  Grady  v.  Robinson,  28  Ala.  289 ; 
Herbert  v.  Hanrick,  16  Ala.  581  ;  Drum- 
wright  V.  Philpot,  16  Ga.  424;  Haynes  v. 
Seachrest,  13  Iowa  455 ;  Ely  v.  Hair,  16 
B.  Mon.  (Ky.)  230;  Pike  v.  Bacon,  20 
Me.  280;  Cady  v.  Sheperd,  11  Pick. 
(Mass.)  400;  Clement  v.  Brush,  3  Johns. 
(N.  Y.)  Cas.  180;  Swan  v.  Stedman,  4 
Mete.  (Mass.)  548  ;  Fox  v.  Norton,  9  Mich. 
207;  Gwinn  v.  Rooker,  24  Mo.  290; 
Smith  V.  Kerr,  3  N.  Y.  144;  Bond  v. 
Aitkin,  6  Watts  &  S.  (Pa.)  165  ;  Johns  v. 
Rattin,  30  Pa.  St.  84  ;  Lowery  v.  Drew,  18 
Tex.  786 ;  Wilson  i'.  Hunter,  14  Wis.  683. 

Thus,  an  attachment  bond  signed  and 
sealed  by  one  partner  in  the  firm  name, 
and  authorized  or  ratified  by  parol,  is 
valid.  Jeffreys  v.  Coleman,  20  Fla.  536. 
in  Alabama,  however,  a  deed  by  one 
partner  in  the  firm  name  conveys  only 
his  interest,  though  subsequently  the 
other  partners  orally  assent.  Bumson  v. 
Morgan,  76  Ala.  593. 

Previous  assent  or  subsequent  ac- 
quiescence or  ratification. — The  weight 
of  authority  is  to  the  eflect  that  while  one 
partner  cannot  bind  his  associates  by 
deed,  by  virtue  of  the  contract  of  part- 
nership, yet  where  he  executes  a  sealed 
instrument  in  the  name  of  the  firm,  under 
a  prior  verbal  authority,  or  subsequent 
verbal  ratification,  it  is  binding  on  the  firm 
(Grady  v.  Robinson,  28  Ala.  289  ;  Her- 
bert V.  Hanrick,  16  Ala.  581  ;  Gibson  v. 
Wardon,  14  Wall.  (U.  S.)  244 ;  Drum- 
wright  V.  Philpot,  16  Ga.  424  ;  Haynes  v. 
Seachrest,  13  Iowa  455;  Ely  v.  Hair,  16 
B.  Mon.  (Ky.)  230;  Pike  v.  Bacon,  20 
Me.  280;  Cady  v.  Sheperd,  11  Pick. 
(Mass.)  400 ;  Clement  v.  Brush,  3  Johns. 


205 


137 


IMPLIED    POn^ERS    OF    PARTNERS. 


[book  II., 


has  no  implied  power  to  biiul  the  firm  with  respect  to  matters  not 
falling  within  the  scope  of  the  Ijusiness  which  it  ostensibly  carries  on 
or  was  formed  to  carry  on.  (o) 


(N.  Y.)  Cas.  180;  Swan  v.  Stedman,  4 
Mete.  (Mass.)  548;  Fox  v.  Norton,  9 
Mich.  207;  Gwinn  v.  Kooker,  24  Mo. 
290;  Smith  v.  Kerr,  3  N.  Y.  144;  Bond 
V.  Aitkin,  6  Watts  &  S.  (Pa.)  165;  Johns 
v.  Kattin,  30  Pa.  St.  84  ;  Lowery  v.  Drew, 
18  Tex.  786 ;  Wilson  v.  Hunter,  14  Wis. 
683) ;  and  that  the  assent  of  the  other 
partner  may  be  implied  from  circum- 
stances. Person  v.  Carter,  3  Murph.  (N. 
C.)  321 ;  Layton  r.  Hastings,  2  Harr. 
(Del.)  147 ;  Doe  v.  Tupper,  4  Sm.  &  M. 
(Miss.)  261;  Morse  v.  Bellows,  7  N.  H, 
•549;  Lucas  v.  Sanders,  1  McMull.  (S.  C.) 
311;  Lee  v.  Onstott,  1  Ark.  206;  Mont- 
gomery V.  Boon,  2  B.  Mon.  (Ky.)  244; 
M'Cart  V.  Lewis,  Id.  267  ;  Cummings  v. 
Carsily,  5  Id.  47  ;  Bentrin  v.  Zieriien,  4 
Mo.  417;  Turbeville  v.  Ryan,  1  Humph. 
<Tenn.)  113. 

But  the  previous  authorization  or  assent, 
or  the  subsequent  ratification,  must  be 
proved  by  him  who  seeks  to  enforce  the 
instrument  against  the  other  partner 
(Shirley  v.  Fearne,  33  Miss.  653),  other- 
wise the  deed  will  only  pass  the  indi- 
vidual interest  of  the  signing  partner. 
Walton  V,  Tosten,  49  Miss.  569.  See, 
however,  Kasson  v.  Brocker  (47  Wis.  79), 
where,  on  an  appeal  from  the  disallowance 
■of  a  claim  of  partners  in  their  firm  name, 
the  appeal  bond  is  executed  in  the  firm 
name,  the  presumption  is,  in  the  absence 
of  all  proof,  that  it  was  so  executed  an  to 
bir.d  both  partners  and  the  mode  of  exe- 
cution approved.  Contra,  Butterfield  v. 
Hemsley,  12  Gray  (Mass.)  226.  But  a 
declaration  alleging  that  the  partners 
"  made  their  certain  writing  obligatory 
signed  by  their  firm  name,"  "  and  sealed 
with    their   seal,"    &c.,    is    good    on    de- 


murrer ;  if  it  was  the  deed  of  but  one,  it 
must  be  shown  by  plea  on  the  part  of  the 
partner  who  did  not  execute  tiie  bond. 
Massey  v.  Pike,  20  Ark.  92. 

The  instrument  may  become  binding  on 
the  otiier  partners  on  the  principles  of 
estoppel  and  ratification.  Mann  v.  Etna 
Ins.  Co.,  40  Wis.  549  ;  Baldwin  v.  Rich- 
ardson, 33  Tex.  16.  And  the  bringing  of 
an  action  upon  it,  by  the  firm,  is  an 
adoption  of  the  instrument,  and  the  de- 
fendant cannot  object  that  it  is  not  the 
deed  of  the  partnership.  Dodge  v.  M'Kay, 
4  Ala.  346. 

Again,  such  a  deed  is  binding  on  the 
partner  who  does  not  execute  it,  if  he  is 
present  and  sees  the  other  partner  execute 
it,  and  does  not  object ;  his  acquiescence, 
with  full  knowledge  of  the  act  done, 
amounts  to  consent..  Kasson  v.  Brocker. 
1  N.  W.  Rep.  (N.  S.)  418  ;  Anthony  v.  But- 
ler, 13  Pet.  (U.  S.)  423;  Baldwin  v.  Rich- 
ardson, 33  Tex.  16;  Bentrin  v.  Zieriien,  4 
Mo.  417;  Blackburn  v.  McCallister,  Peck 
(Tenn.)  371 ;  Button  v.  Hampson,  Wright 
(Ohio)  93 ;  Cummins  v.  Cassidy,  5  B.  Mon. 
(Ky.)  74 ;  Day  v.  Lafierty,  4  Ark.  450  ;  Doe 
V.  Tupper,  12  Miss.  261 ;  Donaldson  v.  Ken- 
dell,  2  Ga.  Dec.  227  ;  Fitchburn  v.  Boyer,  5 
Watts  (Pa.)  159 ;  Fleming  v.  Dunbar,  2  Hill 
(S.  C.)  532;  Gerard  v.  Basse,  1  Dall.  (U.  S.) 
119;  Hart  v.  Withers,  2  N.  J.  L.  285; 
Henderson  i'.  Barbee,  6  Blackf.  (Ind.)  26  ; 
Hodson  I'.  Porter,  2  Colo.  T.  28  ;  James  v. 
Boslwick.  Wright  (Ohio)  142;  Lambden  v. 
Sharp,  9  Humph.  (Tenn.)  224;  Layton  v. 
Hastings,  2  Harr.(Del.)  147 ;  Lee  v.  Onstott, 
1  Ark.  206;  Little  v.  Hazard,  5  Harr. 
(Del.)  291 ;  Lucas  v.  Saunders,  1  McMull. 
(S.C.)311 ;  Mackay «;.  Bloodgood,  9  Johns. 
(N.  Y.)  285  ;   M'Cart  v.  Lewis,  Id.  267 ; 


(o)  Ante  p.  *124,  et  seq. 


206 


CHAP.  I.,  §  II.]  DOCTRINES    OF    AGENCY.  1,38* 

-.        *  Guarantees  and  indemnities, — How  far  one  partner  can 

-■   bind  the  firm  by  a  guarantee,  obliging  the  firm  to  pay,  if 

some  other  person  does  not,  has  been  much  disputed.     The  later  cases, 

McDonald  r.  Eggleston,  26  Vt.  154  ;  Modi-  the  sale  being  bona  fide,  aiud  for  the  full 
sett  V.  Lindley,  2  Blackf  (Ind.)  119  ;  Mont-  value  of  the  property,  and  made  to  pay  a 
gomery  v.  Boone,  2  B.  Mon.  (Ky.)  244;  pressing  debt  of  the  absent  partner,  it  was 
Morris  v.  Jones,  4  Harr.  (Del.)  428;  held  that  the  sale  was  binding  upon  the 
Morse  v.  Bellows,  7  N.  H.  550 ;  Napier  v.  absent  partner,  and  passed  the  whole  title 
Catron,  2  Humph.  (Tenn.)  534;  Person  of  the  firm  to  the  property. 
V.  Carter,  3  Murph.  (N.  C.)  321  ;  Pettes  v.  So,  wliere  a  partner  executes  a  bond  in 
Bloomer,  21  How.  (N.  Y.)  Pr.  317;  Pier-  the  name  of  the  firm,  and,  upon  being  In- 
son  V.  Hooker,  3  Johns.  (N.  Y.)  68  ;  Posey  formed  that  it  did  not  bind  the  partners, 
V.  Bullitt,  1  Id.  99  ;  Price  v.  Alexander,  2  with  the  consent  of  the  obligor,  removes 
Or.  (Iowa)  427  ;  Snyder  v.  May,  19  Pa.  St.  the  seal,  and  redelivers  it,  with  the  intent 
235  ;  Trimble  v.  Coons,  2  A.  K.  Marsh,  to  bind  the  company,  it  is  efl^ectual  as 
(Ky.)375;  Turbeville  r.  Ryan,  1  Humph,  their  promissory  note.  Horton  v.  Child, 
(Tenn.)  113;  United  States  i-.  Astley,  3  4  Dev.  (N.  C.)  L.  460.  Other  well-con- 
Wash.  (U.  S.)  508.  sidered  cases,  however,  hold  that  a  bond 

Instrument  equally  operative  with-  given  in  the  partnership  name,  by  one  of 
out  a  seal. — Where  the  instrument  would  the  partners,  for  a  simple  contract  debt 
be  equally  operative  without  a  seal,  the  due  by  the  firm,  does  not  extinguish  the 
rule  does  not  apply,  e.  g.,  in  the  case  of  a  original  debt  as  to  the  firm.  Flemming 
sealed  bill  of  sale  of  partnership  property,  t).  Lawhorn,  Dudley  (S.  C.)  360;  Dickin- 
Patten  i'.  Kavanagh,  11  Daly  (N.  Y.)  348.  son  v.  Legare,  1  Dessau.  (S.  C.)  537  ;  Bond 
S.  P.,  Keller  v.  West,  39  Hun  (N.  Y.)  v.  Aiikin,  6  Watts  &  S.  (Pa.)  165.  But 
348;  Everit  v.  Strong,  5  Hill  (N.  Y.)  163.  see  Jacobs  v.  M'Bee,  2  McMull.  (S.  C.) 
In  Ex  parte  Bosanquet  (De  Gex  432)  348.  So,  also,  it  has  been  held  that  a 
the  Chief  Judge  in  Bankruptcy  said  :  "As  sealed  lease  executed  by  one  partner  only, 
to  the  objection  that  the  security,  being  in  the  name  of  the  partnership,  though 
effected  by  a  deed  executed  by  one  part-  for  a  term  which  required  no  seal,  does 
ner,  could  not  bind  the  firm,  it  might  be  not  pass  the  estate  of  the  other  partners 
true  that  the  instrument  would  not  take  without  evidence  of  previous  authority  or 
effect  as  the  deed  of  the  firm ;  but  the  subsequent  ratification  by  them.  Dillon 
transaction  itself  was  one  within  the  v.  Brown,  11  Gray  (Mass.)  179. 
authority  of  the  partner,  and  the  circum-  The  true  rule  is  thus  stated  by  Chief 
stance  of  a  deed  being  executed  would  not  Justice  Marshall,  in  Anderson  v.  Tomp- 
invalidale  the  contract."  Accordingly,  kins,  Brock.  (U.  S.)  456,  462:  "It  is 
one  partner  may  transfer  personal  prop-  said  this  transfer  of  property  is  by  a  deed, 
erty  of  the  firm  in  payment  of  a  bona  fide  and  that  one  partner  has  no  right  to  bind 
firm  debt,  even  though  he  do  so  by  deed  another  by  deed.  For  this  a  case  is  cited 
under  seal.  Hodges  v.  Harris,  6  Pick,  which,  I  believe,  has  never  been  ques- 
(Mass.)  362.  tione.l   in     England  or  in    this    country. 

In  Forkner  v.  Stuart  (6  Gratt.  (Va.)  Harrison  v.  Jackson,  7  T.  R.  207.  I  am 
197),  where  one  partner,  in  the  absence  not,  and  never  have  been  satisfied  with 
of  his  copartner,  executed  a  bill  of  sale,  the  extent  to  which  this  doctrine  has 
under  seal,  of  all  the  partnership  effects,    been  carried.     The  particular  point  deci- 

207 


138*                               IMPLIED    POWERS    OF   PARTNERS.  [bOOK    II., 

however,  decide  that  unless  it  can  be  shown  that  the  giving  of  guar- 
antees is  necessary  for  ciirrying  on  the  business  of  tiie  firm  in  the 
ordinary  way,  one  of  the  members  will  be  held  to  have  no  implied 

ded  in  it  is  certainly  to  be  sustained  on  sealed  a  note,  given  in  the  name  of  the 
technical  reasoning,  and  perliaps  ought  firm,  it  is  competent  to  go  to  the  jury  on 
not  to  be  controverted.  I  do  not  mean  to  the  Joint  execution.  It  is  not  material  to 
controvert  it.  That  was  an  action  of  the  liability  of  the  two  that  they  used  the 
covenant  on  a  deed ;  and  if  the  instrument  name  of  the  firm  without  the  third  part- 
was  not  the  deed  of  the  defendants,  the  ner's  assent.  Potter  v.  McCoy,  26  Pa.  St. 
action  could  not  be  sustained.     It  was  de-  458. 

cided  not  to  be  the  deed  of  the  defendants.  The  members  of  a  copartnership  are 
and  I  submit  to  the  decision.  No  action  tenants  in  common  of  land  owned  by  the 
ciin  be  sustained  against  the  partner,  who  firm  ;  and  a  deed  by  all  the  firm,  but  exe- 
has  not  executed  the  instrument,  on  the  cuted  by  only  one  partner,  is  eSectual  to 
deed  of  his  copartner.  No  action  can  be  convey  that  partner's  undivided  interest, 
sustained  against  the  partner  which  rests  Jackson  v.  Standford,  19  Ga.  14;  Laytoa 
on  the  validity  of  such  a  deed,  as  to  the  v.  Hastings,  2  Harr.  (Del.)  147  ;  Jones  v. 
person  who  has  not  executed  it.  This  Neale,  2  Patt.  &  H.  (Va.)  339. 
principle  is  settled.  But  I  cannot  admit  A  conveyance,  by  one  member  of  a 
its  application  in  a  case  where  the  prop-  solvent  firm,  of  his  undivided  interest  in 
erty  may  be  transferred  by  delivery,  under  the  real  estate  of  the  partnership,  to  a 
a  parol  contract,  where  the  right  of  sale  is  stranger,  whether  made  upon  a  sale,  or  by 
absolute,  and  the  change  of  property  is  way  of  payment  of  his  individual  debt,, 
consummated  by  delivery.  I  cannot  ad-  is  valid  as  against  the  copartners  ;  and 
mit  that  a  sale,  so  consummated,  is  an-  they  cannot  maintain  an  action  to  have  it 
nulled  by  the  circumstance  that  it  is  set  aside,  on  the  ground  that  it  was  made 
attested  by,  or  that  the  trusts  under  which  without  their  consent  and  impairs  the 
it  is  made  are  described  in  a  deed.  No  credit  of  the  firm.  Treadwell  v.  Wil- 
case  goes  thus  far,  and  I  think  such  a  liams,  9  Bosw.  (N.  Y.)  649. 
decision  could  not  be  sustained  on  prin-  But  in  Fisher  v.  Pender  (7  Jones  (N. 
ciple."  C.)  L.  483),  where,  upon  the  face  of  an  in- 
Binding  on  partner  executing  it,  strument,  it  appeared  that  one  signed, 
though  not  on  copartner. — When  one  sealed  and  delivered  it,  in  order  to  bind 
partner,  without  the  consent  of  his  copart-  the  firm  of  which  he  was  a  member,  and 
ner,  gives  the  security  of  the  firm,  under  not  as  his  own  individual  deed,  it  was 
seal,  for  a  partnership  debt,  and  the  cred-  held  that  he  was  not  individually  bound, 
itor  afterwards  releases  the  copartner  from  Effect  of  instrument  so  executed  as- 
all  partnership  debts,  the  simple  debt  evidence. — The  execution  of  a  bond 
being  merged  in  the  specialty,  the  copart-  under  seal,  without  authority,  by  one  of 
ner  is  released ;  but  the  specialty  still  several  partners,  in  the  name  of  the  firm, 
binds  the  partner  who  signed  the  partner-  creates  no  presumption  that  the  bond  was- 
ship  name.  Clement  v.  Brush,  3  Johns,  received  in  satisfaction  of  the  joint  liability 
(N.  Y.)  Cas.  180.  S.  P.,  Williams  v.  of  al'l  the  members  of  the  firm.  Doniphan 
Hodgson,  2  Harr.  &  J.  (Md.)  474.  v.  Gill,  1  B.  Mon.  (Ky.)  199;  Brazee  v. 

Thus,  where  two  of  three  partners  were  Poyntz,  3  Id.  178. 

present,   and  one   wrote    and   the  other  A  bond  made  by  one  of  the  partners  of 

208 


CHAP.  I.,  §  II.] 


DOCTRINES    OF    AGENCY 


138' 


authority  to  bind  the  firm  by  them,  for,  generally  speaking,  it  is  not 
usual  for  persons  in  business  to  make  themselves  answerable  for  the 
conduct  of  other  people.     The  subject  was  much  considered  in  Brettel 


a  firm,  for  goods  sold  and  delivered,  may 
be  evidence  of  the  time  for  payment,  or 
of  the  amount  (as  any  other  statement  of 
one  of  the  partners  would  be),  but  it  cer- 
tainly does  not  amount  to  plenary  proof 
of  the  consideration,  so  as,  of  itself,  to  en- 
title the  plaintiff  to  recover  of  the  firm 
for  goods  sold  and  delivered.  Fronebarger 
V.  Henry,  (5  Jones  (N.  C.)  L.  548. 

Scope  and  extent  of  the  rule. — One 
partner  cannot  bind  his  copartner  to  exe- 
cute a  deed  with  covenants  of  general 
warranty.  Kuffner  i'.  McConnell,  17  III. 
212. 

So,  a  surviving  partner  cannot  alone 
convey  real  estate  belonging  to  the  firm. 
Galbraith  v.  Gedge,  16  B.  Mon.  (Ky.)  631. 

A  bond  given  for  the  purpose  of  ob- 
taining a  dissolution  of  an  attachment 
of  partnership  property,  and  executed  in 
the  name  of  the  firm,  by  only  one  of  two 
partners  named  as  principals  therein, 
cannot  be  enforced  against  a  surety  with- 
out evidence  of  the  assent  of  the  other 
partner  to  its  execution.  Russell  v.  Ann- 
able,  109  Mass.  72. 

Where  one  partner  signs  the  partner- 
ship name  to  a  forthcoming  bond,  in  a 
case  in  which  the  partnership  is  defend- 
ant, the  bond  is  void  as  to  the  partners 
not  signing  it.  Doe  v.  Tupper,  4  Sm.  & 
M.  (Miss.)  261;  Turbevilie  v.  Ryan,  1 
Humph.  (Tenn.)  113. 

So,  also,  one  partner  cannot  bind  his 
copartner  by  warrant  of  attorney,  under 
seal,  in  the  firm  name,  without  authority. 
Ellis  V.  Ellis,  18  Vr.  (N.  J.)  69,  or  by  exe- 
cuting an  appeal  bond  for  both,  under  his 
general  authority.  People  v.  Judges  of 
Dutchess,  5  Cow.  (N.  Y.)  34  ;  Charman  v. 
McLane,  1  Oreg.  339. 

Its  limits  and  exceptions. — It  has 
been  held  that  one  partner  may  execute 


a  power  of  attorney  (Re  Barrett,  2  Hughes 
(U.  S. )  444),  or  a  charter  party  under  seal 
(Straffin  v.  Newell,  T.  U.  P.  Charlt.  (Ga.) 
163),  or  a  deed  of  composition,  or  release 
of  a  debt  due  the  firm  (Bruen  i'.  Mar- 
quand,  17  Johns.  (N.  Y.)  58;  Smith  v. 
Stone,  4  Gill  &  J.  (Md.)  310;  Pierson  v. 
Hooker,  3  Johns.  (N.  Y.)  68;  Morse  v. 
Bellows,  7  N.  H.  549  ;  Beach  v.  Ollendorf, 
1  Hilt.  (N.  Y.)  41 ;  Crutwell  v.  De  Rossett, 
5  Jones  (N.  C.)  L.  263),  so  as  to  bind  his 
copartner,  or  the  firm  to  which  be  belongs. 

So,  it  is  said  that  a  bond  by  two  part- 
ners, to  one  of  them  as  obligee,  may  be 
obligatory  on  the  other  partner  (O'  Bannon 
V.  Simrall,  IB.  Mon.  (Ky.)  287)  ;  that  a 
bond,  given  by  one  partner  for  the  rent 
of  real  estate  leased  for  the  use  of  the 
partnership,  is  properly  payable  out  of 
the  partnership  eflfects  ;  and  having  been 
so  paid,  creditors  of  another  partner  can- 
not be  substituted  to  the  rights  of  the 
landlord  on  the  bond  (Christian  v.  Ellis, 
1  Gratt.  (Va.)  396)  ;  and  that  one  partner, 
by  an  instrument  under  seal,  may  author- 
ize a  third  person  to  discharge  a  debt  due 
to  the  firm.  Wells  v.  Evans,  20  Wend. 
(N.  Y.)  251 ;  22  Id.  324. 

Under  urgent  circumstances  one  part- 
ner, to  prevent  the  sacrifice  of  the  firm's 
real  estate,  may  give  a  deed  of  trust 
thereof  to  secure  a  firm  debt.  Breen  v. 
Richardson,  6  Colo.  605. 

In  Durant  v.  Rogers  (87  111.  508),  prop- 
erty of  a  firm  was  levied  upon  under  a 
judgment  against  a  portion  only  of  the 
partners,  for  a  trespass  committed  by  the 
active  and  managing  partners,  who,  to 
save  the  property,  procured  plaintiflT  to 
unite  with  them  in  an  appeal  bond, 
whereby  he  was  compelled  to  pay  the 
judgment.  Held,  that  each  member  of 
the   firm    became  liable    to  him  for  the 


209 


14 


138*  IMPLIED    POWERS    OF    PARTNERS.  [bOOK    II., 

V.  Williams,  (p)  There  the  defendants,  who  were  railway  contractors, 
made  a  subcontract  for  the  performance  of  part  of  some  work  they 
had  undertaken.  The  subcontractor  required  a  quantity  of  coal,  and 
one  of  the  defendants,  in  the  name  of  the  firm,  guaranteed  to  the 
plaintiffs,  who  were  coal  merchants,  payment  for  coals  to  be  supplied 
by  them  to  the  subcontractors.  It  was  held  that  this  guarantee  did 
not  bind  the  jiartners  of  the  contractor  signing  it. 

In  Sandilands  v.  Marsh ((/)  a  firm  was  held  bound  by  a  guarantee 
given  by  one  of  the  partners,  but  in  that  case  there  was  evidence  of 
adoption  and  ratification  by  the  firm  of  the  contract  of  which  the 
guarantee  was  part.  In  Ex  parte  Harding  (r)  the  guarantee  was 
several  as  well  as  joint,  and  therefore  bound  those  who  signed  it. 
These  cases  cannot  therefore  be  considered  as  opposed  to  those  in 
which  it  has  been  held  that  one  partner  has  no  implied  power  to 
bind  the  firm  by  guarantees  in  its  name.  21 

amount  so  paid  to  their  use,  whether  they  478.  The  dictum  of  Lord  Mansfield  iu 
all  united  in  the  appeal  or  not,  and  that  Hope  v.  Cust,  1  East  53,  and  the  decision 
no  proof  of  a  promise  to  pay  on  the  part  of  Lord  Eldon  in  Ex  parte  Gardom,  15 
of  one  of  them  not  sued,  and  who  did  not  Ves.  286,  are  opposed  to  these  authorities, 
join  in  the  appeal,  was  necessary,  as  the  but  cannot  be  relied  on  after  the  decision 
law  implied  a  promise,  and  that  in  such  iu  Brettel  v.  Williams, 
case  the  validity  of  the  judgment  appealed  (q)  2  B.  &  A.  673. 
from  was  wholly  immaterial.  (?•)  12  Ch.  D.  557. 

In  Murrell  v.  Murrell  (33  La.  Ann.  21.  Guarantees  and  indemnities.— 
1233)  it  is  held  that  one  partner  may  con-  The  rule  is  well  settled  that  one  partner 
vey  property  of  the  firm  to  his  wife,  in  cannot,  by  his  individual  act,  bind  the 
satisfaction  of  her  claim  for  her  parapher-  firm  as  the  guarantor  of  the  debt  of 
nal  funds  held  by  the  firm.  another,  or  as  a  party  to  a  note  or  bill 

In  Gates  v.  Pollock  (5  Jones  (N.  C.)  L.  made  for  the  accommodation  or  as  the 
344),  where  one  of  two  partners,  who  had  surety  of  another,  without  authority 
entered  into  a  contract  to  do  a  job  of  specially  given  him  for  the  purpose,  or 
work  according  to  specifications,  executed  implied  from  the  common  course  of  busi- 
an  instrument  under  seal,  certifying  that  ness  of  the  firm,  or  from  the  previous 
the  contract  was  forfeited  on  their  part,  course  of  dealings  between  the  parties, 
and  that  there  had  been  a  settlement  and  unless  the  act  of  such  partner  be  after- 
payment to  him  of  a  certain  sum  as  a  wards  ratified  by  the  others.  Sweetser  v. 
"  present,"  it  was  held  that  such  instru-  French,  2  Cush.  (Mass.)  309;  Rollins  v. 
ment  amounted  to  a  release,  and  took  Stevens,  31  Me.  454 ;  Bank  of  Rochester 
away  the  cause  of  action  as  to  both  part-  v.  Bowen,  7  Wend.  (N.  Y.)  158  ;  Mayberry 
ners.  v.  Barniton,  2  Harr.  (Del.)  24;  Maudlin 

(p)  4  Ex.  623.  See,  also,  Hasleham  v.  v.  Branch  Bank,  2  Ala.  502 ;  Selden  v. 
Young,  5  Q.  B.  833  ;  Crawford  v.  Stirling,  Bank  of  Commerce,  3  Minn.  166  ;  Hamill 
4  Esp.  207  ;  Duncan  v.  Lowndes,  3  Camp.    v.  Purviss,  2  Pa.  177  ;  Sutton  v.  Irwine,  12 

210 


DOCTEINES    OF    AGENCY. 


138* 


CHAP.  I.,  §  II.] 

Statute  of  frauds. — With  respect  to  the  statute  of  frauds,  a  guar- 
antee signed  by  one  partner  in  the  name  of  the  firm  is  sufficient  to 
bind  all  the  partners,  if  authority  from  them  can  be  proved,  (s) 


Serg.  &  R.  (Pa.)  13  ;  McQiiewans  v.  Ham- 
lin, 35  Pa.  St.  517.  And  he  who  seeks  to 
hold  the  fiina  in  such  cases,  has  the  bur- 
den of  proving  authority,  consent  or  rati- 
•fication.  Schermerhoru  v.  Schermerhorn, 
1  Wend.  (N.  Y.)  119;  Davis  v.  Blackwell, 
5  111.  App.  32;  Rolston  v.  Click,  1  Stew. 
(Ala.)  526  ;  Foot  v.  Tabir,  19  Johns.  (N. 
Y.)  154  ;  Boyd  v.  Plumb,  7  Wend.  (K  Y.) 
309;  Langan  v.  Hewett,  13  Sm.  &  M. 
(Miss.)  122;  Andrews  v.  Planters'  Bank, 
7  Id.  192.  The  authority  must  be  strictly 
proved,  but  not  necessarily  by  a  written 
authorization.  Moran  v.  Prather,  22  Wall. 
(U.  S.)  492.  It  may  be  proved  by  circum- 
stances (Butler  V.  Stocking,  8  N.  Y.  408)  ; 
but  cannot  be  established  by  any  act  alone 
-of  the  partner  who  assumed  to  execute 
the  alleged  guaranty.  Osborne  v.  Stone, 
30  Minn.  25. 

But  the  power  to  sign  the  firm  name, 
by  endorsement,  for  accommodation  pur- 
poses, will  not  authorize  the  signature  of 
the  firm  name  in  the  face  of  the  note,  as 
an  unconditional  and  distinct  surety.  Mc- 
Guire  v.  Blanton,  5  Humph.  (Tenn.)  361. 

While  it  is  not  within  the  ordinary 
powers  of  a  partner  to  bind  the  firm  to 
pay  the  debt  of  a  third  person  (Shaaber 
V.  Bushong,  105  Pa.  St.  514),  still,  each 
partner  is  the  general  agent  of  the  firm, 
and  has  authority  to  bind  it  by  a  contract 
of  guaranty,  if  such  contract  is  within  its 
scope  of  business ;  and  no  understanding 
between  the  partners  can  afiect  the  right 
of  the  guarantee  to  recover.  First  Nat. 
Bank  v.  Carpenter,  41  Iowa  518. 

So,  also,  the  act  may  be  ratified  by  the 
other  partners,  and  so  become  binding 
upon  them.  Marsh  v.  Gold,  2  Pick. 
{Mass.)  285 ;  Cockroft  v.  Claflin,  64  Barb. 


(N.  Y.)  464;  Clark  v.  Hyman,  55  Iowa 
14. 

Chancellor  Kent  says  (3  Com.  46) : 
"  It  was  formerly  understood  that  one 
partner  might  bind  his  copartners  by  a 
guaranty  or  letter  of  credit  in  the  name 
of  the  firm  ;  and  Lord  Eldon,  in  the  case 
of  Ex  parte  Gardom,  considered  the  point 
too  clear  for  argument.  But  a  diflTerent 
principle  seems  to  have  been  adopted ; 
and  it  is  now  held,  both  in  England  and 
in  this  country,  that  one  partner  is  not 
authorized  to  bind  the  partnership  by  a 
guaranty  of  the  debt  of  a  third  person, 
without  a  special  authority  for  that  pur- 
pose, or  one  to  be  implied  from  the  pre- 
vious course  of  dealing  between  the  par- 
ties, unless  the  guaranty  be  afterwards 
adopted  and  acted  upon  by  the  firm.  The 
guaranty  must  have  reference  to  the 
regular  course  of  business  transacted  by 
the  partnership,  and  then  it  will  be  obli- 
gatory upon  the  company,  and  this  is  the 
principle  on  which  the  distinction  rests. 
The  same  general  rule  applies  when  one 
partner  gives  the  copartnership,  as  a  mere 
and  avowed  surety  for  another,  without 
the  authority  or  consent  of  the  firm ;  for 
this  would  be  pledging  the  partnership 
responsibility  in  a  matter  entirely  uncon- 
nected with  the  partnership  business." 

Lord  Mansfield,  in  a  case  where  the 
firm  sought  to  be  charged  were  bankers 
(Hope  V.  Cust,  cited  in  Sherriff  y.  Wilks, 
1  East  48,  53),  is  said  to  have  remarked  : 
"  There  is  no  doubt  but  that  the  act  of 
every  single  partner,  in  a  transaction  re- 
lating to  the  partnership,  binds  all  others. 
If  one  gives  a  letter  of  credit  or  guaranty 
in  the  name  of  all  the  partners,  it  binds 
all."     Which  is,  no  doubt,  a  correct  state- 


(s)  See  Duncan  v.  Lowndes,  3  Camp.  478. 

211 


138*  IMPLIED    POWERS    OF    PAllTNERS.  [bOOK    II.» 

But  no  partner  is  liable  for  a  false  and  fraudulent  representation  as 
to  the  solvency  of  another  person,  unless  such  representation  is  in 
writing,  and  signed  by  himself.  (^) 

ment  of  the  rule,  as  applicable  to  a  bank-  anty.  Held,  that  this  being  beyond  his^ 
ing  firm,  but  not  when  applied  to  an  or-  power,  it  was  immaterial  that  the  party 
dinarv  trading  partnership,  such  as  was  to  whom  the  guaranty  was  given  had  no 
sou<Tht  to  be  held  for  the  act  of  one  part-  notice  of  the  dissolution  of  the  firm, 
ner  in  Duncan  v.  Lowndes  (3  Campb.  478),  Spurck  v.  Leonard,  9  111.  App.  174. 
where  Lord  Ellenborough  lays  down  the  A  firm  had  authorized  a  partner  to  bor- 
law  as  follows :  "  As  it  is  not  usual  for  row  money  for  it,  and  allowed  him  fre- 
merchants,  in  the  common  course  of  busi-  quently  to  fill  up  notes  over  their  blank 
ness,  to  give  collateral  engagements  of  signatures,  and  to  sign  the  names  of  the 
this  sort,  I  think  you  must  prove  that  members  of  the  firm  to  obligations,  and 
Lowndes  had  authority  from  Bateson  to  such  partner  borrowed  money  for  the  use 
sign  the  partnership  firm  to  the  guaranty  of  the  firm,  upon  his  note,  with  the  names 
in  question.  It  is  not  incidental  to  the  of  his  copartners  endorsed  thereon  as 
general  power  of  a  partner  to  bind  his  guarantors.  Held,  that  it  did  not  matter 
copartners  by  such  an  instrument.  The  even  if  their  names  were  so  signed  by- 
case  was  not,  however,  a  guaranty  in  the  such  partner,  as  he  was  held  out  to  the 
partnership  business,  but  a  guaranty  of  world  as  having  authority  to  do  what  he 
the  acceptances  of  a  third  person,  not  did ;  and  that  the  other  partners  were 
belonging  to  the  partnership  funds.  In  liable  on  such  guaranty.  Fahlman  v. 
Sandilands  v.  Marsh,  2  Barn.  &  Aid.  673,    Taylor,  75  111.  629. 

a  guaranty  of  an  annuity  by  one  partner.  In  Wilkins  v.  Pearce  (5  Den.  (N.  Y.) 
the  partnership  not  dealing  in  annuities,  541)  it  was  held  that  an  agreement,  made 
but  the  dealing  in  this  annuity  being  by  one  partner  of  a  mercantile  firm,  in  the 
known  to  the  other  partner,  and  not  dis-  partnership  name,  to  indemnify  a  third 
approved  of  by  him,  and  he  having  no  person  for  accepting,  for  the  accommoda- 
knowledge  of  the  guaranty,  was  held  to  tion  of  the  firm,  a  draft  drawn  upon  him 
bind  the  partnership,  upon  the  ground  by  such  partner,  is  valid,  although  another 
that  the  transaction  as  to  the  annuity  be-  of  the  partners  at  the  time  dissented  from 
ing  adopted  as  a  part  of  the  business  bind-    the  agreement. 

ing  on  the  partnership,  the  whole  trans-  Where  one  partner  signed  the  firm 
action  bound  the  partnership,  although  name  to  a  guaranty  in  the  following  form  : 
the  guaranty  was  not  known.  This  must  "If  you  rent  your  house  to  H.,  I  will  be 
have  been  sustained  upon  the  notion  that  responsible  for  the  rent  of  the  same  as 
dealers  in  annuities,  in  the  ordinary  course  long  as  said  H.  remains  in  our  employ," 
of  things,  were  accustomed  to  guarantee  it  was  held  that  by  the  terms  of  the  guar- 
them  ;  for  the  mere  adoption  of  an  act  of  anty  that  partner  alone,  and  not  the  firm, 
one  partner,  where  there  was  a  conceal-  were  bound.  Avery  v.  Kowell,  59  W  is. 
ment  of  material  circumstances,  might  not    82. 

bind  him,  if  the  business  were  not  within  [t)  9  Geo.  IV.,  c.  14,  §  6.  Swift  v. 
the  scope  of  their  ordinary  business."  Jewsbury,  L.  R.,  9  Q.  B.  301  ;  reversing 

Instances    and    illustrations.  —  Two    Swift  v.   Winterbotham,  L.   E.,  8  Q.  B^ 
years  after  the  dissolution  of  a  firm,  one    244. 
partner  signed  the  firm  name  to  a  guar- 

212 


€HAP.  I.,  §  n.]  DOCTRINES    OF    AGENCY.  139* 

^Promise  to  provide  for  hill. — If  one  partner,  in  cousidera-  r^<-.oq 
tion  that  a  person  will  accept  a  partnership  bill,  promises  that 
the  firm  will  put  him  in  funds  to  meet  the  bill  when  due,  this  promise 
binds  the  firm,  (it)     But  this  is  not  guaranteeing  payment  of  the  debt 
of  another  within  the  rule  above  discussed. 

16.  Insurances. — One  partner  can  bind  the  firm  by  an  insurance 
of  the  partnership  goods,  (v)  And  if  one  insures  for  all,  he  may  give 
notice  of  an  abandonment  for  all.  (a;)  22 

17.  Interest. — An  admission  by  one  partner  that  a  debt  of  the  firm 
bears  interest  at  a  given  rate  is  prima  facie  binding  on  the  firm,  (y) 

See  further,  ante,  under  the  head  "Debts.'' 

18.  Judicial  proceedings. — The  power  of  one  partner  to  act  for  the 
firm  in  legal  proceedings  will  be  noticed  hereafter,  when  treating  of 
actions  (book  II.,  c.  3,  §  1),  and  bankruptcy  (book  IV.,  c  2). 

19.  Leases. — One  partner,  as  such,  has  no  authority  to  contract  on 
behalf  of  the  firm  for  a  lease  of  a  house  for  partnership  purposes.  (2) 

Where  a  lease  is  made  by  several  partners  jointly,  a  notice  to  quit 
given  by  one  on  behalf  of  all  is  sufficient,  (a)  23 

20.  Mortgages  and  pledges,     a.   By  partners. — A   legal   mortgage 

(w)  Johnson  v.  Peck,  3  Stark.  66.  having  been  ratified   by  the  other  part- 

{v)  Hooper  v.  Liisby,  4  Camp.  66.     See  ners. 
Armitage  v.  Winterbottom,   1   Man.  &  G.        (a)  Doe  v.  Hulme,  2  Man.  &  E.  433 ; 

130.  Doe  V.  Summersett,  1  B.  &  Ad.  135 ;  Good- 

{x)  Hunt  V.  Tiie  Royal  Exchange  Assu-  title  v.  Woodward,  3  B.  &  A.  689.     See 

ranee  Co.,  5  Mau.  &  S.  47.  Right  v.  Cuthell,  5  East  491. 

22.  Insurance.  —  One    member    of    a        23.  Leases. — In  Penn  v,  Kearney  (21 

partnership  who  are  the  agents  of  an  in-  La.  Ann.  21)  it  is  held  that  a  partnership 

surance  company,  has  all  tlie  powers  of  may  be  held  jointly  liable  for   rent  of 

the  firm  in   making  a  parol   contract  of  premises  leased  to  and  in  the  name  of  one 

insurance.     Kennebeck    Co.    v.   Augusta  member   only,  on   proof  that   they  were 

Ins.,  &c.,  Co.,  6  Gray  (Mass.)  204.  hired  for  and  used  by  the  firm  ;  while,  in 

When  the  firm  is  liable  on  a  note  given  Tuttle  v.  Eskridge  (2  Munf.  (Va.)  330),  a 
by  one  partner  in  payment  of  the  pre-  lease  from  one  copartner,  sealed  with  his 
mium  of  insurance  on  property  repre-  seal,  and  in  terms  binding  himself  only, 
sented  by  him  to  be  firm  property,  whether  was  held  not  admissible  evidence  to  sup- 
such  be  the  case  or  not,  see  Osgood  v.  port  an  avowry  laying  a  demise  by  the 
Glover,  7  Daly  (N.  Y.)  367.  copartners,  notwithstanding  the  deed  was 

iy)  See  Fergusson  v.  Fyfe,  8  CI.  &  F.  expressed  as  "  for  himself  and  his  part- 

121.  ner,"  and  it  was  proved  that  the  other 

(a)  Sharp   v.   Milligan,  22  Beav.   606,  party  knew  of  the  demise  and  was  satis- 

where,  however,  specific  performance  was  fied  with  it. 
decreed   against    the    firm,  the   contract 

213 


139* 


IMPLIED   POWERS   OF   PARTNERS. 


[book  II.^ 


cannot  be  made  of  partnership  real  estate  without  the  concurrence  of 
all  the  partners.  (6) 

It  being,  however,  decided  that  a  member  of  an  o-rdinary  trading 
partnership  has  power  to  borrow  money  on  the  credit  of  the  firm,  it 
follows  almost  necessarily  that  he  should  have  power  to  pledge  part- 
nership  property  as  a  security  for  advances.  *The  writer  is  not 
-^  aware  of  any  decision  in  which  an  equitable  mortgage,  made 
by  one  partner  by  a  deposit  of  deeds  relating  to  partnership  real 
estate,  has  been  upheld,  or  the  contrary ;  he  can  therefore  only  ven- 
ture to  submit  that  such  a  mortgage  ought  to  be  held  valid  in  all  cases 
in  which  it  is  made  by  a  partner  having  an  implied  power  to  borrow 
on  the  credit  of  the  firm,  (c)  24 


(6)  See  ante,  heading  "Deed."  In 
Juggeevvundas  Keeka  Shah  v.  Kamdas 
Brijbooken  Das,  2  Moo.  In.  Ap.  437,  a 
mortgage  by  one  partner  was,  under  pecu- 
liar circumstances,  held  to  bind  the  firm. 

(c)  In  Re  Clough,  31  Ch.  D.  324,  an 
equitable  mortgage  by  a  surviving  part- 
ner for  a  partnership  debt  was  held  valid. 
See,  further.  Ex  parte  National  Bank,  14 
Eq.  507 ;  Patent  File  Co.,  6  Ch.  83 ;  Ex 
parte  Lloyd,  1  Mont.  &  A.  494.  Compare 
7  T.  R.  210,  per  Lord  Kenyon. 

24.  Mortgages  of  land. — The  rules 
relative  to  the  power  of  one  partner  to 
convey  firm  property  by  deed  (ante  p. 
*137,  note  20),  apply  here.  Thus,  a  mort- 
gage under  seal,  executed  by  one  partner 
will  bind  him,  but  not  the  firm.  Weeks  v. 
Mascoma  Rake  Co.,  58  N.  H.  101.  Such 
a  mortgage,  even  though  given  to  secure  a 
firm  debt,  contracted  within  scope  of  the 
partnership  business,  if  not  authorized  or 
ratified  by  liis  copartners,  conveys  only 
his  own  interest,  and  may  be  foreclosed 
only  to  that  extent.  Printup  v.  Turner, 
65  Ga.  71.  Contra,  see  Chittenden  v.  Ger- 
man Amer.  Batik,  27  Minn.  143.  See, 
also,  Cottle  v.  Harrold,  72  Ga.  830.  But 
a  mortgage  given  by  one  partner  on  the 
partnership  property,  under  a  power  of 
attorney  which  was  ample,  is  valid.  Sea- 
well  V.  Payne,  5  La.  Ann.  255. 


What  amounts  to  a  ratification,  see 
Stroman  v.  Varn,  19  So.  Car.  307. 

Chattel  mortgages. — One  partner  has 
authority,  without  the  consent  or  knowl- 
edge of  his  copartner,  to  mortgage  the 
whole  stock  in  trade  of  the  firm"  to  secure 
a  particular  creditor  of  the  firm.  Tapley 
V.  Butterfield,  1  Mete.  (Mass.)  515.  See 
Willett  V.  Stringer,  17  Abb.  (N.  Y.)  Pr. 
152.  Thus,  he  may  execute  a  valid  mort- 
gage of  a  vessel  owned  by  the  firm,  by 
signing  the  individual  names  of  the  mem- 
bers of  the  firm.  Patch  v.  Wheatland,  S 
Allen  (Mass.)  102.  The  fact  that  he  seals 
the  instrument,  a  seal  being  unnecessary, 
will  not  aflect  its  validity.  Woodruff  v. 
King,  47  Wis.  261 ;  Hawkins  v.  Hastings 
Bank,  1  Dill.  (U.  S.)  462;  S.  C,  4  Bankr. 
Reg.  108. 

If  the  copartner  recognizes  a  mortgage 
so  executed,  he  is  estopped  to  deny  its 
validity.  Richardson  v.  Lester,  83  111. 
55.  See,  also,  Hawkins  v.  Hastings  Bank, 
supra. 

But  one  partner  cannot  mortgage  the 
individual  property  of  his  copartner  with- 
out his  consent  or  acquiescence,  under 
such  circumstances  as  to  create  an  estop- 
pel. Gates  V.  Bennett,  33  Ark.  311 ;  Cut- 
ler V.  Hake,  47  Mich.  80. 

So,  also,  a  chattel  mortgage  of  the  stock 
of  a  firm  to  secure  a  debt  which  comes 


214 


CHAP.  I.,  §  II.J  DOCTRINES    OP    AGENCY.  140* 

Pledges  of  chattels. — The  implied  authority  of  a  partner  who  has 
power  to  borrow  to  pledge  the  personal  property  of  the  firm  for  money 
borrowed  is  beyond  dispute,  (cZ)  and  the  power  is  not  confined  to  eases 
in  which  there  is  a  general  partnership,  for  if  several  join  in  a  pur- 
chase of  goods  to  be  sold  for  tiieir  common  profit,  a  pledge  of  those 
goods  by  one  of  the  persons  interested  is  binding  on  them  all.  (e)  The 
implied  power  to  pledge,  moreover,  extends  to  pledges  for  antecedent 
debts.  (/) 

Redemption. — Any  partner  may,  on  behalf  of  tlie  firm,  redeem  a 
pledge  of  the  firm,  but  he  alone  is  not  the  proper  person  to  bring  an 
action  to  recover  the  thing  pledged,  [g) 

Factors'  acts. — A  question  of  some  importance  arises  as  to  the  effect, 
if  any,  of  the  Factors'  acts  (A)  on  the  power  of  one  partner  to  sell  and 
*pledge  the  goods  of  the  firm.  The  writer  is  not  aware  of  r=^-^^-j^ 
any  authority  upon  this  subject,  but  he  conceives  that  those 
acts  neither  extend  nor  abridge  the  power  in  question.  The  Factors' 
acts  do  not  apparently  render  valid  any  sale  or  pledge  by  one  partner 
of  partnership  goods,  which  is  not  valid,  independently  of  the  acts, 
upon  the  principles  of  the  common  law. 

b.  To  partners. — One  partner  has  implied  authority  to  accept,  in 
the  ordinary  course  of  business,  security  for  a  debt  due  to  his  firm, 

due  in  twenty-four  hours   after  its  date,  partnership    property    when    the    pledge 

and  having  the  practical  effect  of  termi-  was    made.      In    Ex    parte    Copeland,   2 

nating  the  firm  business,  if  enforced,  can-  Mont.  &  A.  177,  it  was  questioned  whether 

not  be   validly  executed  by  one  partner  a  pledge  by  one  partner  was  valid  if  the 

without  the  assent  of  the  other.     Osborne  pledgee  had  notice  that  the  pledgor  was 

V.  Barge,  29  Fed.  Rep.  725.  not  the  only  owner,  but  this,  it  is  conceived, 

(d)  See,  Ex  parte  Bonbonus,  8  Ves.  540 ;  could  only  be  material  where  the  pledge 
Butchart  v.  Dresser,  10  Hare  543,  and  4  is  not  made  for  ostensible  partnership 
De  G.,  M.  &  G.  542  ;  Brownrigg  v.  Rae,  5  purposes. 

Ex.   489;   Gordon  v.  Ellis,  7  Man.  &  G.        (/)  Patent   File   Co.,   6    Ch.    83;    Re 

607.     See,    also,    Langmead's   Trusts,    20  Clough,  31  Ch.  D.  324;  and  see  Story  on 

Beav.  20,  and  7  De  G.,  M.  &  G.  353,  and  Part ,  §  101. 

as  to  ships.  Ex  parte  Howden,  2  Mont.,  D.        (g)  See  Harper  v.  Godsell,  L.  R.,  5  Q. 

&  D.  574.  B.  422. 

(e)  Reid  v.  Hollinshead,  4  Barn.  &  C.  {h)  4  Geo.  IV.,  c.  83 ;  6  Geo.  IV.,  c.  94 ; 
867  ;  Re  Gellar,  1  Rose  297  ;  Raba  v.  Ry-  5  and  6  Vict.,  c.  39  ;  40  and  41  Vict.,  c.  39. 
land,GowN.P.  133;  Tupperv.  Haythorne,  See,  upon  them,  Navulshawi;.  Brownrigg, 
Id.  135 ;  but  see  Barton  v.  Williams,  5  B.  2  De  G.,  M.  &  G.  441 ;  Kaltenbach  v. 
&  A.  395,  p.  405,  per  Best,  J.,  and  note  Lewis,  10  App.  Cas.  617. 

that  there  the  goods   pledged    were   not 

215 


141= 


IMPLIED    POWERS   OF    PARTNERS. 


[book  n., 


and  where  one  member  of  a  firm  of  bankers  accepted  as  security  for 
money  due  to  the  bank  shares  in  a  company,  and  caused  them  to  be 
registered  in  the  name  of  tiie  bank,  it  was  held  that  he  had  implied 
authority  so  to  do,  although  the  consequence  was  that  he  thereby 
rendered  himself  and  his  copartners  liable  as  contributories  of  the 
company.  (i)25 

21.  kotioe. — Questions  frequently  arise  as  to  whether  notice  to  one 
partner  is  notice  to  all. 

General  rule. — As  a  general  rule,  notice  to  a  principal  is  notice  to 
all  his  agents,  (/>:)  and  notice  to  an  agent  of  matters  connected  with  his 
agency  is  notice  to  his  principal.  (Z)  Consequently,  as  a  general  rule, 
notice  to  one  partner  of  any  matter  relating  to  the  business  of  the 
firm  is  notice  to  all  the  other  members  ;(//i)  and  if  two  firms  have  a 
common  partner,  notice  which  is  imputable  to  one  of  the  firms  is  im- 
putable to  the  other  also,  if  it  relates  to  the  business  of  that  other.  (?i) 
'^Firm  afected  by  its  agenfs  knoioledge. — In  conformity 
-^    with  these  principles,  if  a  firm  claims  the  benefit  of  a  trans- 


(n  Weikersheim's  Case,  8  Ch.  831. 

25.  Pledges. — So,  also,  one  partner  may, 
by  way  of  pledge,  without  the  consent  or 
even  knowledge  of  his  copartner,  assign 
directly  to  a  creditor  a  part  or  the  whole 
of  the  partnership  property  to  secure  a 
firm  debt  existing  or  about   to   be  con- 
tracted.    Mabbett  v.  White,  12  N.  Y.  442 
Harrison  v.  Sterry,  5  Cranch  (U.  S.)  289 
Deming   v.  Colt,   3   Sandf.   (N.  Y.)  290 
Hodges  V.  Harris,  6   Pick.   (Mass.)  360 
TapleyiJ.  Butterfield,  1  Mete.  (Mass.)  515 
Egberts  v.  Woods,  3  Paige  (N.  Y.)  517 
CuUom  V.  Bloodgood,  15  Ala.  34;  McCol 
iough  V.  Somraerville,  8  Leigh  (Va.)  415 
Ormsbee  v.  Davis,  5  R.  I.  443 ;  Russel  v. 
Leland,  12  Allen  (Mass.)  349.     But  one 
partner  has   no  authority  to  agree   that 
private    property   of   the   other   partner, 
pledged  by  him  for  a  firm  debt,  shall  also 
stand   as   security    for   further    advances. 
Beardsley  v.  Tnttle,  11  Wis.  74.    See,  also, 
generally,  Miller  (•.  Sullivan,  1  Cin.  (O.) 
271. 

(k)  See  Mayhew  v.  Eames,  1  Car.  <k  P. 


550,  and  3  Barn.  &  C.  601 ;  Willis  v.  The 
Bank  of  England,  4  Ad.  &  E.  21. 

(/)  Dresser  v.  Norwood,  17  C.  B.  (N.  S.) 
466 ;  reversing  the  decinion  below,  14  C. 
B.  ( N.  S.)  574.  Per  Ashhurst,  J.,  Fitzher- 
bert  V.  Mather,  1  T.  R.  16;  Le  Neve  v. 
Le  Neve,  1  Ves.  &  S.  64 ;  Collinson  v. 
Lister,  7  De  G.,  M.  &  G.  634,  and  20  Beav. 
356.  See,  generally,  on  this  maxim,  Black- 
burn, Low  &  Co.  V.  Vigors,  17  Q.  B.  D. 
553.  Whether  a  principal  is  afiected  by 
notice  acquired  by  the  agent,  but  not  in 
that  character,  is  perhaps  scarcely  yet 
settled.  Dresser  v.  Norwood  is  a  strong 
authority  that  in  commercial  transactions 
he  is. 

(m)  Alderson  i-.  Popo,  1  Camp.  404; 
Porthouse  v.  Parker,  Id.  82;  Bignold  v. 
Waterhouse,  1  Mau.  &  S.  259  ;  and  see 
Salomons  v  Nissen,  2  T.  R.  647. 

(re)  See  Steele  v.  Stuart,  2  Eq.  84  ;  Port- 
house  V.  Parker,  1  Camp.  82 ;  Worcester 
Corn  Exch.  Co.,  3  De  G.,  M.  &  G.  180 ; 
Jacaud  v.  French,  12  East  317  ;  Powles  v. 
Page,  3  C.  B.  16. 


216 


CHAP.  I.,  §  II.]  DOCTRINES    OF    AGENCY.  142* 

action  entered  into  by  one  of  its  members,  it  cannot  effectually  set  up 
its  own  ignorance  of  what  that  member  knew,  so  as  to  be  in  a  better 
position  than  he  himself  would  have  been  in  had  he  been  dealing  on 
his  own  account  as  a  principal,  (o)  Thus,  in  Collinson  v.  Lister,  (/>)  it 
was  held  that  a  banking  company  was  not  entitled  to  the  benefit  of  a 
mortgage  given  to  it  by  its  own  manager,  in  his  character  of  an  execu- 
tor. For  the  mortgage  was  given  as  a  security  for  money  borrowed 
by  the  manager  as  executor,  and  advanced  by  himself  as  manager  for 
improper  purposes,  and  in  breach  of  the  trusts  which,  as  executor, 
he  had  to  perform ;  and  the  company,  in  taking  the  mortgage,  knew 
that  their  manager  was  giving  a  security  on  his  testator's  estate  for 
money  previously  taken  by  him  from  the  funds  of  the  company,  and 
which  moneys  he  had  been  requested  to  replace  or  give  security  for. 
Under  these  circumstances,  it  was  treated  as  clear  that  the  bank  could 
stand  in  no  better  position  than  the  manager  would  have  done  had  he 
advanced  the  money  himself  and  taken  a  mortgage  for  it  from  himself. 

Meaning  of  phrase  "Notice  to  one  is  notice  to  alV — When  it  is 
said  that  notice  to  one  partner  is  notice  to  all,  what  is  meant  is  (1) 
that  a  firm  cannot,  in  its  character  of  principal,  set  up  the  ignorance 
of  some  of  its  members  against  the  knowledge  of  others  of  whose 
acts  it  claims  the  benefit,  or  by  whose  acts  it  is  bound  ;  and  (2)  that 
when  it  is  necessa^ry  to  prove  that  a  firm  had  notice,  all  that  need  be 
done  is  to  show  that  notice  was  given  to  one  of  its  members  as  the 
agent  and  on  behalf  of  the  firm.  The  expression  means  no  more 
than  this,  and  although  every  person  has  notice  of  what  he  himself 
■does,  it  would  be  absurd  to  hold  that  a  firm  has  notice  of  everything 
done  by  each  of  its  members.  Where  one  member  is  acting  beyond 
his  powers,  or  is  committing  a  fraud  on  his  copartners,  or  is  the  per- 
son whose  duty  it  is  to  give  his  firm  notice  of  what  he  himself  has 
-done,  in  all  such  cases  notice  on  his  part  is  not  equivalent  to  notice 
by  them.(g') 

*In  Bignold  v.  Waterhouse  (r)  oiie  of  a  firm  of  carriers   r^,_,o 
entered  into  an  agreement  to  carry  valuable  parcels  free  of 
charge,  but  under  such  circumstances  as  to  rdnder  the  agreement  not 

(o)  Seean<ep.*116,  and  the  cases  below,  in  Williamson  v.  Barbour,  9  Ch.  D.  535, 

(p)  7  De  G.,  M.  &  G.  634,  and  20  Beav.  et  seq. 
356.  (r)  1  Mau.  &  S.  255. 

(5)  See  the  judgment  of  Jessel.,  M.  R., 

217 


143*  IMPIJED    POWERS    OF    PARTNERS.  [bOOK    II., 

binding  on  the  other  partners.  A  parcel,  known  to  the  partner  who 
made  the  agreement  to  be  of  value,  was  sent,  but  was  not  entered  or 
paid  for  as  a  valuable  parcel.  The  other  partners  were  held  to  be 
unaffected  with  the  notice  which  their  copartner  had  of  the  nature 
of  the  parcel,  and  were  held  not  to  be  liable  for  its  loss. 

Breaches  of  trust. — So,  if  one  partner  is  a  trustee  and  he  improperly 
employs  the  trust  funds  in  the  partnership  business,  his  knowledge 
tlut  he  is  so  doing  is  not  imputable  to  the  firm,  and  therefore,  to 
affect  the  other  partners  with  a  breach  of  trust,  further  evidence  must 
be  adduced,  (s) 

Notice  to  clerks. — Moreover,  in  cases  of  this  kind,  notice  on  the 
part  of  the  clerks  of  the  firm  of  what  the  fraudulent  partner  is  doing 
is  no  more  than  notice  to  him ;  it  is  not  sufficient  to  aifect  his  copart- 
ners. (0  26 

Ratification. — These  cases  show  what  indeed  is  obvious  of  itself, 
viz.,  that  if  a  partner  exceeds  his  authority,  and  it  is  contended  that 
the  firm  is  bound  by  what  he  has  done,  on  the  ground  that  it  has 
ratified  his  acts,  evidence  must  be  given  to  prove  that  at  the  time  of 
the  alleged  ratification  his  copartners  knew  of  those  acts.  It  would 
be  absurd  if,  in  such  a  case,  knowledge  by  him  was  equivalent  to 
knowledge  by  them,  (u)  27 

(s)  See  Ex  parte  Heaton,  Buck  386.  Chip.  (Vt.)  315. 

(<)  See  Lacey  v.  Hill,  4  Ch.  D.  537,        So,  where  a  transfer  of  a  note  is  made 

and  Williamson  v.  Barbour,  9  Ch.  D.  536.  to   a   firm   one  of  whose    members    is   a 

26.  Notice  to  one  partner.— The  gen-  trustee  of  the  company  owning  the  note, 
eral  rule  is  that  notice  to  one  partner,  in  the  firm  has  constructive  notice  of  want 
reference  to  a  partnership  transaction,  is  of  authority  in  the  company  to  make  the 
notice  to  all  the  partners.  Fitch  v.  Stamps,  transfer.  Smith  v.  Hall,  5  Bosw.  (X.  Y.) 
7  Miss.  (6  How.)  487.  Thus,  notice  to  319.  And  where  a  bill  is  drawn  by  one 
one  of  the  copartners,  who  have  separately  and  accepted  by  the  other,  of  two  firms, 
signed  articles  of  submission  to  arbitra-  having  one  common  partner,  formal  no- 
tion, is  notice  to  the  firm.  Haywood  v.  tice  of  protest  to  the  acceptors  is  not  neces- 
Harmon,  17  111.  477.  And  where  prop-  sary.  Woodbury  v.  Sackrider,  2  Abb  (N. 
erty  is  purchased  by  a  partnersiiip,  notice  Y.)  Pr.  402. 

to  one  is  notice  to  all  the  partners;  yet.        But    notice   to   a  firm  cannot   affect  a 

if  one  of  two  persons,  about  entering  into  member  thereof  in  his  individual  rights 

partnership,    purchase   of   the    other    an  or  interests  disconnected  with  those  of  the 

undivided  interest  in  property  owned  by  firm.     Boling  v.  Anderson,  60  Tenn.  551. 

him,  to  be  held  by  the  two  for  the  use  of  See,  also,  Aultman  &  Taylor  Co.  v.  Web- 

the  firm,  this  principle,  as  to  notice,  does  ber,  4  111.  App.  427. 
not  apply.     Herbert  v.  Odlin,  40  N.  H.        (u)  See  ace.  the  last  note. 
267.     See,  also,  Barney  v.  Currier,  1   D.        27.  Ratification.— When   one   of   two 

218 


CHAP. 


I.,  §  11.] 


DOCTRINES    OF    AGENCY. 


143* 


A  retired  partner  is  not  aifected  with  notice  on   the  part  of  the 
continuing  partners  of  what  has  occurred  since  the  partnership,  if  the 


partners  receives  money  on  an  executory  towards  his  expense  in  that  business,  with 
contractand  the  other  partnersubsequently  knowledge  of  its  nature,  that  amounts  to 
ratifies  the  contract,  both  are  liable,  if  the  a  ratification,  and  binds  him  equally  with 
contract  is  not  fulfilled,  though  the  money  the  other  member  of  the  firm  for  the  pay- 
may  have  been  paid  over  from  one  partner  ment  of  the  attorney's  fees  in  that  busi- 
to  the  other.  Lawrence  v.  Taylor,  5  Hill  ness.  Holmes  v.  Kortlander,  31  N.  W. 
(N.  Y.)  107.     So,  a  promissory  note  exe-  Kep.  (Mich.)  532. 

cuted  by  one  partner  after  dissolution,  if  Where  a  member  of  a  firm  drew  a  check 
ratified  by  the  other,  will  be  binding  in  the  firm  name,  in  favor  of  a  bank  to 
upon  the  firm.  Carter  v.  Pomeroy,  30  which  he  was  individually  indebted,  and 
Ind.  438.  the  other  members,  within  a  month,  had 
What  amounts  to  ratification. — To  knowledge  of  the  misapplication  of  the 
constitute  a  ratification,  by  one  partner,  of  check  to  his  private  account,  but  omitted 
the  independent  act  of  the  other,  e.  g.,  the  to  repudiate  the  act  till  four  years  after- 
use,  after  dissolution,  of  the  firm  name,  in  ward,  when  the  firm  brought  suit  for  the 
the  renewal  of  a  partnership  note,  there  money,  such  omission  was  held  tobetanta- 
miist  be  some  act  on  the  part  of  the  non-  mount  to  a  ratification,  and  to  bar  recov- 
acting  partner  fairly  implying  a  willing-  ery.  Marine  Co.  ?'.  Carver,  42  111.  66.  See, 
ness  to  affirm  what  has  been  done.  Hat-  also,  Waterman  v.  Dutton,  6  Wis.  265. 
ton  V.  Stewart,  2  Lea  (Tenn.)  233.  The  Where  a  partner  said  he  would  settle  a 
endorsing  on  a  note  guaranteed  by  one  note  which  was  signed  in  the  firm  name, 
partner  in  the  firm  name,  of  a  waiver  of  but  which  was  not  given  for  partnership 
notice,  protest.  &c.,  for  the  purpose  of  sav-  purposes,  "  if  he  could  get  the  books,  notes 
ing  expense,  cannot  be  considered  a  rati-  and  accounts  from  "  the  partner  who 
fication  or  adoption  of  the  unauthorized  signed  the  note,  it  was  held  that  he  did 
act  of  the  partner  in  making  such  guar-  not  become  liable  on  the  note,  especially 
anty ;  nor  is  the  failure  to  make  prompt  as  the  condition  of  this  promise  never 
denial  of  firm  liability,  on  such  note  being  happened.  Burleigh  v.  Parton,  21  Tex. 
presented  for  payment,  sufficient  to  estab-  585. 

lish  a  ratification  or  admission  of  liability.        Knowledge  and  silence,  when  a  rati- 

Marsh  v.  Thompson  Nat.  Bank,  2  Bradw.  fication.— To  remain  silent,  after  discov- 

(111.)   217.     But   the   reception  of  goods  ering  that  one  partner  has  used   the  firm 

purchased  without  authority  for  persons  name  for  purposes  outside  the  firm  busi- 

about  to  enter  into  partnership,  in  their  ness,  is  evidence  of  assent,  prior  or  subse- 

name  and  on  their  credit  as  partners,  and  quent,  but  not  conclusive  as  matter  of  law. 

their  disposal  of  them  for  their  own  pur-  Ferguson  v.  Gordon,  1  Sneed  (Tenn.)  254. 


poses,  after  being  informed  as  to  how  the 
goods  were  purchased,  is  a  ratification. 
Pike  V.  Douglass,  28  Ark.  59.  And  where 
it  is  shown  that  one  member  of  a  firm  em- 


Although  the  engagement  of  an  indi- 
vidual member  of  a  firm  may  not  be 
within  the  scope  of  the  partnership  deal- 
ings, yet  if  the  transaction  come  within 


ployed  an  attorney  in  a  matter  not  strictly  the  knowledge  of  his  copartners,  and  if 

partnership  business,  but  doue  in  the  in-  assented  to  by  them,  then  it  will  be  oblig- 

terest  of  the  firm,  and  it  is  also  shown  that  atory  upon  the  concern.    McNeill  v.  Rey- 

his  copartner   paid    the  attorney  money  nolds,  9  Ala.  313. 

219 


143^ 


IMPLIED    POWKRS    OF    PARTNERS. 


[book    II., 


agency  subsisting  between  them  has  been  dissolved,  (a;)  Nor  is  an 
incoming  partner  aiFected  witli  notice  of  what  occurred  before  he 
joined  the  firm.(^) 

22.  Payments. — See  ante,  under  the  head  ''Debts.'' 

23.  Penalties. — One  partner  may  bind  the  firm  under  a  *penalty 
to  observ^e  a  contract  which  he  is  authorized  to  enter  into  on 


*144] 


its  behalf  (z) 


Upon  trial  of  a  case  involving  the  ex- 
tent of  a  water  privilege  claimed  by  co- 
partners nnder  an  alleged  appropriation, 
their  notice  of  location,  shown  to  have 
been  j)repared  with  the  knowledge  of 
some  of  thera,  and  seen  by  them  as  a 
posted  notice,  and  to  have  been  so  posted 
that  it  "  must  have  been  seen "  by  the 
others,  was  held  admissible  in  evidence  as 
.part  of  the  res  gestae.  McKinney  v.  Smith, 
21  Cal.  374. 

Where  a  member  of  a  partnership  had 
endorsed  his  own  note  with  the  name  of 
the  firm,  for  his  own  exclusive  benefit, 
without  authority  from  the  other  copart- 
ner, and  the  endorsee  took  the  note  with 
full  knowledge  of  the  facts,  it  was  held 
that  no  independent  consideration  was 
required  to  support  a  subsequent  ratifica- 
tion and  promise,  by  the  second  copartner, 
to  pay  the  note.  Commercial  Bank  v. 
Warren,  15  N.  Y.  577. 

Thus,  where  a  note  was  given  by  one 
partner  for  money  used  by  the  firm  in  its 
business,  and  the  amount  thereof  was  en- 
tered in  the  firm  books  as  an  indebtedness 
of  the  firm,  which  books  were  examined 
from  time  to  time  by  a  partner  denying 
the  execution  of  a  note  by  him — Held, 
that  if  he  was  informed  of  the  making  of 
the  note,  and  made  no  objection,  he  was 
estopped  from  denying  its  validity.  Kit- 
ner  v.  Whitlock,  88  111.  513. 

But  the  mere  fact  that  the  other  mem- 
bers of  the  firm  have  knowledge  that  one 
partner  has  given  a  firm  note,  will  not  be 
construed  to  impute  to  them  knowledge 
that  the  note  was  a  fraud  upon  them,  and 


until  such  knowledge  of  the  fraud  has 
been  brought  home  to  them,  the  firm  can- 
not be  held  to  have  ratified  the  transac- 
tion. Hayes  v.  Baxter,  65  Barb.  (N.  Y.) 
181. 

Nor  does  the  mere  fact  that  one  partner, 
on  being  informed  that  the  other  partner 
has  given  a  firm  note  for  his  individual 
debt,  does  not  deny  his  liability  thereon, 
amount,  per  se,  to  a  ratification  or  adop- 
tion of  the  note,  though  it  may  be  a  cir- 
cumstance tending  to  show  assent.  Reu- 
bin  V.  Cohen,  48  Cal.  545. 

Where  one  partner  of  a  firm,  without 
the  knowledge  or  assent  of  the  other, 
subscribed  for  certain  stock  in  the  firm 
name,  the  omission  of  the  other  partner 
to  express  his  dissent  to  such  subscription, 
when  demand  of  payment  for  the  stock 
was  made  of  the  firm,  does  not  make  him 
a  stockholder  or  render  him  liable  to  pay 
for  stock  so  subscribed  for.  Barnard  v. 
Lapeer,  6  Mich.  274. 

Ratification,  how  proved. — Ratifica- 
tion of  a  partner's  authority  to  bind  the 
firm  as  sureties  upon  a  note,  may  be 
proved  by  circumstantial  evidence  (First 
Nat.  Bank  v.  Breese,  39  Iowa  640) ;  and 
it  is  the  province  of  the  jury  to  judge  of 
the  extent  of  it,  and  error  for  the  court  to 
rule  upon  the  point  as  a  question  of  law. 
Noble  V.  M'Clintock,  2  Watts  &  S.  (Pa.) 
152. 

[x)  Adams  v.  Bingley,  1  Mees.  &  W. 
192. 

(y)  See  per  Jessel,  M.  R.,  in  William- 
son V.  Barbour,  9  Ch.  D.  536. 

(z)  Beckham  v.  Drake,  9  Mees.  &  W.79. 


220 


CHAP.  I.,  §  II.]  DOCTRINES   OF    AGENCY.  144* 

24.  Purchases. — It  has  been  long  decided  that  every  member  of  an 
ordinary  trading  partnership  has  implied  power  to  purchase  on  the 
credit  of  the  firm  such  goods  as  are  or  may  be  necessary  for  carrying 
on  its  business  in  the  usual  way.  (a)  This  cannot  be  more  strongly 
exemplified  than  by  the  case  of  Bond  v.  Gibson.  (6)  There  two  per- 
sons carried  on  business  as  harness  makers.  One  of  them  bought,  on 
the  credit  of  the  firm,  a  number  of  bits  to  be  made  up  into  bridles,  but 
instead  of  using  the  bits  for  the  partnership  business,  he  pawned  them 
for  his  own  use.  The  seller  of  the  bits  was  nevertheless  held  entitled 
to  recover  their  price  in  an  action  against  both  partners. 

Goods  supplied  to  one  partner. — The  firm  is  liable,  although  the 
goods  may  have  been  supplied  to  one  only  of  the  partners,  and  no 
other  person  may  have  been  known  to  the  supplier  as  belonging  to 
the  firm,  (c)  But,  as  will  be  seeji  hereafter,  the  firm  is  not  liable  for 
goods  ordered  by  and  supjjlied  to  one  partner,  and  which  it  was  his 
duty  to  contribute  to  the  joint  stock  of  the  firm.(cZ) 

Non-trading  partnerships. — The  power  of  one  partner  to  bind  the 
firm  by  a  purchase  of  goods  on  its  credit  is  not  confined  to  trading 
partnerships.  Thus,  where  some  printers  and  publishers  agreed  to 
share  the  profits  of  a  work,  and  the  publishers  ordered  paper  for  that 
particular  work  and  became  bankrupt,  the  printers  were  held  liable 
for  its  price  to  the  stationers  who  supplied  it.  (e)  It  is  of  no  conse- 
quence what  the  partnership  business  may  be,  if  the  goods  supplied 
are  necessary  for  its  transaction  in  the  ordinary  way. 

Return  of  goods. — If  goods  are  sold  to  a  firm  on  credit  and  are 
delivered  to  the  firm,  and  then  one  partner  returns  them,  the  firm  not 
being  able  to  pay  for  them,  the  property  will  be  vested  in  the  vendor, 
*subject,  in  the  event  of  bankruptcy,  to  the  question  of  fraudu- 
lent  preference.  (/)  28 

(a)  Hyatt  v.  Plare,  Comb.  383.  (/)  De  Tastet  v.  Carroll,  1  Stark.  88. 

(6)  1  Camp.  185.  28.  Purchases  by  one  partner,  gen- 

(c)  Kuppell  V.  Koberts,  4  Nev.  &  M.  31 ;  erally. — The  general  rule  is  that  partners 
City  of  London  Gas  Co.  v.  Nicholls,  2  Car.  are  all  liable  for  goods  furnished  for  the 
&  P.  365  ;  Gardiner  v.  Childs,  8  Id.  345.  use  of  the  firm,  though  the  vendor  sup- 

(d)  See  book  II.,  ch.  2,  §  3.  Greenslade  posed  himself  dealing  with,  and  giving 
V.  Dower,  7  Barn.  &  C.  635,  and  cases  of  credit  to,  an  individual  partner,  not  know- 
that  class.  ing  of  the  existence  of  the  firm.    Keynolds 

(e)  Gardiner  v.  Childs,  8  Car.  &  P.  345;  v.  Cleveland,  4  Cow.  (N.  Y.)  282  ;  Roth  v. 
compare  Wilson  v.  Whitehead,  10  Mees.  Moore,  19  La.  Ann.  86  ;  Bracken  d.  March, 
&  W.  503.  4  Mo.  74 ;  Tucker  v.  Peaslee,  36  N.  H.  167 ; 

221 


14o^ 


IMPLIED    POWERS    OF    PARTNERS. 


[book    II., 


25.  Rece'iptH. — See,  ante,  under  the  head  "Debts." 

26.  Releases  and  covenants  not  to  sue. — A  covenant  by  one  partner 
not  to  sue  for  a  jiartnership  debt  does  not  amount  to  a  release  of  that 


Baxter  t;.  Clark,  4  Ired.  (N.  C.)  L.  127  ; 
Given  v.  Albert,  5  Watts  &  S.  (Pa.)  333 ; 
Bisel  V.  Hobbs,  6  Blackf.  (Ind.)  479; 
Griffith  V.  Buffum,  22  Vt.  181.  But,  see 
Watt  V.  Kirby,  15  111.  200;  Sinklen  v. 
Lambert,  5  Phil.  (Pa.)  36. 

Partners  in  purchases  are  affected  by 
the  knowledge  of  either  of  thena,  and  the 
interest  of  both  must  share  the  same  fate. 
Sanders  v.  Kuddle,  2  T.  B.  Mon.  (Ky.) 
139. 

If  tliere  be  an  agreement  of  partner- 
ship, common  or  special,  for  the  purpose 
of  pnrcliasing  property  at  certain  sales, 
all  the  purchases  made  at  such  sales  by 
either  of  the  partners  will  be  considered 
as  made  on  the  partnership  account, 
although  the  advances  by  one  exceed  those 
of  the  other.  Taylor  v.  Taylor,  2  Murph. 
(N.  C.)  70. 

When  a  partnership  have  entered  a 
credit  for  an  article  bought  by  one  partner 
in  his  private  capacity,  the  vendor  has  a 
right  to  look  to  the  partnership  for  pay- 
ment.    Dishon  v.  Schorr,  19  III.  59. 

If  a  partner  purchase  goods  in  the 
name  of  the  firm,  although  he  applies 
them  to  his  individual  use,  the  partner- 
ship is  liable  for  the  price  to  the  vendor. 
Dickson  v.  Alexander,  7  Ired.  (N.  C.)  L.  4 ; 
Venable  v.  Levick,  2  Head  (Tenn.)  351. 

Where  goods  are  sold  to  a  firm  with  the 
understanding  that  they  are  to  be  paid  for 
in  gold  coin,  and  on  the  day  after  suit  is 
commenced  for  the  price  of  the  goods  such 
understanding  is  reduced  to  writing  and 
signed  by  one  of  the  partners  in  the  name 
of  the  firm,  and  the  complaint  brings  the 
case  within  the  Specific  Contract  act,  judg- 
ment should  be  rendered  payable  in  gold 
coin.     Meyer  v.  Kohn,  29  Cal.  278. 

Authority  to  a  firm  to  receive  goods  is 
not  extended  to  a  new  firm,  formed  after 


dissolution  of  the  original  one  from  a  part 
of  the  meml)ers  thereof.  Angle  v.  Missis- 
sippi, &c.,  R.  R.  Co.,  9  Iowa  487. 

In  a  suit  against  partners  in  a  distillery 
and  in  the  purchase  of  corn,  the  plaintiff 
may  give  in  evidence  the  receipt  of  one 
of  the  defendants,  acknowledging  the  de- 
livery of  a  certain  quantity  of  corn  to  him 
by  the  plaintiff.  Bisel  v.  Hobbs,  6  Blackf. 
(Ind.)  479. 

A  partnership  is  liable  for  lumber  pur- 
chased by  and  charged  to  one  of  the  part- 
ners, where  it  was  purchased  for  partner- 
ship purposes.  Braches  v.  Anderson,  14 
Mo.  441.  See,  also.  Mead  v.  Shepard,  54 
Barb.  (N.  Y.)  474;  Haskinson  v.  Eliot, 
62  Pa.  St.  393. 

Wherever  the  original  credit  was  given 
to  the  partnership,  that  will  constitute  a 
debt  against  the  partnership,  notwith- 
standing the  partner  contracting  the  debt 
may  have  given  his  own  separate 
security,  or  made  himself  personally 
liable  therefor.  Barcroft  v.  Snodgrass,  1 
Coldw.  (Tenn.)  430. 

A  copartner  may  contract  on  his  own 
account,  and  make  himself  alone  liable 
for  merchandise  bought  for  the  copart- 
nership account,  if  the  vendor  choose  to 
accept  him.  Sylvester  v.  Smith,  9  Mass. 
119. 

In  assumpsit  against  partners,  under  the 
common  counts,  proof  of  a  promise  by  one 
in  the  name  of  the  firm  is  not  sufficient ; 
there  must  be  proof  of  a  joint  promise,  or 
of  the  existence  of  the  partnership. 
Findlay  v.  Stevenson,  3  Stew.  (Ala.)  48. 

A  demand  of  payment  of,  and  refusal 
by  one  partner,  for  goods  furnished  to  the 
firm,  binds  the  other.  Holbrook  v. 
Wight,  24  Wend.  (N.  Y.)  169,  178. 

In  an  action  upon  a  guaranty  of  pay- 
ment of  a  note  for  the  purchase  money  of 


222 


DOCTRINES    OF    AGENCY. 


145^ 


CHAP.  I.,  §  II.] 

debt  by  the  firm,  [g)  although  a  covenant  by  all  the  partners  not  to 
sue  would  be  equivalent  to  a  release,  (A)  and  a  release  by  one  partner 
operates  as  a  release  by  the  firm,  [i) 


a  steamboat,  involving  the  question  of  de- 
livery— Held,  that  a  transfer  by  bill  of 
sale  and  delivery  to  only  one  member  of 
a  firm,  was  to  the  firm,  and  not  to  the  in- 
dividual— the  evidence  showing  that  it 
was  in  accordance  with  and  fulfillment  of 
the  original  contract  of  purchase  made  by 
both  members  of  the  firm.  Byington  v. 
Gaflf,  44  111.  510. 

Goods  not  dealt  in  by  the  firm. — 
When  one  partner  purchases  goods  not 
connected  with  the  known  business  of  the 
firm,  altliough  in  the  firm  name,  such 
purchases  will  not  bind  the  firm  in  the 
absence  of  an  express  or  implied  authority, 
or  a  subsequent  ratification.  Bankhead  v. 
Alloway,  6  Coldw.  (Tenn.)  56.  But  though 
tiie  purchase  is  one  outside  of  the  firm's 
ordinary  operations,  yet  if  made  for  its 
benefit  and  brought  to  the  knowledge  of 
the  other  partner,  who  does  not  repudiate 
it,  but  promises  to  pay  the  note  given  in 
the  firm  name  for  the  price,  he  will  be 
bound ;  and  this  without  the  written  memo- 
randum required  in  the  case  of  a  promise 
to  pay  the  debt  of  a  third  person.  Suc- 
cession of  Arick,  22  La.  Ann.  501. 

Purchases  of  real  estate. — A  large 
number  of  persons  associated  together  by 
agreement  in  writing,  for  the  purpose  of 
trade,  to  be  conducted  by  the  direction  of 
a  board  of  managers,  a  part  of  whose  duty 
was  "to  provide  a  store  for  the  company." 
Held,  that  the  managers  had  power  to 
purchase  a  store  and  land  whereon  to 
place  it,  and  to  give  the  notes  of  the  com- 
pany to  secure  the  payment  of  the  con- 
sideration. Beaman  v.  Whitney,  20  Me. 
413. 

One  of   two   partners   purchased  land, 


and  gave  a  note  for  the  consideration  in 
the  partnersliip  name,  taking  a  deed  run- 
ning to  both,  but  without  the  knowledge 
or  assent  of  the  other  partner.  Tlie  trans- 
action was  wholly  out  of  the  line  of  the 
business  of  the  partnersliip,  and  known  to 
be  so  by  the  payees.  Afterwards,  both 
partners  joined  in  a  bond  to  convey  the 
same  land,  the  partner  not  assenting  to 
the  said  conveyance,  disclaiming  in  the 
bond  any  interest  in  the  land,  and  declar- 
ing the  execution  of  the  bond  to  be  for  the 
benefit  of  his  copartner,  and  that  he  would 
receive  none  of  the  profits  arising  from 
the  transaction.  Held,  that  he  had  so 
confirmed  the  doings  of  his  partner  as  to 
be  holden  on  the  note.  Dudley  v.  Little- 
field,  21  Me.  418.  See,  also,  Davis  v.  Cook, 
14  Nev.  265. 

Purchases  in  violation  of  stipula- 
tions in  partnership  articles. — While 
goods  are  bought  by  one  partner  in  viola- 
tion of  the  articles,  yet,  if  they  come  to, 
and  are  used  by,  the  partnership,  the  firm 
is  liable.  Johnson  v.  Bernheim,  76  N.  C. 
139. 

Thus,  where  the  managing  partner  buys 
goods  on  time,  when  he  ought,  according 
to  the  partnership  articles,  to  have  bought 
for  cash,  the  firm  and  each  member  there- 
of (out  of  his  individual  estate)  is  liable 
for  the  debt,  even  though  the  seller  had 
knowledge  of  the  stipulation  against  cred- 
it; and  this  whether  the  partner  sought 
to  be  charged  derived  any  individual  ad- 
vantage from  the  enterprise  or  not.  John- 
son V.  Bernheim,  86  N.  C.  339. 

Selling  to  one  who  is  a  partner  in  two 
firms. — K.  and  M.  were  partners  in  the 
hotel  business ;  K.  and  P.  were  partners 


{g)  Walmsleyt).  Cooper,  11  Ad.&  E.  216.        (i)  2  Ro.  Ab., "  Release,"  410,  D;  Hawk- 
(h)  Deux  V.  JefTeries,  Cro.  Eliz.  352.        shaw  v.  Parkins,  2  Swanst,  539. 

223 


145^ 


IMPLIED    POWERS    OF   PARTNERS. 


[book    II., 


Setting  aside  bona  fide  releases  by  one  partner. — This  last  proposi- 
tion, viz.,  that  a  release  by  one  partner  is,  in  point  of  law,  a  release 
l)v  all  is  strono-ly  illustrated  by  those  cases  in  which  attempts  have 
been  unsuccessfully  made  by  one  partner  to  set  aside  a  release  given 
by  a  copartner  without  his  consent. 

In  Furnival  v.  Weston  (/:)  the  members  of  a  firm  sued  the  defendant 
for  a  libel  on  the  firm  published  by  him.  One  of  the  partners,  with- 
out the  consent  of  the  others,  released  the  defendant,  and  there  being 
no  fraud  in  the  case,  the  court  refused  to  set  the  release  aside.  In 
Arton  V.  Booth  (/)  the  two  plaintiffs,  Arton  and  Dawson,  had  been 
partners,  but  they  had  dissolved  partnership,  and  it  was  agreed  be- 
tween them  that  Arton  should  get  in  the  debts  of  the  firm,  and  that 


in  the  grocery  business;  it  was  doubtful 
whether  either  had  a  well-settled  firm 
name,  and  there  was  evidence  that  each 
sometimes  used  and  recognized  the  name 
of  K.  &  Co.  Held,  tliat  one  selling  goods 
to  K.,  and  taking  reasonable  care  to  as- 
certain for  which  firm  K.  was  dealing,  and 
believing  that  firm  to  be  K.  and  M.,  and 
the  goods  being  adapted  to  the  business 
of  that  firm,  could  hold  that  firm  for  the 
price  of  the  goods.  Baker  v.  Nappier,  19 
Ga.  520. 

Notice  not  to  sell  to  partner  making 
the  purchase. — A  sale  of  goods  on  credit 
to  one  partner,  in  the  course  of  the  busi- 
ness of  the  partnership,  is  a  sale  to  the 
firm,  unless  it  be  made  contrary  to  an  ex- 
press notice  by  the  other  partner  not  to 
trust  the  firm  on  his  account,  in  which 
case  he  alone  will  be  liable  who  made  the 
purchase,  and  an  action  to  recover  the 
price  cannot  be  maintained  against  the 
firm.  Feigley  v.  Sponeberger,  5  Watts  & 
S.  (Pa.)  567. 

Furnishing  goods  to  third  person  on 
request  of  one  partner. — In  Pinckney  v. 
Keyler  (4  E.  D.  Smith  (N.  Y.)  469)  it  is 
held  that  to  bind  a  partnership  to  the 
payment  for  goods  delivered  to  third  per- 
sons it  is  not  enough  to  show  that  one  of 
the  partners  requested  the  furnishing  of 


the  goods  to  such  third  persons.  But  in 
Cameron  v.  Blackman  (39  Mich.  108)  it 
is  said  that  judicial  notice  is  taken  of  the 
mercantile  custom  of  mutual  credits  under 
which  business  establishments  furnish  each 
other's  clerks  or  customers  with  goods  and 
charge  them  to  each  other.  It  is  within 
the  authority  of  the  managing  partner  to 
authorize  such  dealings,  and  when  so  au- 
thorized they  are  binding  until  notice  to 
the  contrary. 

Wliere  one  who  boarded  hands  in  the 
employ  of  a  partnership  was  authorized  by 
a  partner  to  take  up  goods  on  account  of 
the  firm,  for  his  family  use  in  that  busi- 
ness, and,  on  his  representation  to  that 
effect,  goods  were  furnished  him  on  the 
credit  of  the  firm,  though,  for  convenience 
merely,  charged  in  the  first  instance  to 
him,  and  afterwards  transferred  to  the  ac- 
count of  the  firm — Held,  that  the  firm  was 
liable  therefor,  and  that  he  was  a  compe-. 
tent  witness  for  the  plaintiffs,  to  show  the 
liability ;  a  fortiori  if  he  were  a  partner  as 
well  as  an  agent.  Scott  v.  Shepherd,  3  Vt. 
104. 

{k)  7  Moore  356. 

(/)  4  Moore  1 92.  See,  too,  Jones  v.  Her- 
bert, 7  Taunt.  421,  and  compare  Barkers. 
Kiciiardson,  1  You.  &  J.  362,  stated  lower 
down. 


224 


CHAP.  I.,  §  II.]  DOCTRINES    OF   AGENCY.  145* 

Dawsou  should  not  interfere  with  him.  Tlie  defendant  was  sued  for 
a  debt  owing  to  the  plaintiffs,  and  after  action  brought  Dawson  re- 
leased him  on  receiving  payment.  Although  the  release  deprived  the 
plaintiffs  of  their  costs,  the  court  would  not  interfere,  as  no  case  of 
fraud  was  made  out.  So,  in  Phillips  v.  Clagett,  (m)  where  partners 
brought  an  action  against  the  defendant  for  illegally  pledging  their 
property,  the  court  gave  him  leave  to  plead  a  release  previously  given 
by  one  of  the  partners. 

Setting  aside  fraudulent  releases. — However,  if  it  can  be  shown  that 
one  partner  has,  in  fraud  of  his  copartners  and  in  collusion  with  the 
defendant,  executed  a  release  for  the  purpose  of  preventing  them  from 
enforcing  a  just  demand,  the  defendant  will  not  be  allowed  to  plead 
this  release  as  a  defence  to  an  action  against  him.     Thus,  in  Barker 

*l/tfil  *^'  I^^°^^^*'*iso"j  (^)  the  plaintiffs.  Barker  and  Owen,  had  been 
-^  partners,  but  they  had  dissolved  partnership,  and  it  was  agreed 
that  Barker  should  get  in  the  debts  owing  to  the  firm,  and,  if  necessary, 
sue  for  the  same.  The  defendant  was  indebted  to  the  firm,  and  had 
notice  of  the  above  agreement.  He  was  also  a  creditor  of  Owen  on  a 
private  account,  and  Owen,  against  Barker's  consent,  gave  a  receipt 
for  the  partnership  debt,  and  after  the  commencement  of  the  action 
by  Barker  for  the  recovery  of  that  debt,  gave  the  defendant  a  formal 
release.  The  evidence  showed  that  the  release  was  given  to  defeat  the 
action — to  prevent  Barker  from  recovering  the  debt  due  to  the  firm — • 
and  as  part  of  a  scheme  for  discharging  Owen's  private  debts  to  the 
defendant.  Under  these  circumstances,  the  release  was  not  allowed  to 
be  pleaded.29 

27.  Representations  and  statements. — The  firm  is  bound  by  all  rep- 
resentations made  by  a  partner  whilst  acting  within  the  scope  of  his 

(m)  11  Mees.  &  W.  84.  3  Wash.  (U.  S.)  508.     So,  also,  a  release 

(n)  1  You.  &   J.   362.     See,   too,  As-  of  one   partner  discharges  his  copartner 

pinall  V.  The  London  and  N.  W.  Rail.  also.     Gray  v.  Brown,  22  Ala.  262.     And 

Co.,  11  Hare  325;  Phillips  v.  Clagett,  11  a  release  of  errors  by  one  partner  will 

Mees.  &  W.  84.  bind   his  copartner.      Wood  v.  Goss,  21 

29.  Releases  given  by  one  partner. —  111.  604. 
Although,  in  general,  one  partner  cannot  But  in  Beatson  v.  Harris  (60  N.  H.  83) 
bind  the  other  by  deed,  yet  one  partner  it  is  held  that  a  release  of  a  suit  by  one 
may  sign  and  seal  a  release  which  will  be  of  two  partners,  by  connivance  with  de- 
binding  on  the  firm,  of  a  debt  due  to  the  fendant,  is  void.  See,  also.  South  Fork 
partnership.  Halseyt;.  Whitney,  4  Mason  Canal  Co.  v.  Gordon,  6  Wall.  (U.  S.)  561. 
(U.  S.)  206,  231 ;  United  States  v.  Astley, 

225  15 


146= 


IMPLIED    POWERS    OF    PARTXEPvS. 


[book  II., 


real  or  implied  authority,  and  having  reference  to  the  business  of  the 
lirin;(o)  but  not  by  statements  made  by  him  as  to  his  authority  to  do 
that  which  the  nature  of  the  business  of  the  firm  does  not  impliedly 
warrant,  [p) 

The  liability  of  partnerships  for  false  and  fraudulent  representations 
will  be  discussed  in  the  next  section  of  this  chapter.30 


(o)  Rapp  V.  Latliam,  2  B.  &  A.  795 ; 
Blair  V.  Bromley,  2  Ph.  354  ;  Wickham  v. 
Wickham,  2  Kay  &  J.  478. 

(p)  Ex  parte  Agace,  2  Cox  312. 

30.  Representations  and  statements 
by  one  partner. — To  an  action  brought 
by  three  partners  for  an  indebtedness  to 
the  firm,  defendants  pleaded  that  two  of 
the  partners  had  represented  to  defend- 
ants that  they  alone  composed  the  firm, 
and  upon  the  strength  of  such  representa- 
tions the  indebtedness  sued  for  was  con- 
tracted. Held,  that  such  plea  could  not 
defeat  the  action,  where  the  third  part- 
ner neither  authorized  nor  knew  of  such 
misrepresentations.  Kush  v.  Thompson 
(Ind.),  13  N.  E.  Rep.  665. 

Representations  by  a  member  of  a  firm 
to  the  payees  and  endorsees  of  notes  of  the 
firm,  without  knowledge  that  the  notes 
were  tainted  with  usury,  that  the  debt 
represented  by  the  notes  was  all  right  and 
would  be  promptly  paid,  are  binding  on 
the  firm,  and  estop  them  from  setting  up 
usury  in  defence  to  a  suit  on  the  notes. 
French  v.  Rowe,  15  Iowa  563. 

Where  one  of  a  firm  makes  representa- 
tions that  certain  flour  was  bought  on 
account  of  a  third  person,  and  that  the 
firm's  interest  is  limited  by  the  amount 
advanced  by  them  in  making  the  pur- 
chase, the  firm  cannot  assert  their  owner- 
ship, as  against  one  who  has  purchased 
of  said  t-hird  person.  Bemis  v.  Becker,  1 
Kan.  226. 

The  general  rule  that  where  one  makes 
a  statement  as  received  from  another,  and 
refers  directly  to  that  other,  the  former  is 
not  bound  for  the  truth  of  the  facts  thus 


stated,  is  not  applicable  to  the  case  of 
partners,  who  are  responsible  for  each 
other's  statements  in  regard  to  their  joint 
transactions.  Cook  v.  Castner,  9  Cush. 
(Mass.)  266. 

A  declaration  by  a  surviving  partner 
that  the  partnership  owed  the  deceased  a 
certain  sum,  may  be  proved,  to  show  that 
there  was  an  account  stated  with  the  de- 
ceased in  his  lifetime.  Cunningham  v. 
Sublette,  4  Mo.  224. 

Where  one  of  two  partners  makes  fraud- 
ulent representations,  whereby  goods  are 
obtained  and  consigned  to  his  partner, 
replevin  in  the  cepit  lies  against  both. 
Olmsted  v.  Hotailing,  1  Hill  (N.  Y.)  317. 

A  partner  sold  certain  promissory  notes 
belonging  to  the  firm,  for  the  benefit  of 
the  firm,  stating  to  the  purchaser  that 
they  were  good  notes  and  would  be  paid, 
that  the  endorser  was  worth  a  certain 
sum,  and  the  maker  another  certain  sum, 
which  representations  were  false.  Held, 
that  the  firm  were  bound  by  the  represen- 
tations of  the  partner,  and  an  action  on 
the  warranty  might  be  maintained  against 
all  the  members.  Sweet  v.  Bradley,  24 
Barb.  (N.  Y.)  549. 

The  declaration  of  a  partner  after  he 
had  purchased  a  chattel,  that  he  had 
bought  it  for  the  firm,  is  not  suflBcient 
nor  competent  evidence  to  render  a  co- 
partner liable.  White  v.  Gibson,  11  Ired. 
(N.  C.)  L.  283. 

The  declarations  of  a  partner,  not  a 
party  to  the  suit,  are  not  competent  evi- 
dence of  a  partnership.  Martin  v.  Kaf- 
froth,  leSerg.  &R.  (Pa.)  120. 

The  acts  and  declarations  of  a  partner 


226 


CHAP.  I.,  §  II.] 


DOCTRINES   OF   AGENCY. 


146^ 


See  further  on  this  subject,  ante,  under  the  head  "Admissions." 

28.  Sales. — Any  partner  can  dispose  of  any  of  the  partnership 
goods,  (g)  and  in  one  case  it  was  even  held  that  he  could  make  a  valid 
sale  of  the  partnership  books,  (r) 

If  by  any  event  the  partners  become  mere  tenants  in  common  of 
the  partnership  goods,  and  one  assumes  to  sell  them,  the  purchaser, 
although  he  may  only  become  tenant  in  common  with  the  other  part^ 
ners,  will  nevertheless,  if  he  gets  possession  of  the  goods,  be  able  to 
retain  them  as  against  his  cotenants,  for  no  action  lies  by  one  tenant 
in  common  against  another  for  the  recovery  of  the  goods  belonging 
to  both,  (s) 

*The  question  whether  a  partner's  power  to  sell  is  in  any  r-^.,  .- 
way  affected  by  the  Factors'  acts  has  already  been  noticed,  (t)  31 


may  be  given  in  evidence  to  prove  his 
assent  to  the  junction  of  his  firm  with  the 
firm  of  a  third  person ;  also  the  conduct 
of  the  third  person's  firm.  Wood  v.  Con- 
nell,  2  Whart.  (Pa.)  543. 

(q)  Lambert's  Case,  Godb.  244. 

(r)  Dore  v.  Wilkinson,  2  Stark.  287. 

(s)  Litt.,  §323;  Foxv.  Hanbury,  Cowp. 
445 ;  and  see  Buckley  v.  Barber,  6  Ex. 
182 ;  ante  p.  *61. 

(t)  Ante  p.  *140. 

31.  Sales  by  one  partner,  gener- 
ally.— Each  partner  has  complet-e  control 
over  and  power  of  disposal  of  the  partner- 
ship property  for  the  purposes  of  the 
business.  The  fact  that  the  firm  property 
consists  of  ships  does  not  alter  the  rule. 
Lamb  v.  Durant,  12  Mass.  54. 

He  has  a  right  to  sell  goods  belonging 
to  the  firm,  to  be  paid  for  by  personal 
property,  which  is  to  be  delivered  only  on 
his  own  order.  McBain  v.  Austin,  16 
Wis.  87. 

If  A  be  a  silent  partner  with  B,  he  is 
the  only  person  who  can  object  to  the  va- 
lidity of  a  sale  by  B  alone,  of  goods 
owned  in  common  by  them  as  partners. 
Derby  v.  Gallup,  5  Minn.  119.  And  see 
Birks  V.  French,  21  Kan.  238. 

While  one  partner  may  bind  the  other 
by  a  sale  of  the  good  will  of  the  busi- 


ness, he  cannot  bind  his  partner,  by  a  eon- 
tract,  not  to  go  into  the  same  business. 
Morean  v.  Edwards,  2  Tenn.  Ch.  347. 

In  Louisiana,  the  mere  fact  that  one 
member  of  an  ordinary  planting  partner- 
ship is  entrusted  with  the  management  of 
the  plantation  will  not  authorize  him  to 
make  a  dation  en  paiement  of  certain  prop- 
erty of  the  firm  to  one  of  its  creditors,  and 
thus  place  the  interest  of  his  copartner  in 
such  property  beyond  the  reach  of  the 
other  creditors  of  the  firm.  Bass  v.  Mes- 
sick,  30  La.  Ann.  373. 

Sale  of  entire  stock  in  one  transac- 
tion.— The  principle  is  settled  that  a  sale 
of  all  the  goods  of  a  mercantile  partner- 
ship, at  once,  is  in  the  course  of  trade,  and 
a  fair  sale  of  all,  by  a  single  contract,  by 
one  partner  is  within  the  implied  powers 
incident  to  the  partnership  relation.  Ellis 
V.  Allen  (Ala.),  2  So.  Eep.  676.  S.  P., 
Arnold  v.  Brown,  24  Pick.  (Mass.)  89. 

Fair  dealing  betweea  partners  requires 
that  before  one  undertakes  to  sell  the  en- 
tire stock,  either  for  cash  or  in  payment 
of  a  debt,  he  should  consult  the  other,  if 
conveniently  accessible,  no  sudden,  im- 
perative exigency  arising.  The  other 
may  protect  himself  by  forbidding  the 
sale,  or  dissenting  before  it  is  complete ; 
and  if  it  is  consummated  without  notice  to 


227 


147^ 


IMPLIED    POWERS   OF    PARTNERS. 


[book    II., 


29.  Servants. — One  partner  has  implied  authority  to  hire  servants 
to  perform  th^  business  of  the  partnership,  (it)  and  the  writer  pre- 


him,  and  works  any  wrong  or  injury  to 
him,  he  may  obtain  relief  in  equity;  but 
if  he  acquiesces  in  it  or  declines  to  enforce 
his  equitable  rights,  a  partnership  creditor 
cannot  assail  it  except  on  grounds  which 
would  avoid  a  sale  by  the  partnersliip. 
Ellis  V.  Allen,  supra. 

If  the  sale  was  made  subject  to  the  con- 
dition that  the  other  partner  should  assent 
to  it,  his  assent  or  subsequent  ratification 
must  be  shown  ;  but  such  assent  or  ratifi- 
cation may  be  either  express  or  implied, 
and  is  a  question  for  the  jury,  to  be  deter- 
mined by  a  consideration  of  all  the  cir- 
cumstances,    lb. 

Such  sale  may  be  made  notwithstanding 
the  protest  of  the  other  partner  (Graser  v. 
Stellwagen,  25  X.  Y.  315) ;  but  the  pur- 
chasers at  such  a  sale,  with  knowledge  of 
the  circumstances,  purchase  at  their  peril. 
Williams  v.  Roberts,  6  Coldw.  (Tenn.)  493. 
A  purchaser  in  good  faith,  at  such  a 
sale,  does  not  become  a  tenant  in  common 
with  the  other  partner,  but  acquires  title 
to  the  whole.  Crites  v.  Wilkinson,  65 
Cal.  559. 

Such  a  sale  dissolves  the  partnership, 
although  the  term  for  which  it  was  formed 
has  not  expired  (Whitton  v.  Smith,  1 
Freem.  (Miss.)  Ch.  231 ;  Deckard's  Case, 
5  Watts  (Pa.)  22 ;  but  see  Kimball  v.  Ham- 
ilton, &c.,  Ins.  Co.,  8  Bosw.  (N.  Y.)  495) ; 
and  the  fact  that  it  is  made  on  Sunday 
will  not  invalidate  it,  it  not  being  in  the 
usual  business  of  sales,  and  being  a  work 
of  necessity.  Schneider  v.  Sansom,  62 
Tex.  201  ;  S.  C,  50  Am.  Rep.  521. 

When  the  partnership  is  not  strictly  a 
trading  one,  such  unauthorized  sale,  in 
the  temporary  absence  of  the  other  part- 


ner, is  not  valid  as  against  the  latter,  but 
is  binding  upon  the  partner  making  the 
sale,  and  he  thereby  disposes  of  all  his 
interest  in  the  joint  property  of  the  part- 
nership.    Blaker  v.  Sands,  29  Kan.  551. 

Under  Cal.  Civ.  Code,  g  2430,  subd.  3, 
providing  that  a  partner,  as  such,  has  no 
authority  "  to  dispose  of  the  whole  of  the 
partnership  property  at  once,  unless  rt 
consists  entirely  of  merchandise,"  a  stallion 
kept  for  breeding  purposes  is  not  merchan- 
dise. Myers  v.  Moulton,  12  Pac.  Rep.  505. 
Sale  of  partner's  undivided  interest. 
— One  partner  cannot  sell  or  mortgage  his 
undivided  interest  in  a  specific  part  of 
the  property  belonging  to  the  partnership. 
Lovejoy  v.  Bowers,  11  N.  H.  404. 

A  member  of  a  copartnership  sold  and 
assigned  to  another  "  all  his  interest  in 
and  to  the  property,  goods,  wares  and 
.merchandise  and  debts  belonging  to  the 
firm."  Held,  that  a  debt  owing  by  him- 
self to  the  firm  did  not  pass  by  the  assign- 
ment, the  interest  of  the  assignor  being 
only  what  remained  over  and  above  the 
amount  of  his  indebtedness  to  the  firm. 
Van  Scoters.  Lefferts,  11  Barb.  (N.  Y.)  140. 
Sale  by  partner  to  pay  individual 
debt.  —  The  rule  is  well  settled  that 
although  one  partner  can  transfer  the 
property  of  the  firm  to  its  creditors  in 
discharge  of  its  indebtedness,  he  cannot 
apply  the  partnership  property,  funds  or 
securities  to  the  discharge  of  his  own 
private  debt  without  the  consent  of  tlie 
other  partners,  either  express  or  implied. 
Caldwell  v.  Scott,  54  N.  H.  414 ;  Hyrsch- 
felder  v.  Keyser,  59  Ala.  338  ;  Stegall  v. 
Coney,  49  Miss.  761 ;  Geery  v.  Cockroft, 
33  N.  Y.   Super.   Ct.   147;    Williams   v. 


(u)  Beckham  v.  Drake,  9  Mees.  &  W.  described  accordingly  in  an  indictment 
79.  A  servant  of  the  firm  is  a  servant  for  stealing  the  separate  property  of  or>e 
of   each  of   the   partners,   and    may   be    of  the  partners.     R.  v.  Leeds,  3  Stark.  70. 

228 


CHAP.  I.,  §  II.] 


DOCTRINES    OF    AGENCY. 


147* 


sumes  that  one  partner  has  also  implied  authority  to  discharge  them, 
although  he  cannot  do  so  against  the  will  of  his  copartners,  (x)  32 


Barnett,  10  Kan.  455 ;  Post  v.  Kimberly, 
9  Johns.  (N.  Y.)  470.  See,  also,  infi-a, 
p.  *172  and  note  — ,  where  this  subject  is 
more  fully  examined. 

But  if  such  sale  be  made  to  a  bona  fide 
purchaser,  and  the  money  received  is  mis- 
applied, the  other  partner  cannot  follow 
the  goods  in  the  hands  of  such  purchaser 
(Chipley  v.  Keaton,  65  N.  C.  534) ;  nor 
can  he  maintain  an  action  of  any  kind 
against  him.  Wells  v.  Mitchell,  1  Ired. 
(N.  C.)  L.  484.  See,  also,  Stokes  v.  Ste- 
vens, 40  Cal.  391 ;  Corwin  v.  Suydam,  24 
Ohio  St.  209. 

The  act  of  a  partner  in  selling  goods 
raises  an  implied  promise  on  the  part  of 
the  vendee  to  pay  the  partnership  for 
them,  subject,  however,  to  be  controlled 
by  any  express  contract  which  may  have 
existed  to  the  effect  that  the  vendee  was 
not  to  pay  the  partnership,  but  to  credit 
the  amount  of  the  goods  on  an  individual 
claim  against  the  partner  who  sold  the 
goods,  in  favor  of  the  vendee.  Broaddus 
V.  Evans,  63  N.  C.  633 ;  Ramey  v.  McBride, 
4  Strobh.  (S.  C.)  12. 

Sale  of  land  by  one  partner. — The 
mere  fact  that  persons  are  mercantile  part- 
ners does  not  empower  one  of  them  to 
execute  an  agreement  for  the  sale  of  real 
estate  in  the  name  of  both.  McWhorter 
V.  McMahan,  1  Clarke  (N.  Y.)  Ch.  400. 

Where  real  estate  is  conveyed  to  a  firm, 
or  to  the  members  thereof  in  trust  for  the 
firm,  the  partners  become  tenants  in  com- 
mon of  the  estate,  and  neither  of  them 
can  alone  convey  more  than  his  undivided 
interest  therein.  Anderson  v.  Tompkins, 
1  Brock.  (U.  S.)  456;  Willey  i'.  Carter,  4 
La.  Ann.  56  ;  Weld  v.  Peters,  1  Id.  432  ; 
Arnold  v.  Stevenson,  2  Nev.  234  ;  Donald- 
son V.  Bank  of  Cape  Fear,  1  Dev.  (N.  C.) 
Eq.  103. 

If  the  object  of  a  partnership  is  to  pur- 


chase, improve,  and  own  a  certain  tract 
of  land,  neither  partner  has  any  implied 
power  to  alienate  any  part  of  the  land. 
The  power  to  create  a  debt  and  convey 
the  land  in  payment  cannot  be  implied 
from  the  power  to  convey  in  payment  of  a 
debt  previously  contracted  by  one  partner, 
in  the  exercise  of  an  undoubted  power. 
Berry  v.  Folkes,  60  Miss.  576. 

But  a  contract  to  convey  lands  belong- 
ing to  a  firm,  signed  with  the  firm  name 
by  one  partner,  under  a  verbal  authority 
from  the  other  partner,  is  binding  on 
both.  Lawrence  v.  Taylor,  5  Hill  (N.  Y.) 
107.  And  inasmuch  as  a  surviving  part- 
ner is  charged  with  the  payment  of  the 
debts  of  the  firm,  he  has  the  right  in 
equity  to  dispose  of  its  real  estate  for  that 
purpose ;  and  although  his  deed  will  not 
convey  the  legal  estate  to  a  purchaser,  yet 
it  will  convey  the  equity  to  him,  and 
through  it  he  may  compel  the  heir  to 
convey  the  legal  title.  Andrews  v.  Brown, 
21  Ala.  437.  See,  also,  Paton  v.  Baker,  62 
Iowa  704. 

(x)  Donaldson  v.  Williams,  1  Cromp. 
&  M.  345.  But  see  Dixon  on  Part.  139, 
contra. 

32.  Servants.— Where  one  of  two  part- 
ners employs  a  laborer  or  other  employee 
about  the  business  of  the  firm,  the  whole 
firm  is  liable  for  his  wages,  whatever 
agreement  may  subsist  between  the  part- 
ners. Coons  V.  Eenick,  11  Tex.  134. 
S.  P.,  Bodwell  V.  Eastman,  106  Mass.  525. 
And  such  a  contract  for  services  binds  the 
firm  even  after  the  admission  of  a  new 
member  into  the  firm.  Froun  v.  Davis, 
97  Ind.  401.  See,  alse,  Beste  v.  Creditors, 
15  La  Ann.  55  ;  Moister's  Appeal,  74  Pa. 
St.  166. 

As  to  the  power  of  the  sole  acting 
partner  to  dismiss  employees,  as  against 
the  power  of  the  dormant  partners  to  re- 


229 


147*  IMPLIED   POWERS   OF   PARTNERS.  [bOOK   II., 

30.  Shij)s. — Where  necessary,  one  partner  may  bind  the  firm  by 
chartering  a  ship  on  its  behalf,  and  one  partner  may  mortgage  a  ship 
belonging  to  the  fi-rni.  {y) 


SECTIOX   III. LIABILITY   OF    PARTNERS    IN   RESPECT    OF   TORTS 

AND    FRAUDS. 

Liability  of  principals  for  the  torts  and  frauds  of  their  agents. — 
If  it  were  necessary,  in  order  that  one  person  should  be  liable  for  the 
tort  or  fraud  of  another,  that  the  former  should  have  authorized  the 
commission  of  such  tort  or  fraud,  it  would  be  a  comparatively  easy 
matter  to  determine  in  any  particular  case  whether  a  tort  or  fraud 
committed  by  an  agent  could  or  could  not  be  imputed  to  his  principal. 
But  as  a  principal  is  bound,  not  only  by  the  authorized  acts  of  his 
agent,  but  also  by  such  unauthorized  acts  as  fall  within  the  scope  of 
the  authority  apparently  conferred  upon  him,  the  question  whether  a 
tort  or  fraud  committed  by  an  agent  is  or  is  not  imputable  to  his  prin- 
cipal becomes  one  of  considerable  difficulty ;  for  it  is  obvious  that  it 
does  not  follow  from  the  circumstance  that  such  tort  or  fraud  was  not 
authorized,  that  therefore  the  principal  is  not  legally  responsible 
for  it.  (z) 

^  -.  *  General  principles. — In  order  that  responsibility  may 
-*  attach  to  the  principal,  in  respect  of  a  tort  or  fraud,  it  is 
necessary — 

1.  That  he  shall  have  authorized  it  in  the  first  instance;  or, 

2.  Tiiat  it  shall  have  been  done  on  his  behalf  and  he  shall  have 
ratified  it ;  (a)  or, 

3.  That  it  shall  have  been  committed  for  his  benefit  by  the  agent  in 
the  course  and  as  part  of  his  employment.  (6) 

tain  them,  see  Briggs  v.  Smith,  4  Daly  18  Id.  886 ;  Brodie  v.  Howard,  17  C.  B. 

(N.  Y.)110.  109. 

(y)  See,   as   to   chartering,   Thomas   v.  (z)  Pollock  on  Torts  63,  et  seg. ;  Story 

Clarke,  2  Stark.  451,  and,  as  to  mortgaging,  on  Agency,  §  452  ;  Paley  on  Agency  294, 

Ex  parte  Howden,  2  Mont.,  D.  &  D.  574.  et  seq. 

The  circumstance  that  a  person  is  regis-  (a)  Ratification  can  only  be  of  an  act 

tered  as  a  part  owner,  does  not,  per  se,  done  for  the  person  ratifying.     Wilson  v. 

render  him  liable  for  the  acts  of  the  other  Tumman,  6  Man.  &  G.  236. 

owners.     Myers  i.  Willis,  17  C.  B.  77,  and  (6)  As  to  the  meaning  of  this  expres- 

230 


CHAP.  I.,  §  III.]  DOCTRINES   OF   AGENCY.  148* 

That  this  last  is  sufficient  is  obvious  from  those  cases  in  which 
masters  have  been  held  liable  for  the  negligence  of  their  servants ;  (c) 
litigants  for  irregularities  committed  by  their  solicitors  in  the  course 
of  the  litigation  to  conduct  which  they  are  retained ;  ((^)  merchants  for 
frauds  committed  by  their  factors  and  brokers  whilst  acting  on  their 
behalf;  (e)  and  shopkeepers  for  the  illegal  acts  of  their  shopmen  whilst 
in  the  shop  and  attending  to  its  business.  (/) 

ExGeptions  to  the  rule  '^Respondeat  superior.''^ — On  the  other  hand,  a 
principal  is  not  liable  for  the  torts  or  frauds  of  his  agent,  except  upon 
one  or  other  of  the  three  above-mentioned  grounds.  Thus,  a  princi- 
pal is  not  liable  for  the  willful  acts  of  his  agent  if  not  done  in  the 
course  of  his  employment  and  as  part  of  his  business  ;  {g)  and  this  is 
true  not  only  of  assaults,  batteries,  libels  and  the  like,  but  also  of 
frauds.  The  maxim  '^ Respondeat  superior^'  does  not  render  a  principal 
liable  for  the  frauds  of  his  agent  if  the  agent  has  been  dealt  with  as  a 
principal,  (A)  nor  unless  the  frauds  have  been  committed  by  the  agent 
for  the  benefit  of  his  principal  and  in  the  course  and  as  part  of  his  own 
employment,  (i) 

Further,    a   principal    is    not    bound    by   a   contract   which    is    a 
*fraud  on  him,  and  is  known  to  be  so  by  the  person  entering  r^-j^^^ 
into  the  contract,  {k)  33 

sion,  see  Burns  v.  Poulsom,  L.  R.,  8  C.  P.  fited  by  such  a  contract,  Id.,  p.  55. 
563 ;  Pollock  on  Torts  72,  et  seq.  33.    Liability   of   principal   for  torts 

■    (c)  See  the  last  case,  and  Patten  v.  Rea,  and  frauds  of  agent.— The  members  of 

2  C.  B.  (N.  S.)  606.  a  firm  are  individually  liable,  in  actions 

(d)  Collett  D.Foster,  2  Hurlst.&N.  356.  of   tort,  for   the  acts   of  the   firm,  their 

(e)  Hern  v.  Nichols,  1  Salk.  289.  agents  and   servants,  and   for  such   acts 
(/)  Grammar    v.    Nixon,  1    Str.  653;    may  be  sued  individually.     Stockton  v. 

Amory  v.  Delamirie,  Id.  505.  Frey,  4  Gill   (Md.)  406.     Thus,  all   the 

{g)  McManus  v.  Crickett,  1  East  106  ;  partners  are  liable  for  an  injury  occasioned 

Croft  V.  Alison,  4  B.  &  A.  590 ;  Attorney-  by  the  negligence  of  one  of  them,  or  of 

General  v.  Siddon,   1  Cromp.  &  J.  220.  servants   employed   by   the    partnership, 

Compare  Limpus  v.  Lon.  Gen.  Om.  Co.,  1  while  transacting  the  business  of  the  firm. 

Hurlst.  &  C.  526.  Linton  v.  Hurley,  14  Gray   (Mass.)   191. 

(A)  Ex  parte  Eyre,  1  Ph.  227.  And  the  assent  of  one  of  two  partners  to 

(i)  Grant   v.   Norway,    10   C.   B.  665 ;  what  is  being  done  by  a  person  acting  as 

Coleman  v.  Riches,  16  Id.  104.  a  deputized  constable  in  the  service  of  an 

(k)  British  and  American  Tel.  Co.  v.  execution  in  favor  of  the  firm,  is  sufficient 

Albion  Bank,  L.  R.,  7  Ex.  119;  Phosphate  to  bind   both.     Harvey  v.  McAdams,  32 

of  Lime  Co.  v.  Green,  L.  R.,  7  C.  P.  43,  Mich.  472. 

and  see,  as  to  the  efi'ect  of  having  bene-       So,  where  one  partner  has  an  attach- 

231 


149* 


IMPLIED    POWERS    OF    PARTNERS. 


[book    II., 


Having  made  these  preliininuiy  observations,  it  is  proposed,  in  the 
present  section,  to  examine  the  liability  of  partners  for  torts  and  frauds, 
as  distinguished  from  contracts. 

First,  as  regards  torts. 

Torts  of  partners. — It  follows  from  the  principle  of  agency,  coupled 
with  the  doctrine  that  each  partner  is  the  agent  of  the  firm  for  the 
purpose  of  carrying  on  its  business  in  the  Usual  way,  that  an  ordinary 
partnership  is  liable  in  damages  'for  the  negligence  of  any  one  of  its 
members  in  conducting  the  business  of  the  partnership.  It  has  ac- 
cordingly been  held  that  a  firm  of  coach  proprietors  is  answerable  for 
the  negligent  driving  of  a  partnership  coach  by  one  of  the  firm,  the 
coach  being  driven  for  the  firm  in  the  ordinary  course  of  business  ;(^) 
and  that  two  partners  are  liable  for  not  keeping  the  shaft  of  a  mine 
in  proper  order,  although  one  of  them  only  actually  superintended 
it.(rji)  So,  a  partnership  is  liable  for  the  negligence  of  its  servants 
acting  in  the  course  of  their  employment  by  the  firm,  (n)  34 

ment  made  on  account  of  a  firm  debt,  and    executions  of  writs  by  one  of  two  part- 


the  goods  are  afterwards  sold  under  an 
execution  in  the  same  suit,  and  the  pro- 
ceeds applied  to  meet  the  debt,  this  is 
proof  of  a  ratification  of  the  attachment 
by  all  the  partners  ;  and  if  it  be  wrongful, 
they  will  all  be  liable  in  an  action  of  tort. 
Gurler  v.  Wood,  16  N.  H.  539. 

But  where  one  partner  in  a  firm  acting 
as  agents  for  the  owner  of  demised  prop- 
erty, commits  a  trespass  in  expelling  tlie 
tenant  and  removing  his  goods,  the  other 
partner,  who  takes  no  part  in  the  act  and 
knows  nothing  of  it  at  the  time,  and  neither 
advises  nor  directs  it,  cannot  be  rendered 
liable  on  the  mere  ground  of  his  subse- 
quent approval  and  sanctioning  of  the  act 
after  its  commission.  Grund  v.  Van  Vleck, 
69  111.  478. 

(l)  Moreton  v.  Hardern,  4  Barn.  &  C. 
223 ;  and  see,  as  to  ships,  Steel  v.  Lester, 
3  C.  P.  D.  121. 

(m)  Mellors  v.  Shaw,  1  Best  &  S.  437  ; 
Ashworth  v.  Stanwix,  7  Jur.  (N.  S.)  467, 
and  3  El.  &  E.  701.     See,  as  to  irregular 


ners,  Duke  of  Brunswick  v.  Slowman,  8 
C.  B.  317. 

(n)  Stables  v.  Eley,  1  Car.  &  P.  614. 

34.  Torts  of  partners,  generally.^- 
The  firm  is  liable  in  solido  for  the  tort  of 
one  partner  committed  by  him  as  such, 
and  in  the  course  of  the  firm  business 
.  (Stockwell  V.  United  States,  3  Clifi:  (U.  S.) 
284) ;  but  if  a  partner  commit  a  tort,  not 
as  a  partner,  but  as  an  individual,  in  re- 
spect to  a  matter  entirely  foreign  to  the 
business  of  the  partnership,  the  other  part- 
ners are  not  liable  (Schwabacker  v.  Rid- 
dle, 84  111.  517)  unless  they  either  au- 
thorized or  adopted  the  wrongful  act. 
Graham  v.  Meger,  4  Blatchf.  (U.  S.)  129; 
Heirn  v.  McCaughan,  32  Miss.  17  ;  Taylor 
V.  Jones,  42  N.  H.  25.  See,  also,  Eoney  v. 
Buck-land,  5  Nev.  219. 

Conversion. — Where  one  partner,  in 
the  due  course  of  business  of  the  firm, 
seizes  and  takes  the  property  of  another, 
which  is  appropriated  to  the  use  and 
benefit  of  the  firm,  thereby  increasing  its 


232 


CHAP.  I.,  §  III.]  DOCTRINES    OF    AGENCY.  149* 

Breach  of  revenue  laws.— If  one  partner,  in  conducting  the  business 
of  the  firm,  is  guilty  of  a  breach  of  the  revenue  laws,  all  the  partners 
are  jointly  and  severally  answerable  for  the  consequent  penalties, 
although  they  may  not  themselves  have  authorized  or  been  parties  to 
the  illegal  conduct  of  their  copartner,  (o)  35 

assets,  the  other  partners  will  be  liable  for  v.  Brewer,  49  Ala.  119.  And  an  action 
the  conversion.  Durant  v.  Rogers,  87  111.  for  injuries  sustained  through  the  negli- 
5Qg_  gence   of   an    employee   of    a  firm   may 

An  assent  by  some  of  the  partners  to  a  be  brought  against  any  one  or  more,  or 
conversion  by  the  others  will  make  them  all,  of  its  members.  Roberts  v.  Johnson, 
wrong-doers  equally  with  the  rest,  pro-    58N.  Y.  613. 

vided  the  conversion  was  for  their  use  and  (o)  R.  v.  Stranyforth,  Bunb.  97  ;  Attor- 
benefit,  and  they  were  in  a  situation  to  ney-General  v.  Burges,  Id.  223  ;  Attorney- 
have  originally  commanded  the  conver-  General  v.  Weeks,  lb. ;  R.  v.  Manning, 
sion.  Loomisz).  Barker,  69  111.  360.  S.  P.,  Comyn  616.  See,  also,  Mullins  v.  Collins, 
In  re  Ketchum,  1  Fed.  Rep.  815.  L.  R.,  9  Q.  B.  292  ;  Attorney-General  v. 

A  conversion  by  one  of  a  firm  to  which  Siddon,  1  Crbmp.  &  J.  220.  Compare 
goods  have  been  sent  to  be  made  up,  does  Newman  v.  Jones,  17  Q.  B.  D.  132. 
not  excuse  the  owner  from  paying  the  35.  Breach  of  revenue  laws.--Every 
other  partners,  and  therefore  he  may  partner  is  civilly  liable  for  violations  of 
bring  trover  against  the  guilty  partner  the  revenue  law  by  his  copartners,  whether 
alone.     Stevens  v.  Faucet,  24  111.  483.  he  knew  of  or  consented  to  such  viola- 

In  Loomis  v.  Barker  (69  111.  360),  tions  or  not.  United  States  v.  Thomasson, 
where  one  partner  placed  a  claim  in  the  4  Biss.  (U.  S.)  99.  And  two  or  more 
hands  of  a  constable  for  collection,  under  partners  are  jointly  and  severally  crimi- 
which  property  of  a  stranger  was  seized  nally  liable  for  the  circulation  of  change- 
and  sold  under  attachment  or  execution,  bills  by  their  clerk,  in  violation  of  Ala. 
and  the  other  partner  being  present  at  Rev.  Code,  §  3643,  although  they  did  not 
the  sale,  bid  on  the  property,  and  treated  jointly  assent  thereto,  and  did  not  know 
and  spoke  of  it  as  having  been  taken  and  when  the  bills  were  emitted.  Barnett  v. 
sold  on  the  process  issued  upon  a  claim    State,  54  Ala.  579. 

due  the  firm,  and  received  the  proceeds  If  two  persons  composing  a  firm  make 
of  the  sale  as  a  payment  on  such  claim,  it  and  sign,  in  their  partnership  name,  a 
was  held  in  trover  by  the  owner  against  false  return  to  the  assessor  of  internal 
the  partners,  that  they  were  both  liable  revenue,  they  may  be  jointly  indicted 
for  the  conversion.  Loomis  v.  Barker,  therefor.  United  States  v.  McGinnis,  1 
69  111.  360.  See,  also,  Chambus  v.  Abb.  (U.  S)  120.  And  where  one  of  two 
Clearwater,  1  Abb.  (N.  Y.)  App.  Dec.  partners,  with  the  other's  knowledge,  con- 
341 ;  S.  C,  1  Keyes  310 ;  aflarming  41  verted  to  the  firm's  use  money  received  by 
Barb.  200.  bim  as  United  States  revenue  collector,  it 

Negligence.— The  owner  of  a  horse  was  held  that  a  bond  given  by  the  firm  to 
borrowed  by  a  partner  to  be  used  in  the  indemnify  the  sureties  on  the  collector's 
firm  business,  and  lost  through  his  bond  created  a  firm  indebtedness,  even 
neglect,  or  other  wrong  doing,  may  recover  though,  at  the  time  it  was  given,  the  sure- 
therefor  against  the  partnership.  Witcher    ties  had  not  made  good  the  defalcation,  as 

233 


149*  IMPLIED    rOWER-S   OF   PARTNERS.  [bOOK    II., 

Willful  torts. — As  a  rule,  however,  the  willful  tort  of  one  partner 

is  not  imputable  to  the  firm.     For  example,  if  one  partner  maliciously 

prosecutes  a  person  for  stealing  partnership  property,  the  firm  *is  not 

^   answerable,  unless  all  the  members  are,  in  fact,  privy  to  the 
*150l  •  •  •  •     •  '  f      J 

-"  malicious  prosecution.  (_p)     But  a  willful  tort,  committed  by 

a  partner  in  the  course  and  for  the  purpose  of  transacting  the  business 

of  the  firm,  may  make  the  firm  responsible,(7)  36 

Secondly,  as  regards  frauds. 

Frauds  of  pa^-tners. — An  ordinary  firm  is  liable  for  frauds  com- 
mitted by  one  of  its  members  Avhilst  acting  for  the  firm  and  in  trans- 
acting its  business,  and  the  innocent  partners  cannot  divest  themselves 
of  responsibility  on  the  ground  that  they  never  authorized  the  com- 
mission of  the  fraud.  On  the  other  hand,  the  firm  is  not  liable  for 
the  other  frauds  of  its  members,  unless  it  has  in  fact  sanctioned  such 
frauds,  or  the  transactions  of  which  they  form  part.  It  will  be  con- 
venient to  examine  this  subject,  first,  with  reference  to  misapplications 
of  money,  and  secondly,  with  reference  to  false  representations  by 
partners.  37 

their  liability  became  fixed  immediately  by,  2   Sandf.    (N.  Y.)    421  ;    Doremus  v. 

upon  the  conversion.     Wharton  v.  Clem-  McCormick,  7  Gill  (Md.)  49  ;  Tenney  v. 

ents,  3  Del.  Ch.  209.  Foote,  95  III.  101.     As  to  what  facts  will 

(p)  Arbuckle  v.  Taylor,  3  Dow  160.  raise  a  presumption  that  a  partner  was 

iq)  See  Limpus  v.  Lon.  Gen.  Om.  Co.,  cognizant  of  and  assenting  to  a  fraud  C9m- 

1  Hurlst.  &  C.  526  ;  Pollock  on  Torts  80,  mitted  by  his  copartners,  see  Townsend  v. 

et  seq.  Bogart,  11  Abb.  (N.  Y.)  Pr.  355. 

36.  Willful  torts. — That  all  of  the  part-  Where  A,  on  entering  into  partnership 
ners  owning  a  newspaper  are  liable  for  a  with  B,  purchases  an  interest  in  a  stock 
libel  published  therein  by  one  of  them,  of  goods  held  by  B,  and  the  goods  are 
see  Lothrop  v.  Adams,  133  Mass.  471.  afterwards   seized  on    attachment    as   the 

37.  Frauds  of  partners,  generally. —  property  of  a  third  person,  and  in  an 
All  the  members  of  a  firm  are  answerable  action  by  A  and  B  against  the  attaching 
for  a  fraud  committed  by  one  of  them,  or  officer  it  appears  that  the  goods  were  sold 
by  their  agent,  acting  within  the  scope  of  to  B  by  the  attachment  debtor,  and  that 
his  authority.  Locke  v.  Stearns,  1  Mete,  such  sale  was  fraudulent  and  void  as  to 
(Mass.)  560 ;  Eeynolds  v.  Waller,  1  Wash,  the  attaching  creditor,  A  and  B  cannot 
(U.S.)  164;  Diirant  i>.  Rogers,  87  111.  508;  recover  any  part  of  the  goods,  on  the 
Wolf  i;.  Mills,  56111.  360;  Chester  r.  Dick-  ground  that  A  purchased  his  interest 
erson,  54  N.  Y-  1 ;  Manuf-icturers',  &c.,  without  knowledge  of  the  fraud.  Esta- 
Bank  v.  Gore,   15  Mass.  75,  81 ;   Board-  brook  v.  Messersmith,  18  Wis.  545. 

man  v.  Gore,  Id.  331 ;  Hawkins  v.  Apple-        A  and  B  formed  a  partnership  in  the 

234 


CHAP.  I.,  §  III.]  DOCTRINES    OF    AGEXCY.  150* 

Liability  of  ixirtnerships  for  misapplication  of  money  by  their  mem- 
bers.— In  order  that  a  firm  may  be  liable  for  the  misapplication  of 
money  by  one  of  its  members,  some  obligation  on  the  part  of  the  firm 
to  take  care  of  the  money  must  be  shown.  A  receipt  of  the  money 
by  the  firm  prima  facie  imposes  this  obligation ;  but  where  there  is 
DO  receipt  by  the  firm,  there  is  prima  facie  no  obligation  on  its  part 
with  respect  to  the  money  in  question.  It  becomes  important,  there- 
fore, to  determine  accurately  when  money  is  to  be  considered  as  re- 
ceived by  the  firm.  Upon  this  point,  the  following  observations 
suggest  themselves : 

1.  The  firm  must  be  treated  as  receiving  what  any  partner  receives 
as  its  real  or  ostensible  agent, 'i.  e.,  in  the  course  of  transacting  the 
business  of  the  firm. 

2.  In  a  case  of  this  sort,  it  is  immaterial  whether  the  other  partners 
know  anything  about  the  money  or  not,  for  ex  hypothesi,  it  is  in  the 
custody  of  one  who  must  be  regarded  as  their  agent,  (r) 

3.  The  firm  cannot  be  treated  as  receiving  what  one  partner  receives 
otherwise  than  as  its  real  or  ostensible  agent,  unless  *the  money 
actually  comes  into  the  possession  or  under  the  control  of  the  '- 
other  partners,  (s) 

4.  Agency  being  excluded  in  such  a  case  as  the  last,  the  money  can- 
not be  considered  as  in  the  possession  or  under  the  control  of  the  inno- 
cent partners,  unless  they  know  that  it  is  so,  or  unless  they  are 
culpably  ignorant  of  the  fact,  (t) 

These  principles  will  be  found  to  reconcile  most,  if  not  all,  of  the 
numerous  decisions  upon  the  important  subject  now  under  considera- 
tion, and  to  warrant  the  following  rules  deduced  from  them. 

1.  Liability  of  firm,  for  money  received  by  one  partner  in  the  course 
of  business. — Where  one  partner,  acting  within  the  scope  of  his  au- 

commission    business,   A    furnished    the  knowledge  of  the   illegality  of  the  con- 
capital,  and  B  generally  did  all  the  trad-  tract.     Tenney  v.  Foote,  95  111.  101. 
ing.     B  made  a  contract  with  another  in  (r)  See  infra,  rules  1,  2,  3. 
the  course  of  the  firm   business,   which  (s)  See  rules  3  and  4. 
was  illegal,  as  relating  to  option  or  gam-  {t)  Compare  rule  2  with  rules  3,  4  and 
ing  contracts.     Held,  that  a  note  given  in  5,  and  see  infra,  p.  *161 ;  and  as  to  culp- 
consideration  of  a  balance  due  under  such  able  ignorance,  compare  Marsh  v.  Keat- 
contract  to  the  firm,  was  void  as  against  ing,  2  CI.  &  F.  289  ;  Sims  v.  Brutton,  5  Ex. 
the   firm,   or    an    assignee   with    notice,  802  ;  Ex  parte  Geaves,  8  De  G.,  M.  &  G. 
although  A,  the   other   partner,  had  no  291 ;  Cleather  v.  Twisden,  28  Ch.  D.  340. 

235 


151*  LIABILITY    FOR    MONEY    MISAPPLIED.  [boOK    II., 

thority,  as  evidenced  by  the  business  of  the  firm,  obtains  money  and 
misapplies  it,  the  firm  is  answerable  for  it.  38 

In  Willett  V.  Chambers  (w)  two  persons  carried  on  business  as 
solicitors  and  conveyancers,  in  partnership.  One  of  them  received 
money  from  a  client  to  invest  on  mortgage,  and  misapplied  it.  The 
otiier  partner  was  held  liable  to  repay  it  to  the  client.  Lord  Mans- 
field relied  upon  the  fact  that  the  bill  for  the  fictitious  mortgage  was 
made  out  in  the  name  of  the  firm  and  was  paid  to  the  innocent  part- 
ner. The  transaction,  therefore,  was  clearly  a  partnership  transaction, 
and  the  defendant,  although  perfectly  innocent  of  the  fraud  himself, 
was  liable  for  the  consequences. 

In  Brydges  v.  Branfill  (x)  one  of  several  solicitors  connived  at  a 

fraud  committed  by  a  client  of  the  firm  in  obtaining  money  *out 

-■   of  the  Court  of  Chancery.     The  money  was  received  by  the 

one  partner  under  a  power  of  attorney  and  was  handed  over  to  the 

client.     The  other  partners  were  entirely  innocent,  and  were,  in  fact, 

ignorant  of  the  transaction.     It  was  nevertheless  heid  that  they  were 

38.    Misapplication     of    money    re-  the  dissolution.     Smyth  v.  Harvie,  31  111. 

ceived  by  one  partner   in   the  course  62.    S.  P.,  Poole  v.  Gist,  4  McCord  (S.  C.) 

of   business. — Money    was   fraudulently  259. 

obtained  by  one  partner,  in  the  name  of  (m)  Cowp.  814.  See,  also,  Atkinson  v. 
the  firm,  and  in  business  transactions  such  Mackreth,  2  Eq.  570  ;  St.  Aubynj).  Smart, 
as  the  firm  engaged  in.  Held,  that  the  5  Eq.  183,  and  3  Ch.  646  ;  Dundonald  v. 
firm  might  be  liable  therefor,  although  Masterman,  7  Eq.  515.  Compare  Cleather 
the  transactions  were  unknown  to  the  v.  Twisden,  28  Ch.  D.  340  ;  Viney  v.  Chap- 
other  partner ;  but  that  if  the  person  deal-  lin,  2  De  G.  &  J.  483,  and  Bonrdillon  v. 
ing  with  the  one  partner  knew  that  he  Roche,  27  L.  J.  Ch.  681,  and  Harman  v. 
was  acting  in  violation  of  his  duty  to  the  Johnson,  2  El.  &  B.  61 ;  Plumer  v.  Greg- 
firm,  the  latter  would  not  be  liable.  Alex-  cry,  18  Ex.  621,  noticed  infra.  These 
ander  v.  State,  56  Ga.  478.  cases  show  that  whilst  it  is  the  ordinary 

Where  a  claim  was  placed  in  the  hands  business  of  a  solicitor  to  receive  money 
of  two  attorneys,  who  were  partners  in  from  a  client  for  investment  on  a  specific 
the  practice  of  law,  for  collection,  a  security,  it  is  not  part  of  his  ordinary 
judgment  obtained,  land  of  the  debtor  business  to  receive  money  for  investment 
sold  under  execution,  and  redemption  generally,  nor  to  keep  negotiable  securities 
from  the  sale  by  paying  the  money  to  the  for  his  clients,  nor,  without  express  au- 
sherifi",  who  paid  it  over  to  one  of  the  thority  from  them,  to  receive  money  for 
attorneys,  and  prior  to  the  redemption  them  on  the  payment  oflf  of  a  mortgage, 
the  law  copartnership  between  the  attor-  or  on  a  sale.  See,  also,  Re  Bellamy  and 
neys  was  dissolved,  both  of  the  partners  Met.  Bd.  of  Works,  24  Ch.  D.  387. 
were  held  liable  to  the  client  for  the  (x)  12  Sim.  369.  See,  too,  Todd  v.  Stud- 
money  thus  received  by  one  of  them  after  holme,  3  Kay  &  J.  324. 

236 


CHAP.  I.,  §  III.]  DOCTRINES   OF   AGENCY.  152* 

jointly  and  severally  liable  to  make  good  the  money  to  those  to  whom 
it  really  belonged.  (3/) 

In  these  eases  the  receipt  of  the  money  by  one  of  the  partners  was 
the  receipt  by  the  firm,  and  the  firm  was  liable,  although,  in  fact,  the 
other  partners  never  received  the  money  or  knew  of  its  receipt.  {£) 

2.  Liability  affirm  for  money  in  its  custody  in  the  course  of  business. 
— Where  a  firm  in  the  course  of  its  business  {a)  receives  money  belong- 
ing to  other  people  and  one  of  the  partners  misapplies  that  money 
whilst  it  is  in  the  custody  of  the  firm,  the  firm  must  make  it  good.  39 

In  Devaynes  v.  Noble,  Clayton's  case,  (6)  some  exchequer  bills, 
deposited  by  their  owner  with  a  firm  of  bankers,  were  sold  by  one  of 
the  partners  without  the  owner's  knowledge ;  the  money  produced  by 
the  sale  was  applied  by  the  firm  to  its  own  use,  and  it  was  held  to  be 
clear  that  the  money  having  been  received  by  the  partnership,  the 
amount  became  a  partnership  debt  whether  all  the  individual  partners 
were  or  were  not  privy  to  the  sale. 

In  Devaynes  v.  Noble,  Baring's  case,  (c)  the  firm  was  held  liable  for 
stock  of  its  customers  standing  in  the  name  of  one  of  the  partners  of 
the  firm  and  wrongfully  sold  out  by  him.     For  the  stock  was  stand- 

(y)  Although  solicitors  who  are  part-  Thus,  the  tortious  conversion  of  succes- 
ners  are  responsible  for  the  acts  of  each  sion  property  by  a  commercial  firm  will 
other,  the  court  will  not  exercise  its  sum-  reader  the  members  liable  m  solido.  Bird- 
mary  jurisdiction  against  a  solicitor  to  sail  v.  Bemiss,  2  La.  Ann.  449. 
whom  personally  no  blame  is  attributable.  In  Gordon  v.  Coolidge  (1  Sumn.  (U.  S.) 
See,  Re  Lawrence,  2  Sm.  &  G.  367  ;  Ex  537)  an  assignment  was  made  by  a  debtor 
parte  Gould,  2  Mont.  &  A.  48  ;  Dixon  v.  for  the  benefit  of  his  creditors  to  a  firm  of 
Wilkinson,  4  Drew.  614,  and  4  DeG.&  J.  two  attorneys  as  trustees,  one  of  whom 
508;  and  Re  Ford,  8  Dowl.  684.  But  assented  to  the  assignment  at  the  time,  in 
where  a  firm  of  solicitors  are  the  solicitors  the  absence  of  the  other.  Selcl,  that  the 
on  the  record,  see  Norton  v.  Cooper,  3  Sm.  assent  of  the  latter  must  be  presumed,  un- 
&  G.  375.  less,  upon  notice,  he  refused  to  accept  the 

(z)  See  St.  Aubyn  v.  Smart,  ubi  sup.  trust,  and  gave  notice  of  his  refusal  to  the 

(a)  See  infra,  propositions  3  and  5,  as    debtor ;  especially  where  he  and  his  part- 
to  the  importance  of  this  qualification.  ner   proceeded  to  act   under   the  assign- 

39.  Money  in  firm's  custody  in  ment,  by  a  private  conditional  agreement 
course  of  business.— A  partner,  inno-  between  them,  as  to  giving  a  priority  to 
cent  in  fact,  may  be  charged  for  a  conver-  certain  attachments  made  by  them  in 
sion  by  his  copartners,  in  the  regular  line  favor  of  certain  creditors,  which  agree- 
of  firm  buf^iness,  the  profits  and  commis-  ments  were  unknown  to  the  debtor, 
sions   thereon    having   gone  to  the    firm        {b)  1  Mer.  575. 

account.     Castle  v.  Bullard,  23  How.  (U.        (c)  1  Mer.  611 ;  see,  too,  Warde's  Case, 
S.)  172.  Id.  624,  and  VuUiamy  v.  Noble,  3  Mer.  593. 

237 


153*  LIABILITY   FOR   MONEY   MISAPPLIED.  [bOOK   II., 

ing  ill  lii.-s  name  alone,  in  accordance  with  the  ordinary  practice  of  the 
firm ;  tiie  prodnce  of  the  sale  of  the  stock  had  been  received  by  the 
firm,  and  had  thus  become  a  partnership  debt,  and  the  firm,  in  the 
accounts  rendered  by  *it  to  its  customer,  had  falsely  repre- 
sented the  stock  as  still  standing  in  the  name  of  the  partner  •- 
who  had  sold  it  and  had  given  credit  for  the  dividends  as  if  the  stock 
had  still  been  there. 

In  Ex  parte  Biddulph((^)  trust  money  in  the  hands  of  a  firm  of 
bankers  was  drawn  out  and  misapplied  by  one  of  the  firm,  and  it  was 
held  that  all  the  i)artuers  were  liable  to  make  it  good. 

In  Sadler  v.  Lee(e)  the  members  of  a  banking  firm  were  authorized 
jointly  and  severally  to  sell  out  stock  standing  in  the  name  of  a  cus- 
tomer, and  one  of  the  partners  exercised  the  power  and  sold  out  the 
stock,  and  the  firm  was  credited  with  the  proceeds  of  the  sale.  These 
were  afterwards  misapplied  by  one  of  the  partners,  and  it  was  held 
that  the  firm  was  answerable  for  the  money. 

Another  well-known  case  illustrating  the  same  principle  is  Blair  v. 
Bromley.  (/)  There  two  persons  were  in  partnership  as  solicitors.  A 
client  entrusted  one  of  them  with  money  to  invest  on  mortgage,  and 
was  told  by  him  that  it  had  been  invested,  whereas,  in  truth,  the 
partner  who  had  received  the  money  had  misapplied  it.  For  many 
years  the  client  was  regularly  paid  interest  by  the  solicitor  who  at- 
tended to  the  matter,  and  the  fraud  was  not  discovered  until  he  be- 
came bankrupt.  The  other  partner,  who  knew  nothing  whatever  of 
the  fraud,  was  nevertheless  held  liable  to  make  good  the  money.  It 
had  been  placed  to  the  partnership  account  at  the  bankers  of  the  firm. 
The  representation  that  it  had  been  duly  invested  was  within  the  scope 
of  the  duty  of  one  partner  with  reference  to  the  transaction  in  ques- 
tion, and  it  was  held  that  the  innocent  partner  could  not  divest  him- 
self of  his  liability  by  showing  that  he  had  no  control  over  the 
account  at  the  bankers,  and  did  not  in  fact  attend  to  the  monetary 
transactions  of  the  firm. 
*i  "11  ^^^  ^^  Ribeyre  v.  Barclay  ((/)  the  defendants  were  in  part- 
*nership  as  stockholder^^  and  were  in  the  habit  of  receiving 
moneys  from  the  friends  and  connections  of  the  firm,  and  of  the  in- 

(d)  3  De  G.  &  S.  587.  also,  Eager  i;.  Barnes,  31  Beav.  579,  a 

(e)  6  Beav.  324.  somewhat  similar  case. 

(/)  6  Hare  542,  and  2  Ph.  354.     See,        (g)  23  Beav.  107 ;    compare  this   case 

238 


CHAP.  I.,  §  III.]  DOCTIUNES    OF    AGENCY.  154* 

dividual  partners  for  the  purposes  of  investment.  They  also  seem  to 
have  been  in  the  habit  of  keeping  for  their  customers  the  securities 
on  which  the  investments  were  made.  The  plaintiff  had  some  Portu- 
guese bonds  held  by  one  of  the  partners  for  the  plaintiff  as  a  customer 
of  the  firm.  The  plaintiff  married,  and  these  bonds  were  assigned  to 
trustees,  of  whom  that  partner  was  one.  The  bonds  remained  iji  his 
custody  as  before,  and  were  in  fact  deposited  (and,  as  it  seemed,  with 
other  securities  belonging  to  other  customers)  with  the  bankers  of  the 
firm.  The  bonds  were  afterwards  converted  by  the  same  partner  into 
other  bonds,  which  were  deposited  as  the  first  had  been.  He  acted  in 
this  matter  as  a  stockbroker,  in  conformity  with  the  usual  course  of 
business  of  the  firm,  and  advised  the  plaintiff  from  time  to  time  in 
the  name  of  the  firm  of  what  had  been  done.  The  bonds  were  after- 
wards misapplied  by  him.  It  was  held  that  they  were  originally 
clearly  in  the  custody  of  the  firm,  and  not  in  the  custody  of  one  only 
of  its  members,  simply  as  trustee.  It  was  further  held  that  the  as- 
signment of  the  bonds  did  not  take  them  out  of  the  custody  of  the 
firm,  and  that  the  firm  was  therefore  liable  for  the  loss  consequent 
on  their  unauthorized  removal. 

In  the  same  case  the  firm  was  held  liable  for  the  loss  of  other  bonds 
and  securities  bought  by  them  for  the  plaintifi",  and  left  in  their  cus- 
tody in  the  usual  way,  and  for  money  borrowed  in  the  name  of  the 
firm,  but  from  which  the  firm  derived  no  benefit ;  and  the  fact  that 
the  plaintiff  dealt  only  with  one  partner  was  held  immaterial,  the 
business  transacted  being  the  ordinary  and  regular  business  of  the 
firm,  and  appearing  as  such  in  its  books  and  accounts. 

Principle  of  foregoing  cases. — The  principle  of  these  cases  is  that 
the  firm  has,  in  the  ordinary  course  of  its  business,  obtained  possession 
of  the  property  of  other  people,  and  has  then  parted  with  it  without 
their  authority.  Under  such  circumstances,  the  firm  is  responsible, 
and  the  fact  that  the  property  has  been  improperly  procured  and 
placed  in  the  custody  of  the  firm  by  one  of  the  partners  does  not 
lessen  the  liability  of  the  firm,  for  whether  the  firm  is  or  is  not  liable 
for  the  original  fraud  by  which  the  property  *got  into  its  ^ 
hands,  it  is  responsible  for  the  subsequent  misapplication  ^ 
thereof  by  one  of  its  members. 

with  Ex  parte  Eyre,  1  Ph.  227  ;  Bishop  v.    Coomer  r.  Bromley,  5  De  G.  &  S.  532,  no- 
The   Countess  of  Jersey,  2   Drew.   143 ;    ticed  infra,  p.  *159. 

239 


155*  LIABILITY    FOR    MONEY    MISAPPLIED.  [bOOK    IL, 

This  was  decided  in  the  cases  arising  out  of  the  notorious  Fauntle- 
roy  forgeries,  (/i)  Fauntleroy,  who  was  a  partner  in  the  banking 
house  of  Marsli  &  Co.,  forged  powers  of  attorney  for  the  sale  of  stock 
belonging  to  the  customers  of  the  bank.  Marsh  &  Co.  had  an  ac- 
count with  Martin  Stone  &  Co.,  and  the  broker  who  sold  out  the 
stock  under  the  forged  powers  of  attorney  remitted  the  proceeds  of  the 
sale  to  the  credit  of  Marsh  &  Co.  with  Martin  Stone  &  Co.  Faunt- 
leroy then  drew  out  these  moneys  by  a  cheque  signed  by  him  in  the 
name  of  his  firm,  and  applied  them  to  his  own  use.  The  firm  of 
Marsh  &  Co.  was,  however,  held  liable  for  them,  although  none  of 
the  partners  except  Fauntleroy  had  any  hand  in  his  forgeries  or  frauds, 
or  in  fact  knew  anything  of  what  had  taken  place.  The  liability  of 
the  firm  was  based  ujjon  the  ground  that  to  sell  stock  for  its  customers 
and  to  receive  the  proceeds  of  the  sale,  fell  within  the  scope  of  its 
business ;  that  the  sale  took  place  and  the  money  was  received  in  the 
usual  way ;  that  the  fraud  of  Fauntleroy  in  the  subsequent  appropria- 
tion of  the  money  aiForded  no  defence  after  the  money  had  once  been 
in  the  custody  of  the  firm,  and  that  if  the  other  partners  knew  noth- 
ing of  the  receipt  of  the  money,  they  might  have  known  it,  and 
would  have  have  ascertained  the  source  from  which  it  had  been 
derived,  if  they  had  used  ordinary  diligence  and  had  not  placed  such 
implicit  confidence  in  their  copartner,  (i) 

3.  Liability  of  firm  for  money  received,  but  not  in  ordinary  course 
of  business. — If  a  partner,  in  the  course  of  some  transaction  uncon- 
nected with  the  business  of  the  firm,  or  not  within  the  scope  of  such 
*i  ^fil  ^business,  obtains  money  and  then  misapplies  it,  the  firm  is 
-'  not,  without  more,  {j)  liable  to  make  good  the  loss.  (Jc)  40 

(h)  Stone  V.  Marsh,  6  Barn.  &  C.  551,  attorney  were  forged.     In  Marsh  v.  Keat- 

and  Ey.  &  M.  364 ;  Keating  v.  Marsh,  1  ing,  they  do  not  seem  to  have  known  any- 

Mont.  &  A.  582 ;    Marsh  v.  Keating,   1  thing  either  of  the  sale  of  the  stock  or  of 

Bing.  N.  C.  198,  and  2  CI.  &  F.  250 ;  Ex  the  receipt  of  the  proceeds  of  the  sale, 

parte  Bolland,  Mont.   &  M.  315,   and   1  Compare,  as  to  the  receipt  of  the  money 

Mont.  &  A.  570 ;  Hume  v.  Bolland,  Ry.  &  by  the  firm,  the  cases  cited  in  the  next 

M.  371,  and   1  Cromp.  &  M.  130.     This  four  pages. 

last  case  is  hardly  consistent  with  Stone  n.  (j)    As  to  the  effect  of  knowledge  on 

Marsh,  Marsh    v.   Keating,  or  Ex   parte  the  part  of  the  other  partners,  see  Cleather 

Bolland.  r.  Twisdeu,  28  Ch.  D.  340,  noticed  infra, 

{i)  In  Stone  v.   Marsh   and    Ex  parte  and  proposition  5,  hifi-a. 

Bolland,  Fauntleroy's  partners  did  know  (k)  See,  also,  proposition  4,  infra. 

that  the  stock  was  sold  by  their  broker,  40.  Money  obtained  by  one  partner, 

but   did   not   know   that   the   powers   of  but  not  in  the  course  of  the  firm  busi- 

240 


CHAP.  I.,  §  III.]  DOCTRINES    OF   AGEXCY.  156* 

In  Harman  v.  Johnson  {I)  one  of  several  solicitors  was  entrusted 
with  money  for  the  purpose  of  investing  it  on  mortgage  when  a  good 
opportunity  offered.  He  misapplied  it,  and  it  was  held  that  his  copart- 
ner was  not  liable,  inasmuch  as  there  was  no  evidence  to  show  that  it 
was  part  of  the  business,  either  of  the  firm  in  question  or  of  solicitors 
generally,  to  act  as  scriveners,  i.  e.,  as  depositaries  of  money  waiting 
for  investment.  The  court  intimated  that  if  it  had  been  shown  that 
the  money  was  given  to  the  defaulting  solicitor  for  the  purpose  of 
being  invested  on  some  specified  mortgage,  his  copartner  would  have 
been  liable  for  its  misapplication. 

In  Plumer  v.  Gregory  [m]  one  of  a  firm  of  solicitors  borrowed  money, 
without  the  knowledge  of  his  copartners,  from  a  client,  saying  that  the 
firm  wanted  to  lend  it  to  another  client  on  mortgage.  The  other  part- 
ners were  held  not  liable  for  this  money,  although  two  of  them  had 
borrowed  money  from  the  same  client  before. 

In  Cleather  v.  Twisden  (w)  bonds  payable  to  bearer  were  placed  for 
safe  custody  by  trustees  in  the  hands  of  one  of  a  firm  of  solicitors, 
and  he  misappropriated  them.  The  other  partners  were  held  not 
liable,  it  being  no  part  of  their  business  to  accept  such  securities  for 
safe  custody,  and  they  not,  in  fact,  knowing  that  their  partner  had 
them.  The  decision  would  have  been  the  other  way  if  it  had  been 
proved  that  the  innocent  partners  had  in  fact  known  that  the  bonds 

ness. — Where  an  administrator,  who  is  a  ignorant   of  the   conversion.     Palmer   v. 

member  of  a  partnership,  applies  to  the  Scott,  68  Ala.  380. 

partnership    concerns    money   which  be-        Where  a  firm  bought  and  paid  for  cer- 

longs  to  the  estate  of  his  intestate,  and  tain  property,  and  the  vendor  deposited 

afterwards  gives  the  note  of  the  firm  to  the  money  with  one  of  the  members  of  the 

the  creditor  of  the  intestate,  to  whom  such  firm,   to   be   held    until   the    purchasers 

money    was  due,   in   discharge    of,  such  should  be  satisfied  with  the  title — Held, 

creditor's  claim  on  the  estate  of  the  intes-  that  in  the  absence  of  any  knowledge  of 

tate,  the  firm  is  bound  to  pay  the  note,  or  connection  with  such  deposit  on  the 

although  the  money  was  not  in  the  hands  part  of  the  other  members  of  the  firm  no 

of  the   firm  when    the   note  was   given,  responsibility  attached  to  them  in  conse- 

Eichardson  v.  French,  4   Mete.   (Mass.)  quence  thereof.     Battle  v.  Street  (Tenn.), 

577.  2  S.  W.  Eep.  384. 

Where  an  agent  collected  money  of  his        {I )  2  El.  &  B.  61. 
principal  and  mingled  it  with  the  money        (wi)  Plumer  v.  Gregory,  18  Eq.  621,  aa 

of  a  firm  in  which  he  was  a  partner,  and  to  the  £1700.     Compare  this  and  the  last 

the  money  was  used  by  the  firm,  it  was  case  with  Willett  v.  Chambers,  and  other 

held  that  this  created  a  partnership  lia-  cases  cited  ante  p.  *151,  note  (m). 
bility,   although   the   other   partner  was        (n)  28  Ch.  D.  340. 

241  16 


156*  LIABILITY    FOR    MONEY    MISAPPLIED.  [bOOK    II., 

wore  in  the  custody  of  their  copartner  as  representing  tlie  firm.     Had 

such  knowledge  been  proved,  they  would  have  been  held  to  have  had 

the  bonds  in  their  own  custody,  and  would  have  been  liable  for  them,  (o) 

The  case  of  Sims  v.   Brutton(j3)  must  be  referred  to  this  head 

*if  its  authority  is  to  be  upheld.     There  the  defendants,  Brut-   ^.^^  ^„ 
T  .  .  .  157 

ton  and  Clipperton,  were  in  partnership  as  solicitors.     Brut-   ^ 

ton  received  £500  from  a  client  to  invest  on  a  mortgage,  and  the 
money  was  duly  invested.  The  mortgage  deed  remained  with  the 
defendants,  and  the  money  secured  by  it  was  ultimately  repai<l  to 
Cli])perton,  who  tluiu  gave  up  the  deed  to  the  mortgagor.  Shortly 
after  this,  Clipperton  re-lent  £300,  part  of  the  £500,  and  again 
received  back  the  mortgage  deed  as  a  security,  and  ultimately  this 
£300  was  repaid  to  him  and  the  mortgage  deed  was  again  delivered 
up  to  the  mortgagor.  Clipperton  had  no  authority  to  receive  payment 
of  the  £500  from  the  mortgagor,  nor  to  relend  the  £300,  nor  to 
receive  repayment  of  it,  and  he  acted  throughout  the  whole  of  these 
transactions  without  the  knowledge  of  his  copartner  or  of  the  mort- 
gagee, the  client  of  the  firm.  The  books  of  the  firm,  however, 
showed  the  receipt  of  the  £500  in  the  first  instance,  its  loan  and  repay- 
ment, and  also  the  loan  and  repayment  of  the  £300.  The  client  was, 
moreover,  credited  from  first  to  last  with  the  receipt  of  interest  on  the 
whole  £500,  and  was  debited  with  the  same  interest,  which  was,  in 
fact,  regularly  paid  to  his  agent.  Clipperton  misapplied  the  whole 
£500,  and  the  court  held  that  Brutton,  his  partner,  was  not  liable  to 
make  it  good.  The  defendants,  it  was  said,  discharged  their  duty  by 
laying  out  the  money  as  directed,  and  they  had  no  authority  to  receive 
it  back.  Therefore,  the  repayment  to  Clipperton,  though  treated  by 
him  as  a  partnership  transaction,  was  not  so  in  point  of  law,  and  did 
not  create  any  partnership  responsibility.  The  entries  in  the  books 
were  only  evidence  of  knowledge  on  tli«e  part  of  Brutton,  and  the  case 
stated  for  the  opinion  of  the  court  expressly  found  that  he  had  no 
knowledge  of  the  facts. 

Upon  this  case  it  is  to  be  observed  that  if,  as  appears  to  have  been 
the  case,  the  £500,  when  paid  off,  was  placed  to  the  credit  of  the  firm 
with  its  bankers,  the  decision  is  difficult  to  reconcile  with  Stone  v. 
Marsh  and  ]Marsh  v.  Keating,  {fi) 

(o)  See  infra,  proposition  5,  p.  -160.  ley,  5  De  G.  &  S.532,  noticed  infra,  p.  *159. 

(p)  5  Ex.  802.  See,  also,  CoomerD.Brom-        [q)  The  statute  of  limitations  afforded 

242 


€HAP.  I.,  §  in.]  DOCTRIXES    OF    AGENCY.  157* 

4.  Liability  of  firm  for  frauds  of  partner   aollng  on  his  own  ac- 
count.— A  fraud   committed  by  a  partner  whilst  acting  on  his  own 
separate  account  is  not  imputable  to  the  firm,  although  had  he  not 
*1  ^9,1   *''^®^"  connected  with  the  firm  he  might  not  have  been  in  a 
-'  position  to  commit  the  fraud.  41 

This  is  little  more  than  another  mode  of  stating  proposition  3,  and 
the  cases  just  alluded  to  may  also  be  referred  to  under  this  head.  In 
addition  to  them,  the  following  deserve  notice  : 

In  Ex  parte  Eyre  (r)  the  customer  of  a  firm  of  bankers  deposited 
with  them  a  box  containing  securities  belonging  to  himself,  and  he 
authorized  one  of  the  firm  to  take  out  some  of  the  securities,  replacing 
others,  however,  in  their  place.  The  partner  so  authorized,  after  ob- 
taining the  securities  he  was  authorized  to  take,  and  substituting  others, 
clandestinely  withdrew  these  last  and  applied  them  to  his  own  use. 
It  was  held  that  the  firm  was  not  liable  for  this  act,  and  was  not  bound 
to  make  good  the  consequent  loss,  for  it  did  not  appear  that  the  firm 
had  any  authority  to  open  the  box  or  to  examine  its  contents,  and  the 
abstraction  of  the  securities  was  a  tortious  act  committed  by  one  part- 
ner, who  had  been  specially  authorized  to  open  the  box  and  who  took 
out  the  securities,  not  for  the  partnership  nor  for  any  partnership 
object,  but  in  his  separate  character  and  for  his  own  individual  and 
separate  purposes. 

In  Bishop  v.  The  Countess  of  Jersey  (s)  one  of  a  firm  of  bankers 
advised  the  plaintiff,  a  customer  of  the  bank,  to  sell  out  some  stock, 
telling  her  that  there  was  an  opportunity  to  place  out  £5000  on  a  good 
security  at  five  per  cent.,  to  be  given  by  his  son.  She  accordingly  au- 
thorized the  sale,  and  the  money  produced  was  placed  to  her  credit  at 
the  bank.  She  then  drew  a  cheque  for  £5000,  which  she  gave  to  the 
partner  with  whom  she  had  been  in  communication.  ISTo  security  was 
ever  given,  the  money  was  lost,  the  partner  in  question  absconded. 

a  good  defence  to  the  action  in  Sims  v.  wick,  5  Me.  295.     But  compare  Manufac- 

Brutton.     Tlie  propriety  of  the  decision  turers',  &c.,  Bank  «.  Gore,  15  Mass.  75,  81; 

in  that  respect  is  untouched  by  the  obser-  Boardman  v.  Gore,  Id.  331 ;  Hawkins  v. 

vations  in  the  text.  Appleby,  2  Sandf.  (N.  Y.)  421 ;  Reynolds 

41.  Frauds  of  partner  acting  on  his  v.  Waller,  1  Wash.  (Va.)  164. 

own  account. — The  rule  stated  in   the  (?•)  1  Ph.  227,  affirming  S.  C,  2  Mont., 

text  is  supported  by  a  number  of  Ameri-  D.  &  D.  66. 

can  decisions,  among  which  see  Pierce  v.  (s)  2  Drew.  143. 
Jackson,  6  Mass.  242 ;  Sherwood  v.  Mar- 

243 


[*159 


158*  LIABILITY    FOR    ^fOXEY    ^[ISAPPLIED.  [bOOK    II.^ 

Interest,  liowever,  on  the  £5000  was  for  some  time  placed  to  the  credit 
of  the  phiintiff  in  her  account  with  the  bank,  but  by  whom  did  not 
appear.  The  other  partners  knew  nothing  of  what  had  taken  place 
until  after  the  fraud  had  been  committed,  and  it  was  held  that  they 
were  not  answerable.  The  transactions  had  nothing  to  do  with  the 
business  of  the  partnership,  and  if  they  had  not  taken  place  at  the 
bank  there  would  have  been  no  pretence  for  saying  that  the  one 
*partner  was  acting  otherwise  than  in  a  separate  affair  of  his 
own. 

A  more  difficult  case,  but  one  turning  mainly  on  the  same  principle, 
is  to  be  met  with  in  Coomer  v.  Bromley,  [t)  There,  the  defendants, 
William  and  Joseph  Bromley,  were  solicitors.  The  plaintiffs  were 
their  clients,  and  were  trustees  of  some  navy  five  per  cent,  annuities, 
in  which  they  were  themselves  beneficially  interested  for  their  lives. 
William  Bromley  was  associated  by  the  plaintiffs  with  them  as  trustee 
of  these  annuities.  Upon  their  reduction  from  five  to  four  per  cent.,  the 
annuities  were  sold  at  the  request  of  the  plaintiffs,  and  it  was  arranged 
that  the  money  arising  from  the  sale  should  be  invested  on  mortgage 
to  be  taken,  with  the  plaintiffs'  consent,  in  William  Bromley's  name 
alone.  The  annuities  were  sold ;  the  money  arising  from  the  sale 
found  its  way  to  the  credit  of  the  firm  at  its  banker's,  but  was  not  in- 
vested on  mortgage  as  intended,  and  was  apparently  used  as  partner- 
ship money.  William  Bromley  pretended  that  he  had  invested  the 
money,  and  he  paid  interest  accordingly.  Ultimately,  and  with  the 
plaintiffs'  knowledge,  a  mortgage,  of  which  William  Bromley  was  sole 
mortgagee,  was  appropriated  as  a  security  for  the  money  in  question. 
This  mortgage  was  sufficient  in  point  of  value  to  cover  the  amount 
realized  by  the  sale,  and  was  for  that  amount  less  a  few  pounds,  which 
the  plaintiffs  divided  between  them.  The  security  thus  appropriated 
was  afterwards  realized  by  William  Bromley,  and  he  misapplied  the 
money,  but  it  was  not  placed  to  the  credit  of  the  firm,  nor  did  Joseph 
Bromley  know  anything  of  its  receipt  or  application.  Under  these 
circumstances  it  was  held  that  Joseph  was  not  liable  to  the  plaintiffs 
for  the  loss,  for  the  plaintiffs  dealt  with  William  Bromley  as  a  trustee, 
and  not  as  a  partner  ;  they  authorized  him  to  take  a  mortgage  in  his 
own  name  alone ;  they  acquiesced  in  the  appropriation  to  their  money 

(0  5  De  G.  &  S.  532.     See,  too,  Sims  v.    Compare  St.  Auhyn  v.  Smart,  5  Eq.  183, 
Brutton,  5  Ex.  802,  noticed  ante  p.  *156.    and  3  Ch.  646. 

244 


CHAP.  I.,  §  III.]  DOCTRINES   OF   AGENCY.'  159* 

of  a  security  which  was  of  sufficient  value,  and  Joseph's  duty  was 
then  at  an  end.  The  plaintiffs  could  not  hold  him  liable  for  the  losa 
of  the  mortgage  money  arising  subsequently  from  the  fraud  of  the 
mortgagee. 

*In  these  cases  it  will  be  observed  that  although  the  money 
-•  in  question  had  at  one  time  been  in  the  custody  of  the  firm, 
such  was  not  the  case  when  the  money  was  misapplied.  This  circum- 
stance distinguishes  the  cases  last  referred  to  from  DeE-ibeyre  v.  Bar- 
clay {u)  and  other  cases  of  that  class,  the  leading  facts  in  which  have 
been  already  stated,  {v) 

5.  Liability  of  firm  for  trust  moneys. — If  a  partner,  being  a  trustee, 
improperly  employs  the  money  of  his  oestui  que  trust  in  the  partner- 
ship business  or  in  payment  of  the  partnership  debts,  this  alone  is  not 
sufficient  to  entitle  the  cestui  que  trust  to  obtain  repayment  of  his 
money  from  the  firm.  42 

In  Ex  parte  Apsey  ix)  one  of  two  assignees  in  bankruptcy  was  in 

(u)  23  Beav.  107.  credit  of  the  firm,  and  the  proof  fails  to 

{v)  Ante  p.  *153.  show  that  it  was  invested  as  agreed,  the 

42.  Liability  of  firm  for  trust  moneys,  firm  will  be  liable.    Kerr  v.  Sharp,  83  111. 

— The  general  rule  undoubtedly  is  that  199. 

where  one  partner  holds  money  in  trust        After  a  dividend  is  declared  by  a  parl- 

for  another,  or  borrows  money  on  his  in-  nership,  and  the  partner  holding  the  share 

dividual  credit,  and  applies  it  to  the  use  of  an  absent  member,  under  a  resolution 

of  the  firm,  this  does  not  make  the  original  of   the  company,   pays  it  over  in  extin- 

creditor  a  creditor  of  the  firm,  unless  it  is  guishment  of  a  debt  due  the  company  by 

applied  with  the  knowledge  and  privity  another  partner  who  promised  to  settle 

of  his  copartners.     Jaques  v.  Marquand,  with  the  absent  partner,  all  the  members 

6  Cow.  (N.  Y.)  497  ;  Logan  v.   Bond,  13  present,  not  dissenting  from  the  resolu- 

Ga.  192;  Tallmadge  v.  Penoyer,  35  Barb,  tion,  are  jointly  liable  for  the  amount  of 

(N.  Y.)  120;  Willett  v.  Stringer,  17  Abb.  the  dividend.     Peters  v.  Horbach,  4  Pa. 

(N.  Y.)  Pr.  153 ;  Guillen  v.  Peterson,  9  St.  134.    S.  P.,  Wentworth  v.  Eaiguel,  9 

Phil.  (Pa.)  225.     But  where  such  money  Phil.  (Pa.)  275. 

is  used  for  firm  purposes,  with  the  consent        In  one  case,  however,  where  one  mem- 

of  all  the  partners,  but  without  the  con-  berof  a  firm  applied  to  its  business  money 

sent  of   the  owner   of  the   money,  such  which  he  held  as  agent  of  a  third  party, 

owner  may  elect  to  consider  the  firm  his  it   was    held   that   the    firm    was    liable, 

debtor,  instead  of  the  separate   partner,  whether  the  other  partners  knew  at  the 

Hutchinson  v.  Smith,  7  Paige  (N.  Y.)  26.  time  that  the  money  belonged  to   such 

S.  P.,  In  re  Jordan,    2  Fed.  Rep.  319.  party  or  not.     Welker  v.  Wallace,  31  Ga. 

Thus,  if  one  partner  in  a  real  estate  firm  362. 

receives   money   from   a    customer   with        {x)   3  Bro.  C.  C.   265.     See,  also.   Ex 

which  to  purchase  land,  and  passes  it  over  parte  White,  6  Ch.  397, 
to   his   partner,  who    deposits   it   to  the 

245 


160*  LIABILITY    FOR    MOXEY    MISAPPLIED.  [bOOK   IL^ 

partnersliiji,  and  lie  applied  part  of  the  assets  of  the  hanknipt  in  pay- 
ing partnorshi})  debts.  On  the  subsequent  bankruptey  of  the  partner- 
ship it  was  held  that  the  amount  so  applied  was  not  provable  against 
the  joint  estate. 

In  Ex  parte  Heaton  (y)  a  father  and  his  sons  were  partners;  the 
sons  were  trustees  of  a  will,  and  instead  of  applying  the  trust  moneys 
according  to  the  trust,  they  appropriated  them  to  partnership  pur- 
poses ;  but  on  the  bankruptey  of  the  partnership  it  was  held  that  the 
amount  of  the  moneys  so  appropriated  was  not  provable  against  the 
joint  estate  unless  it  could  be  shown  tiiat  they  were  employed  for  the 
use  of  the  partnership  trade  with  the  knowledge  of  the  father  that 
they  were  trust  funds,  and  an  inquiry  as  to  that  was  directed.  (2) 

It  may  at  first  sight  be  thought  that  these  cases  are  opposed  to 
Marsh  v.  Keating  and  the  other  authorities  before  referred  to,  [a]  in 
which  the  firm  was  held  liable  for  money  which  came  to  its  hands. 
But  in  those  cases  the  money  came  to  the  hands  of  the  firm  in 
the  ordinary  course  of  its  business ;  (6)  whilst  in  *the  cases  ^^ 
now  under  consideration  it  is  supposed  to  come  otherwise. 
Liability  must  therefore  attach  to  the  firm,  if  at  all,  on  wholly 
different  principles,  and  the  fact  that  the  firm  has  had  the  benefit  of 
the  trust  moneys  is  not  sufficient  to  render  it  responsible  for  them. 
To  be  liable,  the  firm  must  be  implicated  in  the  breach  of  trust,  and 
this  it  cannot  be  unless  all  the  partners  either  knew  whence  the  money 
came  or  knew  that  it  did  not  belong  to  the  partner  making  use  of  it. 
Knowledge  on  the  part  of  one  partner  will  not  affect  the  others,  for 
the  fact  to  be  known  has  nothing  to  do  with  the  business  of  the  firm, 
and  the  case  of  Ex  parte  Heaton,  already  referred  to,  shows  that  in 
cases  of  this  kind  the  liability  as  for  a  breach  of  trust  does  not  extend 
to  those  who  are  ig-norant  of  the  matters  before  mentioned. 

Where  firm  hioics  of  the  breach  of  trust. — But  if  knowledge  of 

(y)  Buck  386.  their  customers,  and  to  receive  and  remit 

(z)  Ex  parte  Clowes,  2  Bro.  C.  C.  595,  the  proceeds ;  and  the  money  for  which 

is  not  opposed  to  the  cases  in  the  text,  for  the  firm  was  held  answerable  did  arise 

there  the  joint  and  separate  estates  were  from  the  sale  of  the  stock  of  a  customer, 

consolidated.  though  it  was  sold  under  a  forged  power 

(a)  Ante  pp.  *152-*155.  of  attorney  ;    and    although  Fauntleroy'* 

(6)  This  may  be  thought  incorrect  with  partners  knew  nothing  of  the  receipt  of 

respect  to  Marsh  v.  Keating  ;  but  it  was  the  money,  their  ignorance  was  considered 

the   business  of  the   firin    there    to   sell,  culpable  and  of  no  avail. 

through  their  broker,  stock  belonging  to 

246 


CHAP.  I.,  §  III.]  DOCTRINES   OF    AGENCY, 


lor 


these  matters  can  be  imputed  to  the  otlier  partners,  if  they  know,  or 
ought  to  be  treated  as  knowing,  that  trust  moneys  are  being  employed 
in  the  partnership  business,  they  will  be  held  bound  to  see  that  the 
trust  to  which  the  money  is  subject  authorizes  the  use  made  of  it,  and 
will  be  answerable  for  a  breach  of  trust  in  case  of  its  misapplication 
or  loss,  (c)  It  is  important  to  bear  this  in  mind  when  one  partner  has 
died  ;  for  if  the  surviving  partners  deal  with  his  property,  knowing 
that  it  belongs  to  his  estate,  knowledge  of  the  trust  on  which  the  prop- 
erty is  held  will  be  imputed  to  them,  and  they  may  be  thus  involved  in  all 
the  consequences  of  a  breach  of  trust,  {d)  But  this  doctrine  can  hardly 
extend  to  the  case  of  incoming  partners  who  do  nothing  except  leave 
matters  as  they  find  them  when  they  enter  the  firm,  (e)  43 

Liability  for  breach  of  trust  joint  and  several. — If  partners  are  im- 

(c)  See  Ex  parte  Woodin,  3  Mont ,  D.  his  debt  against  A,  and  that  B  was  entitled 
&  D.  399  ;  Ex  parte  Poulson,  De  G.  79  ;  to  recover  his  proportion  of  all  the  money- 
Ex  parte  Watson,  2  Ves.  &  B.  414  ;  Smith  received  on  account  of  the  claim.  Van- 
V.  Jameson,  5  T.  K.  601 ;  Keble  v.  Thomp-  derwick  v.  Summerl,  2  Wash.  (U.  S.)  41. 
son,  3  Bro.  C.  C.  112,  and  compare  Ex  One  partner  took  money  from  the  part- 
parte  Geaves,  8  De  G.,  M.  &  G.  291  ;  Ex  nershipfunds.which  he  put  into  anew  part- 
parte  Barnewall,  6  De  G.,  M.  &  G.  801  ;  nership.  iZeW,  that  upon  the  insolvency  of 
Ex  parte  Burton,  3  Mont.,  D.  &  D.  364.  the  new  partnership,the  former  partnership 

(d)  See  infra,  book  IV.,  ch.  3,  §  3.  could  not  follow  the  funds  so  taken,  so  as 

(e)  See  Twyford  v.  Trail,  7  Sim.  92.  to  give  it  a  priority  over  other  creditors. 
43.  The  firm  must  know  of  the  breach    Kamsay  v.  Deas,  2  Desaus.  (S.  C.)  239. 

of  trust.— If  funds  of  a  married  woman.  The  rule  allowing  trust  property  to  be 

held  in  trust  under  the  code,  by  her  hus-  followed  into  whatsoever  hands  it  goes, 

band,  are  mingled  by  him  with  the  funds  with  notice  of  the  trust,  has  been  held  not 

of  a  partnership  of  which  he  is  a  member,  to  apply  where  an  officer  of  a  bank,  who 

the    partnership  funds    are   not   charged  was  also  a  member  of  a  partnership,  with- 

with  the  trust,  either  during  the  life  of  the  out  due  security  lent  to  his  firm  funds  of 

husband  or  after  his  death.  Dent  v.  Slough,  the  bank,  which  became  mingled  with  the 

40  Ala.  518.  other  partnership  property.  Case  v.  Beau- 

A  and  B  were  jointly  interested  in  a  regard,  1  Woods  (U.  S.)  125. 

claim   which  was  ultimately  decided   in  Where  trust  property  is  contributed  to 

their    favor.      Before    the    decision    was  the  capital  stock  of  a  copartnership  at  the 

made,  A  formed   a  partnership  with  C,  time  of  its  formation,  by  a  trustee,  as  his 

and  the  money  was  remitted  to  the  firm  own   property,  without  notice  or  knowl- 

of  A  &  C,  and  placed  to  A's  credit  on  the  edge  to  the  other  copartners  of  the  fact  of 

books   of    the   firm.      A   died    insolvent,  its  being  trust  property,  the  case  is  closely 

largely  indebted  to  C.     It  appeared  that  analogous  to  its  sale  and  purchase,  with 

C,  previously  to  forming  the  partnership  little,  if  any,  difterence  in  principle.     In 

with  A,  had  full  knowledge  of  the  interest  such  case,  the  cestui  que  trust  seeking  his 

of  B  in  the  claim.     Held,  that  C  could  property  (thus  converted)  from  the  part- 

not  apply  the  money  to  the  satisfaction  of  nership  assets,  can   only  claim  and  take 

247 


162*  LIABILITY   FOR   MONEY    MISAPPLIED.  [bOOK    H., 

plicated  in  a  breach  of  trust,  their  liability  is  joint  and  several,  (/) 
and  a  decree  for  costs  will  be  made  *against  them  all,  although 
J  they  may  not  be  all  equally  to  blame.  (5^) 

Borrowing  trust  money. — But  persons  who  borrow  trust  money  from 
executors  or  trustees  are  only  liable  to  repay  it  with  interest ;  and 
although  the  lenders  may  have  no  authority  to  lend  the  money,  the 
borrowers  are  not  liable  to  account  for  the  profits  which  they  may 
have  realized  by  its  employment,  {h) 

Following  trust  money. — Although  a  firm  is  not  liable  to  make  good 
trust  money  applied  to  its  use  by  one  of  its  members  in  breach  of  the 
trust  reposed  in  him,  unless  the  firm  can  be  implicated  in  the  breach 
of  trust,  this  doctrine  will  not  preclude  a  cestui  que  trust  from  follow- 
ing his  own  money  into  the  hands  of  the  firm,  and  demanding  it  back, 
if  he  can  show  that  the  firm  still  has  it,  and  the  firm  did  not  come  by  it 
by  purchase  for  value  without  notice.  The  true  owner  of  money  traced 
to  the  possession  of  another  has  a  right  to  have  it  restored,  not  because 
it  is  a  debt,  but  because  it  is  his  money.  His  right  is  incidental  to 
his  ownership,  and  whether  the  money  is  traced  to  the  hands  of  a  sin- 
gle individual  or  to  the  hr...:ls  of  a  firm  is  wholly  immaterial.  (i)44 

therefrom  what  his  trustee  would  be  enti-  It,  however,  by  no  means  follows  that  on 

tied  to  take  had  he  been  vested  with  ab-  the  bankruptcy  of  the  firm  there  can  be 

solute  ownership  of  the  funds  invested  by  a    proof    against    the    joint    as   well    as 

him  in  the  copartnership,  instead  of  hold-  against  the  separate  estate.     See  Ex  parte 

ing  the  same,  as  he  did,  merely  in  trust.  Barnewall,  6  De  G.,  M.  &  G.  801.     This 

The  equities  of  the  copartners  of  a  trustee  will    be    discussed    in    the    chapter    on 

who  deal  with  him  as  the  absolute  owner  Bankruptcy. 

of  the  property  contributed  by  him  to  the        {g)  Lawrence  v.  Bowie,  2  Ph.  140. 
copartnership,  and  without  notice  or  knowl-        {h)  Vyse  v.  Foster,  L.  R  ,  7  H.  L.  318; 

edge  of  any  trust  relations  in  regard  to  the  Stroud  i'.  Gwyer,  28  Beav.  130. 
same,  are  paramount  to  those  of  the  deslui        (t)  See,  as  to  tracing  money,  Lewin  on 

qu.e  trust  in  regard  to  such  property.  Hoi-  Trusts  (8th  ed.),  ch.  30,  §  2 ;  Ee  Hallett's 

lemback  v.  Moore,  44  N.  Y.  Super.  Ct.  107.  Estate,  13  Ch.  D.  696  ;  Re  West  of  Eng- 

(/)  Re  Oxford  Benefit  Building  Soc,  land   Bank,   11   Ch.  D.   773;    Brown   v. 

35    Ch.    D.    502;    Imperial    Mercantile  Adams,  4  Ch.  764 ;  Pennell  r.  Defiell,  4 

Credit  Assoc,  v.  Coleman,  L.  R.,  6  H.  L.  De  G.,  M.  &  G.  372 ;  Frith  v.  Cartland,  2 

189 ;  Devaynes  v.  Noble,  Sleech's  case,  1  Hem.  &  M.  417  ;  Scott  v.  Surman,  Willes 

Mer.  563;  Baring's  Case,  Id.  614  ;  Sadler  400;  Taylor  v.  Plumer,  3  Mau.  &  S.  562  ; 

V.  Lee,  6  Beav.  324 ;  Brydges  v.  Branfill,  Small  v.  Attwood,  You.  507 ;  Pannell  v. 

12  Sim.  369  ;  Blair  v.  Bromley,  2  Ph.  359  ;  Hurley,  2  Coll.  241. 

Wilson  V.  Moore,  1  Myl.  &  K.  127,  337 ;       44.  See  Hollemback  v.  Moore,  cited  at 

Ex  parte  Poulson,  De  G.  79.     Compare  close  of  note  43,  supra. 
Ex  parte  Burton,  3  Mont.,  D.  &  D.  364. 

248 


CHAP.  I.,  §  III.]  DOCTRINES   OF   AGENCY.  162*-163* 

Liability  of  imrtner ships  for  the  false  i-epresentations  oftheii-  members. 
— In  considering  the  liability  of  a  firm  for  the  false  representations  of 
one  of  its  members,  it  is  necessary  to  distinguish  actions  for  mere 
damages  from  actions  to  rescind  contracts,  and  to  recover  money,  or 
property,  obtained  by  the  firm  by  misrepresentation. 

*  Actions  for  deceit. — An  action  for  damages  for  misrepre-  rt-ipo 
sentation  cannot,  as  a  general  rule,  be  maintained,  unless  the 
misrepresentation  is  fraudulent,  i.  e.,  false,  and  known  so  to  be  to  the 
person  making  it,  or  false,  and  made  recklessly,  without  any  reasonable 
ground  for  believing  the  statement  to  be  true,  (k)  There  is,  therefore, 
a  difficulty  in  holding  any  person  liable  to  such  an  action,  unless  actual 
fraud  by  him  can  be  proved.  On  the  other  hand,  it  is  difficult,  if  not 
impossible,  to  draw  any  sensible  distinction  between  the  case  of  fraud 
and  any  other  wrong ;  and  the  weight  of  authority  certainly  is  in 
favor  of  the  proposition  that  actions  for  damages  will  lie  against  a 
principal  for  the  fraud  of  his  agent  committed  in  the  course  of  his  em- 
ployment, and  for  his  principal's  benefit,  (l)  This  doctrine  obviously 
renders  a  firm  liable  in  an  action  of  damages  for  the  fraud  of  one  of 
its  members,  if  committed  by  him  in  transacting  the  business  of  the 
firm,  and  for  its  benefits  ;  but  not  otherwise,  (m) 

Other  actions  based  on  fraud. — Whatever  doubt  there  may  be  as  to 
the  liability  of  a  firm  to  an  action  for  deceit,  founded  on  the  fraudulent 
statement  of  one  of  its  members,  there  is  no  doubt  that  a  firm  can  be 
compelled  to  restore  property,  or  refund  money,  obtained  by  it  by  the 
misrepresentation  of  one  of  its  members.     Nor  in  such  a  case  is  it 

{k)  See  the  cases  in  the  next  two  notes,  leading  cases  on  this  subject.     As  will  be 

and  Pollock  on  Torts  236,  &c.     ()ne  ex-  seen  from  them,  opinions  on    the   point 

ception  is  obscured  by  being  referred  to  greatly  differ.     See  Pollock  on  Torts  83, 

an  implied  warranty.     Lewis  v.  Nichol-  and  the  next  note. 

son,  18  Q.  B.  503;  Collen  v.  Wright,  8  (m)  See   British  Mutual   Bank  Co.  v. 

El.  &  B.  647,  and  7  Id.  301  ;  Fairbank's  Charnwood  Forest  Rail.  Co.,  18  Q.  B.  D. 

Executors  v.  Humphreys,  18  Q.  B.  D.  54.  714,  where  the  defendants  were  held  not 

(/)  Barwick  v.  English  Jt.  St.  Bank,  L.  liable  for  a  fraudulent  statement  made  by 

R.,  2  Ex.  259 ;  Weir  v.  Bell,  3  Ex.  D.  their  secretary,  although  made  in  answer 

238 ;  Swire  v.  Francis,  3  App.  Cas.  106 ;  to  inquiries  which  it  was    his    apparent 

Houldsworth  v.  City  of  Glasgow  Bank,  5  duty    to     answer.      See,    also,    Barnett, 

App.  Cas.  317  ;    Mackay  v.  Commercial  Hoares  &  Co.  v.  South  Lon.  Tramways 

Bank  of  New  Brunswick,  I..  R.,  5  P.  C.  Co.,  18  Q.  B.  D.  815.     Compare  the  cases 

412  ;  Addie  v.  Western  Bank  of  Scotland,  in  the  last  note. 
L.  R.,  1  Sc.  &  Div.  App.  Cas.  145,  are  the 

249 


164*  LIABILITY    FOR    MONEY    MISAPPLIED.  [bOOK    IL^ 

necessary  to  prove  that  the  misrepresentation  was  fraudulent  as  well 
as  false,  (n) 

*In  Rapp  V.  Latham (o)  the  defendants,  Parry  and  Latham,. 
-'  were  in  partnership  as  wine  and  spirit  merchants,  and  the 
plaintiff  employed  them  to  purchase  wine  for  him  on  commission,  and 
to  sell  the  same  as  opportunity  might  offer.  Parry  was  the  active 
partner,  and  he  alone  attended  to  the  business  of  the  firm.  He  from 
time  to  time  represented  that  he  had  effected  purchases  and  sales  on 
the  plaintiff's  account,  and  he  remitted  to  the  plaintiff  balances  alleged 
to  be  due  to  him  on  the  pretended  sales.  The  plaintiff  had  advanced 
£126,000,  to  be  laid  out  in  the  purchase  of  wines,  and  he  had  re- 
ceived, on  account  of  pretended  resales  and  profits  arising  therefrom, 
£130,000.  There  was,  however,  a  considerable  sum  advanced  by  the 
plaintiff  still  unaccounted  for,  but  which  the  defendant  Parry  alleged 
had  been  invested  in  the  purchase  of  wine  at  so  much  a  pipe,  and  to 
recover  this  sum  the  action  was  brought  against  Parry  and  his  copart- 
ner. No  purchase  or  sale  had  ever  been  made  by  Parry,  and  the 
whole  of  his  representations  to  the  plaintiff  were  false  and  fraudulent. 
It  was  contended  by  Latham  that  he  was  not  affected  by  the  fraud  of 
his  copartner,  inasmuch  as  the  fictitious  purchases  and  sales  were  not 
in  the  ordinary  course  of  trade,  and  were  not,  therefore,  partnership 
transactions.  But  it  was  held  that  he  was  bound  by  the  acts  and 
representations  of  his  partner.  Parry,  and  could  not  be  allowed  to  say 
that  those  transactions  were  fictitious  which  Parry  had  represented  ta 
be  real.  The  plaintiff  was  adjudged  entitled  to  retain  the  £130,000 
remitted  to  him,  and  to  recover  back  the  advances  for  the  supposed 
purchases  in  respect  of  which  there  had  been  no  remittance. 

Again,  where  one  of  several  partners  in  a  patent  induced  the 
plaintiff,  by  false  and  fraudulent  representations,  to  pay  £3000  for 
part  of  the  profits  to  be  obtained  by  its  working,  all  the  partners 
were  held  liable  to  repay  the  money,  although  there  was  no  evidence 
of  fraud  on  the  part  of  more  than  one.  (p) 

*The  case  of  Blair  v.  Bromley,  (q)  already  alluded  to,  is  r^^n^ 
another  instance  in  point,  and  was  in  fact  decided  by  the  Lord 

(«)  See  Arkwright  v.  Newbold,  17  Ch.  pleaded. 

D.  301 ;  Kedgrave  v.  Hurd.  20  Ch.  D.  1.  (p)  Lovell  v.  Hicks,  2  You.  &  C.  Ex. 

(o)  2  B.  &  A.  795.     The  action  was  for  46  and  481. 

money  had  and  received,  and  a  set-off  was  (q)  5  Hare542,  and  2 Ph.  354,  ante p.*153. 

250 


CHAP.  I,,  §  III.] 


DOCTRINES    OF    AGENCY. 


165* 


Chancellor  expressly  upon  the  ground  that  persons  who,  having  a  duty 
to  perform,  represent  to  those  who  are  interested  in  the  performance 
of  it  that  it  has  b(!en  performed,  make  themselves  responsible  for  all 
consequences  of  non-performance ;  and  as  one  partner  may  bind 
another  as  to  any  matter  within  the  limits  of  their  joint  business,  so 
he  may  by  an  act  which,  though  not  constituting  a  contract  by  itself, 
is,  on  equitable  principles,  considered  as  having  all  the  consequences  of 
one.  45 


45.  False  representations  of  partner. 
— A  partnership  is  liable  for  the  false  and 
fraudulent  representations  of  one  of  its 
membei-s  relative  to  matters  falling  within 
the  scope  of  its  business,  and  much  more 
so  when  the  representations  are  true  ;  and 
an  innocent  third  party  has  a  right  to  re- 
gard such  representations  as  true,  and  to 
act  upon  them.  Stock  well  v.  Dillingham, 
,  50  Me.  442. 

Thus,  if  one  partner,  in  the  name  of  the 
firm,  makes  a  false  representation  as  to  a 
fact,  under  circumstances  precluding  him 
from  disputing  it,  the  firm  and  all  its 
members  will  be  equally  precluded,  if  the 
fact  is  of  such  a  kind  that  the  representa- 
tion would  be  binding  on  the  firm  if  true, 
and  concerning  the  truth  of  which  the 
firm  and  its  members  possess  peculiar 
means  of  knowledge,  not  enjoyed  by  the 
person  to  whom  the  representation  is 
made.  Coleman  v.  O'Neil,  1  N.  W.  Rep. 
846.  But  a  silent  partner,  not  knowing, 
or  assuming  to  know,  as  to  the  truth  or 
falsity  of  a  statement  of  the  condition  of 
the  firm  made  by  one  of  the  active  part- 
ners, to  a  person  who  purchased  an  in- 
terest in  the  firm  on  the  faith  of  such 
statement,  is  not  liable  to  such  person  for 
damages  arising  from  fraud  in  the  state- 
ment. Chamberlin  v.  Prior,  1  Abb.  (N. 
Y.)  App.  Dec.  338.  S.  P.,  Schwabacker  v. 
Eiddle,  84  111.  517.  So,  also,  where  one 
partner  makes  a  representation  to  a  per- 
son who  subsequently  purchases  commer- 
cial paper  of  the  firm  from  a  third  party, 
without  any  intimation  that  the  latter  in- 


tends to  make  such  purcha.se,  this  does  not 
render  the  partners  liable  individually, 
although  it  is  false.  In  Ee  Schuehardt, 
15  Bankr.  Reg.  161. 

One  of  a  firm  of  warehousemen  falsely 
represented,  to  a  person  who  advanced 
money  on  the  faith  of  such  representation^ 
that  the  one  to  whom  the  money  was  ad- 
vanced, and  to  whom  he  had  given  re- 
ceipts in  the  firm  name,  had  on  storage 
with  the  firm  a  certain  quantity  of  grain, 
Tiie  innocent  partners  were  held  bound 
by  the  representation,  and  responsible  for 
the  money  advanced.  Griswold  v.  Haven. 
25  N.  Y.  595. 

In  an  action  against  a  partnership  for 
fraudulent  representations  made  by  one 
of  its  members,  a  declaration  alleging 
that  he,  acting  in  behalf  of  the  firm,  pro- 
cured a  writ  of  replevin  to  be  brought  in 
the  name  of  a  third  person  and  signed  his 
own  name  to  the  replevin  bond  as  surety, 
and  that  he  declared  to  the  plaintiff",  who 
was  a  deputy  sherifl',  that  the  firm  was  re- 
sponsible, and  that  his  signature  to  the 
bond  bound  the  firm,  and  that  he  was 
authorized  by  the  firm  to  bind  it  by  his 
signature  alone,  and  thus  induced  the 
plaintiff  to  accept  the  bond  and  serve  the 
writ,  whereby  the  firm  obtained  and  dis- 
posed of  the  goods  replevied  for  its  own 
benefit,  and  that  judgment  was  rendered 
for  tlie  defendant  in  replevin,  and  the 
goods  were  not  returned,  and  the  firm  was 
not  bound  by  the  signature  to  the  bond, 
and  the  plaintiff  has  been  held  liable  for 
taking  an  insufficient  bond,  does  not  set 


251 


165*  LIABILITY   FOR   MONEY    MISAPPLIED.  [BOOK   II., 

False  accounts  rendered  by  one  partner. — Whether  accounts  ren^ 
deml  by  one  partner  in  the  name  of  the  firm  and  showing  that  money 
is  in  the  hands  of  the  firm,  when  in  truth  lie  has  misapplied  it,  are  to 
be  treated  as  representations  by  the  firm,  is  a  question  which  has  given 
rise  to  much  discussion  and  upon  which  the  cases  are  not  uniform. 
But,  upon  the  whole,  it  is  conceived  that  if  the  accounts  relate  to  mat- 
ters within  the  scope  of  the  partnership  business,  the  firm  is  bound  by 
them,  (r) 

Statutory  exceptions. — By  9  Geo.  IV.,  c.  14,  §  6,  a  firm  is  not  liable 
for  a  false  and  fraudulent  representation  as  to  the  character  or  solvency 
of  any  person  unless  such  representation  is  in  writing,  signed  by  all 
the  partners.  The  signature  of  one  partner  in  the  name  of  the  firm 
will  not  bind  any  one  but  himself,  [s) 

Liability  of  firm  for  untrue  statement  as  to  authority. — If  a  partner, 
acting  apparently  beyond  the  limits  of  his  authority,  untruly  re])re- 
sents  that  he  is  acting  with  his  copartners'  consent,  they  are  not  bound, 
by  this  representation,  nor  are  they  liable  for  what  may  be  done  on 
the  faith  of  it. 

Therefore,  in  Ex  parte  Agace,  {t)  where  one  partner  gave  partnership 
bills  in  payment  of  his  own  separate  debt,  and,  on  *being 
^  asked  whether  his  copartner  was  acquainted  with  the  transac- 
tion, untruly  replied  that  he  was,  and  that  he  consented  to  it,  it  was 
held  that  the  bills  were  not  provable  against  the  joint  estate  of  the 
firm,  they  not  being  in  the  hands  of  a  bona  fide  holder  for  value,  with- 
out notice  of  the  circumstances  under  which  they  had  been  given.  In 
this  case,  the  partner  who  gave  the  bills  did  that  which  was  clearly 
not  within  the  scope  of  his  authority,  and  the  person  who  took  them 
knew  it.     The  latter  was,  it  is  true,  misled  by  the  false  answer  to  his 

forth  suflBcient  facts  to  charge  the  other  611;  De  Eibeyre  v.  Barclay,  23  Beav.  107. 

partner  for  the  fraud.     Gray  v.  Cropper,  See,  on  the  other  hand,  Hume  v.  BoUand, 

1  Allen  (Mass.)  337.  1  Cromp.  &  M.  130;  Sims  v.  Brutton,  5 

As  to  the  liability  of  one  partner  for  Ex.  802. 
the  fraudulent  representations  of  his  co-        (s)  SeeSwift  t;.  Jewsbury,  L.  li.,  9  Q.  B. 

partner,  and  when  his  liability  therefor  is  301,  reversing  Swift  v.  Winterbotham,  L. 

not  affected  by  a  discharge  in  bankruptcy,  R.,  8  Q.  B.  244.     In  this  case,  the  letter 

seeBradneri;.  Strang,  23  Hun  (N.Y.)44o.  was  signed  by   A    B,  manager,  but    the 

(r)  See  the  last  two  cases,  and  Eapp  v.  words  of  the  statute,  as  construed  by  the 

Latham,  2  B.  &  A.  795,  ante  p.  *164  ;  Court  of  Appeal,  warrant  the  statement 

Marsh  v.   Keating,  2  CI.  &  F.  250  ;  De-  in  the  text, 
vaynes  v.  Noble,   Baring's  case,    1   Mer.        (i)  2  Cox  312. 

252 


CHAP,  I.,  §  III.]  DOCTRINES    OF   AGENCY.  166* 

question,  but  tliat  answer  was  not  referable  to  a  matter  within  the 
scope  of  the  partnership  business ;  and  the  other  partner  did  nothing 
to  lead  to  the  supposition  either  that  he  was  a  consenting  party  or  that 
he  had  authorized  his  copartner  to  say  that  he  was.  {it) 

Untrue  statement  as  to  nature  of  business. — A  question  of  more 
difiSculty  arises  when  a  partner  alleges  that  the  bnsiness  of  the  firm  is 
more  extensive  than  it  really  is,  or  that  it  is  different  from  what  it  is. 
But  even  in  this  case  the  firm  would  probably  be  held  not  liable  for 
such  a  misrepresentation,  ^x  hypothesi,  the  representation  is  not  re- 
ferable to  anything  falling  within  the  scope  of  the  partnership  busi- 
ness ;  and  it  would  probably  be  contended  in  vain  that  each  partner 
was  impliedly  authorized  by  his  copartners  to  answer  questions  as  to 
what  business  they  really  carried  on  in  partnership.  If  the  person 
seeking  to  make  the  firm  liable  knew  anything  of  the  firm,  and  of  its 
business  as  ordinarily  carried  on,  then  Ex  parte  Agace  is  an  authority 
to  show  that  he  could  not  succeed.  If  he  knew  nothing  of  the  firm^ 
he  would  be  in  the  position  of  a  person  dealing  with  an  agent  whose 
authority  is  wholly  unknown.  Now,  an  agent  whose  authority  is 
^vholly  unknown  cannot  bind  his  principal  by  misrepresenting  the 
authority  conferred ;  (y)  and  it  is  difficult,  therefore,  to  see  upon  what 
principle  a  partner  could,  in  the  case  now  supposed,  bind  the  firm  by 
misrepresenting  his  authority,  or  by  misrepresenting  the  nature  of  the 
business  of  the  firm  which,  as  to  strangers,  determines  that  authority. 
A  member  of  a  banking  *firm  could  hardly  bind  it  by  under-  r^-,^« 
writing  a  policy  in  the  name  of  the  firm,  and  by  untruly  rep- 
resenting that  he  and  his  partners  were  insurers  as  well  as  bankers. 

Fraud  inducing  a  person  to  join  a  firm. — It  is  not  necessary,  in 
order  to  carry  on  the  business  of  a  firm  in  the  ordinary  way,  that  any 
of  its  partners  should  have  power  to  induce  other  persons  to  join  the 
firm.  Hence,  if  one  partner  induces  a  person  by  fraud  to  join  the 
firm,  such  fraud  cannot  be  imputed  to  the  firm,  unless  the  partner  in 
question  had  express  authority  to  seek  for  a  new  partner,  or  unless  the 
other  members  of  the  firm  ratify  the  fraud  when  made  aware  of  it. 
If,  however,  the  incoming  partner  has  brought  in  money  to  the  firm, 

(w)  See,  also,  Kendal  v.  Wood,  L.  K.,  6  ^v)    See   Story  on  Agency,  §  134,  &c. 

Ex.  243,  and  per  Kelly,  C.  B.,  in  Mahony  The  case  supposes  that  all  that  is  known 

V.  East  Holyford  Mining  Co.,  L.  E..,  7  H.  about   the  agent's   authority  is  what  he 

L.  879,  880.  himself  says. 

253 


167*  LIABILITY    FOR    JrONEY    MISAPPLIED.  [bOOK    II., 

a  retention  of  the  money  by  the  firm,  with  knowledge  of  the  fraud, 
would  amount  to  a  ratification  thereof,  and  would  be  equivalent  to  a 
fraud  by  all  the  partners  in  the  first  instance.  Hence  they  cannot 
retain  the  money,  as  has  been  already  seen,  (a;)  46 


SECTION   IV. — LIABILITY  OF  PARTNERS  IN  RESPECT  OF  ACTS  WHICH 
ARE  UNAUTHORIZED  AND  ARE  KNOWN   SO  TO  BE. 

Excess  of  authority. — By  law  every  member  of  an  ordinary  part- 
nership is  the  agent  of  the  firm,  so  far  as  is  necessary  for  the  transac- 
tion of  its  business  in  the  ordinary  way,  and  to  this  extent  his  au- 
thority to  act  for  the  firm  may  be  assumed  by  those  who  know 
nothing  of  the  real  limits  of  his  authority.  If  his  copartners  have 
restricted  his  authority  to  narrower  limits,  which  they  are  perfectly 
at  liberty  to  do,  (3/)  still  they  will  be  bound  to  all  persons  dealing 
with  him  bona  fide  without  notice  of  the  restriction,  so  long  as  he 
acts  within  the  wider  limits  set  by  law,  as  above  explained.  On 
the  other  hand,  if  a  person  seeks  to  fasten  upon  the  firm  liability  in 
respect  of  some  act  of  one  of  the  members  which  does  not  fall  within 
the  limits  of  his  authority  as  set  by  law,  a  more  extensive  authority 
must  be  shown  to  have  been  actually  conferred  upon  him  by  the  other 
partners,  and  if  no  sufficient  authority  can  be  shown,  the  firm  will  not 
*be  liable,  even  though  the  person  seeking  to  charge  it  had 
-■  no  notice  of  the  real  authority  possessed  by  the  partner  with 
whom  he  dealt.  47 

Notice  of  want  of  authority. — The  immateriality  of  notice  of  want 
of  authority  in  the  last  case,  and  its  materiality  in  the  former,  is  a 

{x)  See  Lovell  v.  Hicks,  2  You.  &  C.  {y)  See  infra. 

Ex.  46,  481,  noticed  ante  p.  *164.  47.  Excess  of  authority. — Every  part- 

4(5.  Fraud  inducing  a  person  to  join  ner  possesses  fully  an  absolute  authority 

the  firm. — The  assent  of  a  member  of  a  to  bind  all  the  partners  by  his  acts  or  con- 

parlicuiar   firm    is    necessary   to    engage  tracts  in    relation  to  the  business  of  the 

hira  as  a  member  of  a  new  firm ;  and  the  firm,  in  the  same  manner  and  to  the  same 

general  authority  given  by  all  to  each,  or  extent  as  if  he  held  full  powers  of  attorney 

even  to  the  acting  or  managing  partner,  from  them  ;  and,  as  between  the  firm  and 

to  bind  the  whole  company,  does  not  ex-  third  parties  who   deal  with   it  in  good 

tend   to  the  erection  of  new  companies,  faith  and  without  notice,  it  is  a  matter  of 

composed  of  new  members.     Tabb  v.  Gist,  no  consequence  wliether   the   partner  is 

6  Call  (Va.)  279.  acting  fairly  with  his   copartners  in  the 

254 


€HAP.  I.,  §  IV.] 


DOCTRINES    OF    AGENCY. 


168^ 


necessary  consequence  of  the  law  of  agency.  A  firm  can  only  be  made 
liable  for  what  is  done  by  one  of  its  members  on  the  supposition  that 
the  act  in  question  was  authorized  by  the  other  members.     Now,  as  by 


transaction  or  not,  if  he  is  acting  within 
the  apparent  scope  of  his  authority  and 
professedly  for  the  firm.  Pahlman  v. 
Taylor,  75  111.  629. 

A  stipulation  in  partnership  articles, 
restrictive  of  this  general  authority,  e.  g., 
that  one  partner  shall  not  contract  debts 
without  the  consent  of  the  other,  does  not 
affect  third  persons  dealing  with  the  firm  in 
the  usual  course  of  business,  unless  knowl- 
edge thereof  is  brought  home  to  them. 
Frost  V.  Hanford,  1  K  D.  Smith  (N.  Y.) 
540;  Davis  v.  Richardson,  45  Miss.  499. 

Thus,  if  a  partner  expends  money 
drawn  by  him,  upon  his  own  account, 
from  the  firm's  funds,  in  improvements  on 
his  wife's  separate  property,  and  in  pay- 
ment of  interest  upon  a  mortgage  upon 
said  property,  and  there  is  no  proof  that 
it  was  done  surreptitiously,  fraudulently, 
or  without  the  knowledge  of  the  copart- 
ner, the  copartner  is  not  entitled  to  a  lien 
upon  the  wife's  property.  Sharp  v.  Hib- 
bins  (N.  J.),  9  Atl.  Rep.  113. 

But  it  is  held  in  South  Carolina  that  an 
authority  to  one  of  a  partnership  to  settle 
the  affairs,  receive  and  pay  the  debts,  does 
not  warrant  his  drawing  a  bill  or  giving 
a  note  in  the  partnership  name.  Martin 
V.  Walton,  1  McCord  (S.  C.)  16  ;  Bank  of 
South  Carolina  v.  Humphreys,  Id.  388. 
See,  also,  Bryan  v.  Tooke,  60  Ga.  437  ; 
Pate  V.  First  Nat.  Bank,  63  Ind.  255. 

So,  a  partner  cannot  appropriate  part- 
nership assets  on  the  ground  of  indebted- 
ness of  the  partnership  to  himself,  with- 
out assent  of  the  copartners.  Saylor  v. 
Mockbie,  9  Iowa  209.  And  the  appro- 
priation of  such  funds  by  the  active  part- 
ner to  the  rebuilding  of  a  house  for  pur- 
poses of  speculation,  transcends  the  range 
of  partnership  transactions,  and  unless 
sanctioned  by  the  copartner,  the  funds  so 


expended  would  be  properly  charged  to 
the  active  partner  as  so  much  appropriated 
to  his  private  use,  and  the  rents  of  the 
h.^use  would  belong  to  him,  otherwise 
the  rents  would  be  accounted  for  as  part- 
nership assets.  Roberts  v.  Totten,  13  Ark. 
609.  Again,  an  assignment  by  one  part- 
ner of  a  debt  due  to  the  partnership  to 
another  partner  for  his  benefit  individ- 
ually, is  not  binding  on  the  other  part- 
ners. Wood  V.  Shepherd,  2  Patt.  &  H. 
(Va.)  442. 

Where  the  partnership  is  a  special  one, 
the  power  of  each  partner,  in  regard  to 
dealings  with  third  persons  who  have 
notice  of  the  terms,  is  special.  But  even 
in  such  cases,  if  the  terms  are  violated 
and  the  transaction  enures  to  the  benefit 
of  the  partnership,  the  firm  is  liable. 
Johnson  i'.  Bernheim,  76  N.  C.  139. 

Where  a  partner  made  a  gift  of  two- 
thirds  of  a  crop  of  corn  to  his  son,  who 
took  it  and  appropriated  it  to  his  own 
use,  it  was  held,  in  an  action  by  the  other 
partner  in  the  name  of  the  firm  for  his 
own  use  to  recover  his  share  of  the  value 
of  the  corn,  that  a  partner  cannot  make  a 
valid  gift  of  partnership  property,  to  the 
prejudice  of  his  partner,  and  that  assump- 
sit can  be  maintained  against  the  donee 
for  the  value  of  the  partnership  property 
so  given.  Daniel  v.  Daniel,  9  B.  Mon. 
(Ky.)  195. 

B.  and  S.  were  interested  in  a  factory  as 
creditors  of  the  proprietor.  B.  entered 
into  a  contract,  on  behalf  of  himself  and 
S.,  to  pay  for  materials  furnished  for  the 
use  of  the  factory.  It  did  not  appear 
that  S.  knew  of  the  contract  entered  into 
by  B.,  or  that  either  had  authority  to 
pledge  the  credit  of  the  other.  Held,  that 
S.  was  not  bound.  Green  v.  Burton  (Vt.), 
10  Atl.  Rep.  575. 


255 


168*  LIABILITY    FOR   MONEY    MISAPPLIED.  [bOOK    II., 

law  tliey  are  held  prima  facie  to  authorize  all  acts  necessary  for  carry- 
ing on  the  business  of  the  firm  in  the  usual  way,  they  cannot  escape 
liability  for  any  act  of  this  character,  unless  they  can  show  that  the 
apparent  authority  to  do  it  did  not  exist,  and  was  known  not  to  exist. 
But  when  it  is  sought  to  make  the  firm  liable  for  some  act  not  prima 
facie  authorized  by  it,  an  actual  authority  by  it  must  be  shown ;  and, 
if  this  cannot  be  done,  no  case  is  made  out  against  the  firm,  however 
ignorant  the  person  seeking  to  charge  it  may  have  been  of  what  was 
authorized,  and  what  was  not.  In  the  case  now  supposed,  the  firm 
did  not  mislead  him ;  and,  if  he  was  misled  by  the  representations  of 
the  partner  with  whom  he  dealt,  his  remedy  is  against  that  partner ;  (z) 
just  as  when  an  agent  untruly  represents  his  authority,  a  person  deal- 
ing with  him  acquires  no  right  against  the  principal,  but  must  look 
to  the  agent  for  indemnity,  (a) 

From  the  above  observations,  it  follows  that  actual  notice  of  excess 
of  authority  becomes  important  only  where  the  firm  seeks  to  escape 
liability  for  some  act  done  by  one  of  its  members,  with  the  appai-ent 
but  without  the  real  authority  of  the  others.  So  long  as  one  partner 
does  nothing  beyond  the  scope  of  his  apparent  authority,  as  determined 
by  the  principle  already  explained,  so  long  is  the  firm  responsible  for 
his  conduct,  although  he  may  have  acted  beyond  or  in  direct  violation 
of  the  authority  within  which  his  copartners  may  have  attempted  to 
confine  him.  Restrictions  placed  by  the  partners  upon  the  powers 
which  each  shall  exercise  do  not  affect  non-*partners,  who  act  r^-,nq 
bona  fide,  and  without  notice  of  the  restriction.  (6)  If,  for 
example,  the  business  of  a  firm  requires  a  subdivision  of  labor,  and  it 
is  agreed  between  the  partners  that  one  shall  attend  to  one  depart- 
ment, and  another  to  another,  the  firm  will  nevertheless  be  bound  by 
the  acts  of  one  of  the  partners  out  of  his  department,  provided  they 
are  such  as,  on  the  principles  already  explained,  would  be  binding  on 
the  firm,  (c)  48 

(z)  Ante  p.  *164,  el  seq. ;  see,  too,  Lloyd  will    not   be    bound    by   their   acts.     See 

t'.  Freshfield,  9  Dowl.  &  R.  19.  Gleudon  v.  Tinkler,  Holt  N.  P.  Cas.  586. 

(a)  See,  as  to  the  liability  of  the  agent  It  is  otherwise  where  there  is  notice.    See 

in  such  a  case,  Collen  v.  Wright,  7  El.  &  Ex  parte  Holdsworth,  I  Mont.,  D.  &  D. 

B.  301,  and  8  Id.  647  ;  and  ante  p.  *163,  475. 
note  {k).  (c)  Morans  v.  Armstrong,  Arms.,  M.  & 

(6)  As  regards  such  persons,  it  is  of  no  O.  Ir.  N.  P.  Rep.  25. 
use  for  one  partner  to  tell  the  others  lie       48.   Notice   of  want  of  authority. — 

256 


CHAP.  I.,  §  IV.]  UNAUTHORIZED   ACTS.  169*" 

Cases  of  fraud  on  firm,  but  no  notice  of  it. — So,  if  one  partner 
acts  in  fraud  of  his  copartners,  still  they  will  be  bound  if  he  has 
not  exceeded  his  apparent  authority  and  if  the  person  dealing  with 


Chancellor  Kent,  in  referring  to  this  sub- 
ject, says :  "All  partnerships  are  more 
or  less  limited.  There  is  none  that  em- 
braces, at  the  same  time,  every  branch 
of  business ;  and  when  a  person  deals 
with  one  of  the  partners  in  a  matter  not 
within  the  scope  of  the  partnership,  the 
intendment  of  law  will  be,  unless  there 
be  circumstances  or  proof  in  the  case  to 
destroy  the  presumption,  that  he  deals 
with  him  on  his  private  account,  not- 
withstanding the  partnership  name  be 
assumed.  The  conclusion  is  otherwise, 
if  the  subject  matter  of  the  contract  was 
consistent  with  the  partnership  business; 
and  the  defendants  in  that  case  would  be 
bound  to  show  that  the  contract  was  out 
of  the  regular  course  of  the  partnership 
dealings.  When  the  business  of  a  part- 
nership is  defined,  known  or  declared, 
and  the  company  do  not  appear  to  the 
world  in  any  other  light  than  the  one 
exhibited,  one  of  the  partners  cannot 
make  a  valid  partnership  engagement, 
except  on  partnership  account.  Tliere 
must  be  at  least  some  evidence  of  pre- 
vious authority  beyond  the  mere  cir- 
cumstances of  partnership  to  make  such 
a  contract  binding.  If  the  public  have 
the  usual  means  of  knowledge  given 
them,  and  no  acts  have  been  done  or 
suffered  by  the  partnership  to  mislead 
them,  every  man  is  presumed  to  know 
the  extent  of  the  partnership  with  whose 
members  he  deals ;  and  when  a  person 
takes  a  partnership  engagement  with- 
out the  consent  or  authority  of  the  firm, 
for  a  matter  that  has  no  reference  to 
the  business  of  the  firm,  and  is  not 
within  the  scope  of  its  authority  or  its 
regular  course  of  dealing,  he  is,  in  judg- 
ment of  law,  guilty  of  a  fraud."    3  Kent 

2 


Com.  41-44. 

So,  also,  in  St.  Nicholas  Nat.  Bank  v. 
Savery  (45  N.  Y.  Super.  Ct.  97),  it  is  said 
that  when  a  party  takes  negotiable  paper, 
made,  accepted  or  endorsed  by  one  of 
several  partners  in  or  with  the  partner- 
ship name,  and  the  fact  that  such  name 
was  not  signed  or  endorsed  in  the  regu- 
lar course  of  the  business  of  the  firm  is 
apparent  on  the  face  of  the  instrument  or 
necessarily  implied  in  the  nature  of  the 
transaction,  such  party  cannot,  though 
he  may  have  parted  with  value  on  the 
faith  of  the  paper,  charge  the  other 
members  of  the  firm,  except  upon  proof 
that  they  assented  to  the  transaction. 
In  every  such  case  he  is  chargeable,  as 
matter  of  law,  with  notice  of  want  of 
authority  in  the  individual  partner  to 
bind  the  firm  without  their  express  as- 
sent. But  when  the  fact,  though  exist- 
ing, that  such  name  was  not  signed  or 
endoised  in  the  regular  course  of  the 
business  of  the  firm  is  not  apparent  from 
the  face  of  the  instrument,  and  the  na- 
ture of  the  transaction  appears  to  be 
susceptible  of  diflferent  conclusions,  the 
question  of  notice  is  one  of  fact,  to  be 
determined  by  the  jury  upon  all  the 
circumstances.  In  every  such  case  the 
burden  is  again  upon  the  plaintiflT, 
though  he  may  have  parted  with  value, 
to  satisfy  the  jury  either  that  the  cir- 
cumstances of  the  case  did  not  consti- 
tute notice  to  him,  or,  that  if  they  did, 
the  other  members  of  the  firm  assented 
to  the  transaction.  And  when  the  fact, 
though  existing,  that  such  name  was 
not  signed  or  endorsed  in  the  regular 
course  of  the  business  of  the  firm,  is  not 
apparent  from  the  face  of  the  instru- 
ment, and  the  nature  of  the  transaction 

57  17 


169^ 


DOCTRINES    OF    AGENCY 


[book  ir., 


him  had  no  notice  of  the  fraud.  Thus,  in  Bond  v.  Gibson,  (cl) 
where  one  jiartner  ordered  goods  on  the  credit  of  the  firm  and  im- 
mediately j)awned  them  for  his  own  benefit,  the  firm  was  held  liable 


appears  to  have  been  of  such  a  charac- 
ter as  to  give  the  phiintifi'  a  right  to 
suppose  that  it  was  a  partnership  trans- 
action, the  members  contesting  their 
liability  must  not  only  show  that  in 
fact  it  did  not  constitute  such  a  trans- 
action, but  also  that  the  plaintifl'  had  in 
some  way  actual  notice  thereof.  In 
every  such  case  the  burden  is  shifted 
upon  the  defendant  to  establish  notice. 
Compare  Union  Nat.  Bank  of  Rahway 
V.  Underbill,  21  Hun  (N.  Y.)  178;  At- 
lantic State  Bank  v.  Savery,  18  Id.  36. 

In  applying  these  principles,  it  has 
been  held  that  a  forced  sale  by  one  part- 
ner of  the  property  of  the  firm,  not  in 
the  course  of  its  business,  confers  no 
title  on  the  purchaser  who  buys  with 
notice  of  the  nature  of  the  transaction. 
Wallace  v.  Yeager,  4  Phil.  (Pa.)  251. 
Such  a  purchaser  becomes  a  trustee  for 
the  benefit  of  the  firm  and  its  creditors ; 
and  if  the  joint  funds  are  employed  by 
one  partner  to  purchase  property,  either 
in  his  own  name  or  that  of  another, 
with  the  intent  to  defraud  his  copart- 
ner, or  the  creditors  of  the  firm,  the 
property  so  purchased  will  be  treated  as 
trust  funds  for  the  firm  and  its  cred- 
itors.    Stegall  V.  Coney,  49   Miss.  761. 

The  question  is  whether  the  person 
dealing  with  the  partner  either  knew  or 
ought  to  have  knoivn  of  his  transcending 
his  authority.  Bays  v.  Conover,  105  Ind. 
415.  Thus,  in  the  case  of  a  partnership 
in  the  execution  of  a  single  contract,  it 
is  beyond  the  power  of  one  of  the  part- 
ners, in  closing  up  the  partnership  af- 
fairs, to  take  a  note  for  money  due  under 
the  contract,  payable  to  himself  individ- 


ually for  his  own  use,  and  extending  the 
time  of  payment  without  interest ;  and 
the  giving  of  such  note  is  no  defence  to 
an  action  brought  by  the  partnership  on 
the  original  debt  before  the  expiration 
of  the  extension.  Lemiette  v.  Starr 
(Midi.),  33  N.  W.  Rep.  832. 

Who  chargeable  with  notice. — 
Where  a  member  of  a  firm  of  dealers 
in  dry  goods  sold  a  judgment  in  favor 
of  the  firm  for  corn,  this  was  held  to 
be  a  misapplication  of  the  effects  of  the 
partnership ;  that  the  purchaser  was 
chargeable  with  a  knowledge  of  the  fact ; 
and  that,  by  his  contract,  he  took  no  right 
to  receive  the  proceeds  of  the  judgment. 
Vance  v.  Campbell,  8  Humph.  (Tenn.) 
524.  S.  P.,  Drake  v.  Thyng,  37  Ark. 
228.  So,  also,  where  one  partner  pays 
his  individual  debt  with  the  check  of 
the  firm,  this  is  notice  to  the  creditor 
that  the  funds  of  the  firm  are  used  in 
making  the  payment,  and  puts  upon 
him  the  onus  of  showing  the  assent  of 
the  other  partners.  Davis  v.  Smith,  27 
Minn.  390. 

Giving  firm  paper  as  security,  for 
accommodation. — In  Laverty  v.  Burr, 
1  Wend.  (N.  Y.)  529,  531,  Mr.  Justice 
Sutherland,  in  delivering  the  opinion  of 
the  court,  said  :  "  Hosmer,  the  agent  of 
the  plaintiffs,  took  the  note  in  question 
for  a  debt  due  from  Allen,  the  maker,  to 
them.  He  refused  to  take  Allen's  note 
without  security.  The  security  given 
was  the  endorsement  of  Burr  and  Bald- 
win, the  defendants,  and  of  Smith  and 
Jenkins,  the  second  endorsers.  The 
plaintiffs,  therefore,  knew,  when  they 
took  the  note,  that  the  endorsement  of 


(d)  1  Camp.  185. 


258 


CHAP.  I.,  §  IV.J  UNAUTHORIZED    ACTS. 


169* 


for  the  price  of  the  goods.  So,  if  one  member  of  an  ordinary  trad- 
ing partnership  draws,  accepts  or  endorses  a  bill  in  the  name  of  the 
firm,  but  for  some  private  purpose  of  his  own,  and  in  fraud  of  his 


the  defendant  was  made  by  one  of  tlie 
partners  in  the  name  of  the  firm,  as 
security  for  Allen,  and  not  for  a  debt  due 
from  the  firm.  The  partner  who  did  not 
sign  the  note  is  not  bound  by  it  under  such 
circumstances,  unless  he  was  previously 
consulted  and  assented  to  the  trans- 
action ;  and  the  burden  of  proving  that 
the  partner  who  did  not  sign  the  note 
consented  to  be  bound  is  thrown  on  the 
creditor.  Dob  v.  Halsey,  16  Johns.  (N. 
Y.)  34,  and  Foot  v.  Sabin,  19  Id.  154. 
In  England,  the  assent  of  all  the  part- 
ners is  presumed,  and  the  burden  of 
avoiding  the  security  is  thrown  on  the 
firm,  and  they  are  required  to  prove  that 
the  note  was  signed  by  one  of  the  part- 
ners on  his  individual  account,  without 
the  knowledge  and  against  the  consent 
of  the  others,  and  that  the  creditor 
knew  that  fact  when  he  took  the  paper 
of  the  firm.  Here  the  onus  probandi  is 
thrown  on  the  creditor.  The  law  upon 
this  subject  is  very  fully  considered  and 
clearly  established  in  the  cases  referred 
to,  and  also  in  Livingston  v.  Hastie,  2 
Cai.  (N.  Y.)  246;  Lansing  v.  Gaine,  2 
Johns.  (N.  Y.)  300,  and  Livingston  v. 
Koosevelt,  4  Id.  251.  The  only  distinc- 
tion between  this  case  and  that  of  Foot 
V.  Sabin,  19  Johns.  (N.  Y.j  154,  is  this  : 
In  that  case  the  note  was  signed  by  one 
of  the  partners  in  the  name  of  the  firm 
as  sureties ;  here  it  was  endorsed ;  and  it 
was  urged,  upon  the  argument  of  this 
cause,  that  in  every  general  partner- 
ship each  member  necessarily  possesses 
the  power  of  signing  or  endorsing  nego- 
tiable commercial  paper  in  the  custom- 
ary way  of  business,  though  the  power 
of  pledging  the  firm  as  sureties  for  third 
persons  may  not  exist.     The  form  of  the 


transaction  cannot  be  material,  except  by 
way  of  evidence.  When  paper  is  signed 
by  one  partner  in  the  name  of  the  firm, 
as  sureties  for  a  third  person,  it  carries 
on  the  face  of  it  evidence  that  it  was  not 
given  for  a  partnership  debt,  and  proof 
of  that  fact  becomes  unnecessary.  But 
when  it  is  signed  or  endorsed  in  the 
ordinary  manner,  such  proof  must  be 
given.  But  when  the  fact  is  estab- 
lished that  it  was  not  given  for  a  part- 
nership debt,  and  that  the  person  to 
whom  it  was  passed  knew  it,  no  matter 
what  the  form  of  the  instrument  is,  it 
does  not  bind  the  partners  who  did  not 
sign  or  assent  to  it.  In  this  case  the  as- 
sent of  Baldwin  is  not  shown,  and  he  is 
therefore  entitled  to  judgment."  S.  P., 
Hendrie  v.  Berkowitz,  37  Cal.  113 ;  Lang 
V.  Waring,  17  Ala.  145  ;  New  York  Fire 
Ins.  Co.  V.  Bennett,  5  Conn.  574 ;  Marsh 
V.  Thompson,  2  111.  App.  217  ;  Darling 
V.  March,  22  Me.  184 ;  Atlas  Nat.  Bank 
V.  Savery,  127  Mass.  75;  Heffron  v. 
Hanaford,  40  Mich.  305;  Tutt  v.  Ad- 
dams,  24  Mo.  186 ;  Dounee  v.  Parsons, 
45  N.  Y.  180 ;  Tanner  v.  Hall,  1  Pa.  St. 
417.  But  compare  Freeman  v.  Eoss,  15 
Ga.  252 ;  Flemming  v.  Prescott,  3  Rich. 
(S.  C.)  307. 

Rights  of  innocent  holders  of  such 
paper. — When  the  course  of  business 
is  such  as  to  induce  an  honest  belief  that 
a  partner,  professing  to  act  for  his  firm, 
has  authority  to  sign  the  firm  name  to  a 
note,  the  firm  cannot  impeach  a  note 
thus  given  to  one  taking  it  in  faith  of 
the  existence  of  such  authority.  Kelton 
V.  Leonard,  54  Vt.  230.  But  where  a 
partner  makes  a  note  in  the  name  of 
his  firm,  without  the  knowledge  or  con- 
sent of  his  partner,  and  not  in  the  course 


259 


169^ 


DOCTRINES   OF    AGENX'Y. 


[book    II., 


copartners,  they  Mill  be  liable  upon  the  bill  at  the  suit  of  any  holder 
for  value,  without  notice  of  the  fraud,  (e)  So,  as  has  been  already 
seen,  if  one  partner  fraudulently  misapplies  money  for  which  the 
firm  is  answerable,  the  firm  is  liable  to  make  it  good,  although  the 
other  partners  may  have  been  grossly  deceived,  and  may  themselves 
have  been  morally  blameless.  (/)  49 


of  partnership  business,  one  seeking, 
as  endorsee,  to  recover  the  amount 
of  the  note  against  the  other  partner 
must  show  that  he  took  it  before  ma- 
turity, for  value  and  in  good  faith,  and 
mere  proof  that  tlie  note  "  was  passed 
to  tlie  plaintiff  for  goods  sold "  is  not 
sufficient.  Clark  v.  Dearborn,  6  Duer 
(N.  Y.)  309. 

A  note  [layable  to  partners  in  their  in- 
dividual names,  and  assigned  by  one  of 
the  partners  in  the  name  of  the  firm, 
may  be  given  in  evidence  by  the  assignee, 
in  a  suit  against  the  maker,  without 
proof  of  the  authority  of  the  partner 
who  assigned  it,  although  "  non-assign- 
ment" is  pleaded.  Mick  v.  Howard,  1 
Ind.  250. 

A  and  B  being  partners  in  trade  with 
S  and  others,  A  made  a  promissory  note, 
in  the  name  of  the  firm,  payable  to  B, 
to  secure  an  alleged  balance  due  from 
the  firm  to  B,  without  the  knowledge  or 
consent  of  S.  B  endorsed  the  note  to  a 
third  person.  Held,  that  though  no 
action  would  have  lain  by  B,  yet  the  en- 
dorsees might  bring  an  action  against 
the  firm  as  makers.  Smith  v.  Lusher,  5 
Cow.  (N.  Y.)  688. 

A  was  a  member  of  two  firms  ;  he 
wrote  a  note  to  himself,  signed  the 
name  of  one  firm,  endorsed  it  by  his  own 
name,  and  by  tlie  name  of  the  other 
firm.  Held,  that  these  facts  were  not 
such  as  required  a  holder  for  value  be- 
fore maturity  to  prove  that  the  partners 
assented  to  the  endorsement,  or  that  the 
proceeds   were   used    for   their    benefit. 


Ihmsen  v.  Kegley,  25  Pa.  St.  297. 

(e)  Ex  parte  Bushell,  3  Mont.,  D.  & 
D.  615;  Ex  parte  Meyer,  De  G.  632 
(an  accommodation  bill) ;  Lane  v.  Wil- 
liams, 2  Vern.  277;  Wintle  v.  Crowther, 

1  Cromp.  &  J.  316 ;  Thicknesse  v.  Bromi- 
low,  2  Id.  425  ;  Ridley  v.  Taylor,  13  East 
175 ;  Sanderson  v.  Brooksbank,  4  Car. 
&  P.  286  ;  Lewis  v.  Reilly,  1  Q.  B.  349; 
Sutton  V.  Gregory,  2  Peake  150 ;  Swan 
V.  Steele,  7  East  210.  See,  as  to  the  plea 
of  non  uccepit,  Jones  v.  Corbett,  2  Q.  B. 
828.  It  is  now  settled  that  if  a  bill  is 
drawn  or  accepted  by  one  partner  in 
fraud  of  the  firm,  the  holder  cannot 
recover  against  the  firm  unless  he  can 
show  that  he  gave  value  for  the  bill. 
Hogg  V.  Skene,  18  C.  B.  (N.  S.)  426,  ex- 
plaining  Musgrave  v.  Drake,  5  Q.  B.  185, 
which  was  supposed  to  be  to  the  con- 
trary. See,  also,  Bailey  v.  Bidwell,  13 
Mees.  &  W.  73 ;  Smith  v.  Braine,  15 
Jur.  287,  Q.  B.,  and  16  Q.  B.  244;  Har- 
vey V.  Towers,  6  Ex.  656  ;  Berry  v.  Al- 
derman, 14  C.  B.  95 ;   Heath  v.  Sansom, 

2  B.  &  Ad.  291. 

(/)  Ante  p.  *151,  et  seq. 

49.  Fraud  on  firm,  but  no  notice  of 
it. — It  is  a  part  of  the  elementary  prin- 
ciples we  have  been  considering  in  this 
chapter  that  a  partner  is  bound  by  the 
act  of  his  copartner,  within  the  scope  of 
the  business  of  the  firm,  even  if  that  act 
be  fraudulent  as  between  the  partners. 
Capelle  v.  Hall,  12  Bankr.  Reg.  1. 
Thus,  where  one  partner  makes  a  note 
in  the  name  of  the  firm,  the  firm  are 
liable  to  the  holder  if  he  has  uo  actual 


2G0 


CHAP,  I.,  §  IV.J 


UNAUTHORIZED    ACTS. 


170=* 


*  Liability  of  retired  partner  in  the  absence  of  notice. — 
^  Upon  the  same  principle,  if  a  person  known  to  be  a  part- 
ner retires  and  does  not  notify  his  retirement,  he  will  continue  to 
be  bound  by  the  acts  of  his  late  partners  as  if  his  partnership 
with   them  continued,  {g) 

Cases  of  restricted  authority  and  notice  of  it. — On  the  other  hand, 
a  person  who  has  notice  that  the  authority  of  a  partner  is  restricted, 
cannot  hold  the  firm  liable  if  he  chooses  to  deal  with  that  partner 
in  a  matter  beyond  his  authority  as  restricted,  [h)  Therefore,  where 
the  defendant,  who  was  in  partnership,  sent  the  plaintiff  a  circular 
telling  him  not  to  supply  goods  to  the  firm  without  the  defendant's 
written  order,  and  the  plaintiff,  notwithstanding,  supplied  goods  to 
the  defendant's  partner,  it  was  held  that  the  defendant  was  not 
liable  for  the  goods,  {i)  So,  the  authority  of  any  partner  to  accept 
bills  in  the  partnership  name  may  be  determined  by  a  public  notice, 


knowledge,  suspicion  or  cause  of  sus- 
picion of  any  fraud  upon  the  partner- 
ship in  the  making  of  the  note.  Biod- 
gett  V.  Weed,  119  Mass.  215.  And 
where  promissory  notes,  ofTered  by  the 
acting  partner  at  a  bank,  in  the  usual 
course  of  partnership  business,  are  dis- 
counted, and  the  money  is  subsequently 
misapplied,  the  Iiolders,  not  being  privy 
thereto,  have  a  right  of  action  against 
the  dormant  partners.  Winship  v.  Bank 
of  United  States,  5  Pet.  (U.  S.)  529. 

One  partner  in  an  ordinary  trading 
firm  can  bind  the  firm  for  a  loan  despite 
a  secret  agreement  among  the  partners 
to  the  contrary,  unknown  to  the  lender ; 
and  the  latter  will  not  be  chargeable 
with  notice  of  any  want  of  authority  by 
the  fact  that  after  the  loan  the  note 
given  therefor  was  signed  only  by  the 
partner  negotiating  the  loan,  and  en- 
dorsed by  him  in  the  firm  name.  Ben- 
ninger  v.  Hess,  41  Ohio  St.  64.  S.  P., 
Kedlon  v.  Churchill,  73  Me.  146 ;  S.  C, 
40  Am.  Rep.  345. 

The  firm  of  C.  F.  P.  &  Co.  made  their 
promissory  note  payable  to  their  order, 


and  endorsed  the  same.  L.,  one  of  the 
firm,  and  also  a  member  of  the  firm  of 
J.  S.'s  Sons,  endorsed  his  own  name  and 
the  name  of  the  latter  firm  thereon, 
without  their  knowledge  or  consent,  and 
delivered  it  to  a  firm  to  whom  he  was 
individually  indebted,  to  be  applied 
upon  the  debt,  who  transferred  the  note 
to  plaintiff  for  value  before  maturity, 
plaintiff  having  no  notice  of  the  circum- 
stances attending  the  execution  of  the 
note.  In  an  action  against  the  members 
of  the  firm  of  J.  S.'s  Sons  upon  the  en- 
dorsement— Held,  that  the  defendants 
were  liable.  Atlantic  State  Bank  v. 
Savery,  82  ^.  Y.  291;  aflSrming  18 
Hun  36. 

{g)  This  subject  will  be  alluded  to 
hereafter,  see  chapter  2,  §  3. 

{h)  Alderson  v.  Pope,  1  Camp.  404, 
stated  and  observed  upon  hereafter. 

[i)  Willis  V.  Dyson,  1  Stark.  164; 
Minnit  v.  Whitney,  Vin.  Ab.,  "  Part,"  A, 
pi.  12,  and  5  Bro.  P.  C.  489.  See,  too, 
Vice  V.  Fleming,  1  You.  &  J.  227 ;  Ex 
parte  Holdsworth,  1  Mont.,  D  &  D.  475. 


261 


170*  DOCTRINES    OF    AGENCY.  [BOOK    II., 

and  such  notice  will  affect  those  whom  it  reaches,  subject  to  the 
qualification  that  an  endorsee  with  notice  may  avail  himself  of  the 
ignorance  of  his  endorser,  (k) 

In  Galway  v.  Mathew  (/)  the  defendants,  Mathew  and  Smithson, 
were  partners ;  Smithson  caused  an  advertisement  to  be  published, 
warning  all  persons  not  to  give  credit  to  Mathew  on  his,  Smithson's, 
account,  and  sta-ting  that  he  would  not  be  liable  for  any  bills  of 
notes  issued  by  Mathew  in  the  name  of  the  partnership.  The 
plaintiff  had  seen  this  advertisement,  but  he  was  nevertheless  pre- 
vailed upon  by  Mathew  to  accept  a  bill  for  the  accommodation  of 
the  firm,  taking  in  exchange  a  promissory  note  drawn  by  Mathew 
in  the  name  of  the  firm.  Mathew  got  the  bill  discounted,  and  bona 
fide  applied  almost  all  of  the  money  thus  procured  in  payment  of 
the  debts  of  the  firm.  The  plaintiff  paid  his  acceptance  at  maturity, 
and  *then  brought  an  action  against  the  firm  on  the  note.  r*-. -71 
But  it  was  held  that,  having  seen  the  advertisement,  he 
could  not  recover.  50 

{k)  Eooth  V.  Qnin,  7  Price  193.  selves  that  it  shall  not  be  exercised  ;  and 
{I)  1  Camp.  402,  and  10  East  264.  if  a  third  person,  apprised  of  such  stipu- 
See,  too,  Ex  parte  Holdsworth,  1  Mont.,  lation,  will  take  a  joint  security,  he  can- 
D.  &  D.  475,  where  the  drawer  of  bills  not  sue  the  firm  upon  it,  although  it  were 
accepted  by  the  firm  had  notice  that  they  truly  represented  to  him,  by  the  partner 
were  accepted  without  authority.  See,  giving  the  security,  that  the  money  to 
further,  on  this  point,  infra,  p.  *174.  be  advanced  on  it  was  required  for  the 
oO.  Restricted  authority  and  notice  purpose  of,  and  was  in  fact,  applied  in 
of  it. — Mr.  Gow,  in  his  excellent  work  liquidating  the  partnership  debts;  much 
Bays  (pp.  48,  49,  3d  ed.) :  "  On  the  sub-  less  can  he  hold  the  firm  responsible  on 
jectof  negotiable  instruments,  it  remaims  a  security  so  obtained,  if  he  take  it  in 
to  be  observed  that  even  in  transactions  defiance  of  a  positive  notice,  previously 
in  which  all  the  partners  are  interested  given  by  one  of  the  members,  that  he 
the  authority  of  one  partner  to  make,  will  not  be  answerable  for  any  bill  or 
draw,  accept,  or  endorse  promissory  notes  note  signed  and  negotiated  by  the  others, 
or  bills  of  exchange  in  the  joint  name  is  And  the  power  of  one  partner  to  bind 
only  implied,  and  may  therefore  be  re-  the  firm  by  a  negotiable  security,  where 
butted  by  express  previous  notice,  to  the  it  i-s  capable  of  being  exercised,  is  only 
party  taking  a  joint  security  from  one  co-existent  with  the  duration  of  the  part- 
partner,  of  his  want  of  authority,  or  that  nership  itself;  for,  immediately  on  its 
the  others  will  not  be  liable  upon  it.  dissolution,  the  power  ceases." 
Such  a  power  is  not  indispen.sably  essen-  So,  also.  Lord  Ellenborough,  in  Gal- 
tial  to  the  existence  of  a  partnership;  way  ?;.  Mathew  (10  East  264),  remarked: 
the  partners  may  stipulate  between  them-  "The  general  authority  of  one  partner 

262 


CHAP.  I.,  §  IV. J  UNAUTHORIZED   ACTS.  171* 

Restricted  powers  not  inconsistent  with  continuance  of  ^partnership. 

It  will  be  observed  that  in  these  cases  the  notices  were  effectual, 

though  the  partnership  was  not  determined.     The  continuance  of 

to  draw  bills  or  promissory  notes  to  notorious  that  the  proprietors  have 
charge  another  is  only  an  implied  au-  separate  departments  and  interests,  they 
thority ;  and  that  implication  was  rebut-  must  be  sued  separately  by  the  trades- 
ted  in  this  instance  by  the  notice  given  men  who  may  supply  each  with  goods"" 
by  Smithson,  who  is  now  sought  to  be  The  implied  authority  of  one  partner 
charged,  which  reached  the  plaintiff',  to  bind  his  copartner  by  contract  may 
warning  him  that  Mathew  had  no  such  be  revoked  by  refusal  of  the  latter  to  be 
authority.  It  is  not  essential  to  a  part-  thus  bound,  communicated  to  the  party 
nership  that  one  partner  should  have  in  whose  favor  the  contract  is  to  be 
power  to  draw  bills  and  notes  in  the  made.  Leavitt  v.  Peck,  3  Conn.  124. 
partnership  firm  to  charge  the  others ;  The  partnership  relation  makes  each 
they  may  stipulate  between  themselves  partner  the  agent  of  the  others,  when 
that  it  shall  not  be  done  ;  and  if  a  third  acting  within  the  scope  of  his  power  ; 
person,  having  notice  of  this,  will  take  but  when  his  agency  is  denied,  and  his 
such  a  security  from  one  of  the  partners,  act  forbidden  by  his  copartner,  with 
he  shall  not  sue  the  others  upon  it,  in  notice  to  the  party  assuming  to  deal  with 
breach  of  such  stipulation,  nor  in  defi-  him  as  the  agent  of  the  firm,  his  act  is 
ance  of  a  notice,  previously  given  to  not  that  of  the  firm,  but  his  individual 
him  by  one  of  them,  that  he  will  not  be  act  only.  Yeager  v.  Wallace,  57  Pa.  St. 
liable  for  any  bill  or  note  signed  by  the    365. 

others."  Evidence,   both    direct   and    circum- 

Mr.  Gow  further  says :  "  So,  if  the  stantial,  is  admissible  to  prove  that  the 
person  with  whom  the  single  partner  sole  power  of  conducting  the  business  of 
deals  is  at  the  time  conscious  of  the  a  firm  has  been  given  to  one  partner, 
misconduct  of  that  partner  in  pledging  Such  power  may  be  inferred  from  the 
the  joint  name  to  a  separate  transaction,  conduct  of  the  partners  for  a  series  of 
he  cannot  enforce  against  the  firm  any  years,  as,  that  one  has  exclusively  con- 
claim  that  may  arise  to  him  out  of  such  ducted  the  business  of  the  firm,  and  the 
dealings.  Neither  can  he  call  upon  the  other  partner  has  never  questioned  his 
firm  to  fulfill  a  coutract  which  has  been  acts,  or  assumed  to  conduct  the  business 
made  by  one  partner,  if  he  be  privy  to  a  himself.  It  is  proper  to  show  any  reason 
private  agreement  between  the  partners  existing,  or  expressed  by  the  partners, 
themselves,  the  effect  of  which  is  to  why  it  was  not  desirable  or  desired  that 
throw  the  responsibility  upon  the  single  the  other  should  conduct  the  business, 
partner  alone.  Therefore,  where  four  as,  that  he  had  little  interest  in  the  con- 
persons  are  partners  in  a  coach  concern,  cern,  while  the  interest  of  the  managing 
but  one,  by  agreement,  provides  the  partner  was  large.  Anthony  v.  Wheat- 
coaches  at  a  certain  rate  per  mile,  he    ons,  7  R.  I.  4,9. 

alone  is  responsible  for  repairs  done  to  One  partner  cannot,  in  violation  of 
the  coach  by  a  person  cognizant  of  this  known  stipulations  in  the  articles  of 
arrangement,  although  the  names  of  all  partnership,  bind  the  firm  even  for 
four  appear  on  the  vehicle.     So,  if  it  be    money  which  is  applied  in  liquidation 

263 


171* 


DOCTRINES   OP   AGENCY. 


[book   II., 


the  partuei'ship  is  not  inconsistent  with  a  notice  by  one  partner 
that  as  to  some  particular  matter  he  will  not  be  bound  by  the  acts 
of  his  copartner,  [m) 

Bills  accepted  in  name  of  firm  for  private  debt — Again,  a  person 
who  knows  that  a  partner  is  using  the  name  or  assets  of  the  firm 
for  a  private  purpose  of  his  own,  knows  that  he  is  prima  facie 
committing  a  fraud  on  his  copartners.  Therefore,  notwithstanding 
the  implied  power  of  a  member  of  an  ordinary  trading  firm  to 
accept  bills  or  make  notes,  if  one  partner  accepts  a  bill  or  makes  a 
note  in  the  name  of  the  firm,  and  gives  the  bill  or  note  in  payment 
of  a  private  debt  of  his  own,  the  creditor  who  takes  the  bill  or  note, 
knowing  the  circumstances  under  which  it  has  been  accepted  or 
made,  will  not  be  able  to  enforce  it  against  the  firm,  unless  it  was, 
in  fact,  given  with  the  authority  of  the  other  partners,  which  it  is 
for  the  creditor  to  prove,  (n)     And  if  a  bill  is  drawn  by  one  partner 


of  the  debts  of  the  firm.  Langan  v.  Hew- 
ett,  13  Sm.  &  M.  (Miss.)  122. 

If  one  of  two  attorneys  constituting  a 
firm,  practicing  only  in  tlie  city  of  Balti- 
more, receive,  from  one  aware  of  this 
limitation,  a  note  for  collection  in  Car- 
roll county,  the  firm  will  not  be  respon- 
sible unless  the  privity  of  the  other 
partner  is  shown.  Brent  v.  Davis,  9  Md. 
217. 

If  a  firm  consists  of  but  two  partners, 
each  having  an  equal  voice  in  the  direc- 
tion and  control  of  the  common  business, 
either  may  protect  himself  against  lia- 
bility on  a  future  contract  by  giving 
notice  of  his  dissent  to  the  person  with 
whom  it  is  about  to  be  made  ;  and  where 
the  partnership  consists  of  more  than 
two  persons,  one  of  whom  gives  notice 
of  his  dissent,  the  party  contracting  with 
the  others  acts  at  his  peril,  and  cannot 
hold  the  dissenting  party  liable,  unless 
his  liability  results  from  the  articles,  or 
from  the  nature  of  the  partnership. 
Johnston  v.  Button,  27  Ala.  245. 

Where  the  debtor  of  a  firm  has  re- 
ceived notice  not  to  pay  the  debt  to  a 


certain  member  of  the  firm,  and  he 
afterwards  takes  a  recei[)t  from  such 
member,  in  consideration  of  his  dis- 
charging a  debt  due  by  the  member  in- 
dividually to  him,  the  transaction  will 
not  be  regarded  as  bona  fide,  and  will  not 
discharge  the  debt  due  the  firm.  Sims 
V.  Smith,  12  Kich.  (S.  C.)  685.  See, 
also,  Campbell  v.  Bo  wen,  49  Ga.  417 ; 
Urquhart  v.  Powell,  54  Ga.  29;  Nat. 
Bank  of  Commonwealth  v.  Law,  127 
Mass.  72. 

[m)  See,  in  addition  to  the  cases  cited 
in  the  last  few  notes,  the  judgment  of  L. 
J.  Bramwell  in  Bullen  v.  Sharp,  L.  R., 
1  C.  P.  125,  126,  and  the  judgment  in 
Vice  V.  Fleming,  1  You.  &  J.  227. 

{n)  Leverson  v.  Lane,  13  C.  B.  (N.  S.) 
278,  and  3  Post.  &  F.  221 ;  Ee  Riches,  4 
De  G.,  J.  &  S.  581,  and  5  N.  R.  287. 
See,  also,  Ellston  v.  Deacon,  L.  R.,  2  C. 
P.  20.  Older  cases  to  the  same  effecA 
are  Wells  v.  Masterman,  2  Esp.  731 ; 
Green  v.  Deakin,  2  Stark.  347  ;  Ex  parte 
Thorpe,  3  Mont.  &  A.  716;  Ex  parte 
Austen,  1  Mont.,  D.  &  D.  247  ;  Aiden  v. 
Sharpe,  2  Esp.  524 ;  Ex  parte  Agace,  2 


264 


CHAP.  I.,  §  IV.] 


UNAUTHORIZED    ACTS. 


171* 


in  the  name  of  the  firm,  in  fraud  of  liis  copartners,  and  is  accepted 
by  the  drawee,  and  is  afterwards  endorsed  by  the  drawer  in  the 
name  of  the  firm,  the  acceptor  may  successfully  deny  the  endorse- 
ment, although  he  cannot  deny  the  drawing,  (o) 

Again,  although  a  partner  may  be  a  bona  fide  holder,  for  his  own 
separate  use,  of  the  paper  of  his  firm,  yet,  if  he  gives  such  paper  in 
payment  of  a  separate  debt  of  his  own,  this  is  prima  fade  an  ir- 
regular proceeding,  and  a  fraud  on  his  copartners.  Consequently, 
^^^-,-.  the  creditor  taking  the  paper  *must  rebut  this  prima  facie 
inference  before  he  can  compel  the  firm  to  pay.  [p)  A  bona 
fide  holder  for  value  without  notice  is,  of  course,  in  a  different 
position,  (g)  51 


Cox  312;  Miller  v.  Douglas,  3  Eoss  Lead. 
Cas.  500 ;  Ex  parte  Bonbonus,  8  Ves.  540; 
Frankland  v.  M'Gusty,  1  Knapp  274 ;  and 
see,  post  p.  *173. 

(o)  Garland  v.  Jacomb,  L.  R.,  8  Ex.  216. 

(p)  See  Leverson  v.  Lane,  13  C.  B.  (N. 
S.)  278,  and  Ee  Eiches,  4  De  G.,  J.  &  S. 
581,  and  5  N.  E.  287,  qualifying  Ex 
parte  Bushell,  3  Mont.,  D  &  D.  615, 
and  Eidley  v.  Taylor,  13  East  175,  in 
which  the  contrary  doctrine  was  counte- 
nanced. 

(g)  See  ante  p.  *169. 

51.  Paying  private  debt  with  the 
paper  of  the  firm. — It  is  an  inflexible 
rule  of  the  law  of  partnership  that  if 
a  promissory  note,  executed  by  one 
partner  in  the  name  of  the  firm,  be  for 
his  individual  debt,  which  fact  is  known 
to  the  payee,  it  is  not  binding  on  the 
partnership.  Taylor  v.  Hillyer,  3  Blackf. 
(Ind.)  433 ;  Hickman  v.  Eeineking,  6 
Id.  388;  Maudlin  v.  Branch  Bank,  2 
Ala.  502  ;  Eobinson  v.  Aldridge,  34  Miss. 
352 ;  Hickman  v.  Kunkle,  27  Mo.  401  ; 
Stainer  v.  Tysen,  3  Hill  (N.  Y.)  279 ; 
Miller  v.  Manice,  6  Id.  115;  Weed  v. 
Richardson,  2  Dev.  &  B.  (N.  C.)  L.  535  ; 
Baird  v.  Cochran,  4  Serg.  &  E.  (Pa ) 
397  ;  Porter  v.  Gunnison,  2  Grant  (Pa.) 


Cas.  297  ;  Burleigh  v.  Parton,  21  Tex. 
585 ;  Huntington  v.  Lyman,  1  D.  Chip. 
(Vt.)  438.  See  Cotton  v.  Evans,  1  Dev. 
&  B.  (N.  C.)  Eq.  284.  So,  where  a  part- 
ner in  two  firms  draws  a  bill  by  one  firm 
on  the  other,  payable  to  himself,  for  his 
individual  debt,  which  is  accepted  by 
the  firm,  such  bill  cannot  be  recovered 
by  the  payee  against  the  drawers  or 
acceptors.  Babcock  v.  Stone,  3  McLean 
(U.  S.)  172.  Nor  can  one  partner,  with- 
out the  express  concurrence  of  his  co- 
partner, make  a  note  of  the  firm,  payable 
to  himself,  and  charge  the  firm  there- 
with (Brown  v.  Haynes,  6  Jones  (N.  C.) 
Eq.  49) ;  or  endorse  a  partnership  note 
belonging  at  the  time  to  the  firm,  in 
payment  of  an  individual  debt  (Fletcher 
V.  Anderson,  11  Iowa  228;  Fall  Eiver, 
&c  ,  Bank  v.  Sturtevant,  12  Cush.  (Mass.) 
372)  ;  or  give  a  firm  note  in  renewal  of 
an  individual  indebtedness.  Howell  v. 
Wilcox  &  Gibbs  Sewing  Machine  Co., 
12  Neb.  177 ;  Lime  Eock,  &c.,  Ins.  Co. 
V.  Treat,  58  Me.  415. 

The  endorsers  of  a  firm  note  made  by 
one  partner  without  authority  and  passed 
by  him  for  his  individual  debt,  are  not 
liable  for  its  payment.  Williams  v. 
Walbridge,  3  Wend.  (N.  Y.)  415. 


265 


172^ 


DOCTRINES   OF    AGENCY, 


[book   II, 


Pledge  of  part  iier  ship  goods  for  private  debt. — As  a  partner  has 
no  implied  authority  to  pledge  the  partnership  name  for  purposes 
of  his  own,  so  neither  has  he,  for  similar  purposes,  any  implied 

What  is  the  giving  of  firm  paper  Burden    of   showing    authority   on 

for    an    individual    debt. — A    loaned  holder  of  the  paper. — Tlie   burden  is 

money  on  the  credit  of  B  and  C,  which  on  the  holder  of  a  note  to  show  that  the 

was  used  for  the  purposes  of  the  firm,  several  members  of  a  firm  assented  to  a 

but  B's  individual  note  was  given  for  it,  note,  in  the  name  of  a  firm,  where  such 

and  accepted  by  A  by  mistake,  who,  on  note  is  taken  for  the  private  debt  of  one 

discovering  the  mistake,  demanded  and  of  the  partners.     Bank  of  Commerce  v. 

received  from  B  the  firm  note  in  lieu  Selden,  3  Minn.  155 ;  Clay  v.  Cottrell,  18 

thereof.     Held,   that   this   was   not   the  Pa.  St.  408  ;  Cooper  v.  McClurkan,  22  Pa. 

giving  of  a  partnership  note  for  an  in-  St.  80;  Davenport  v.  Runlett,  3N.H.  386; 

dividual  debt.     Header  v.  Malcolm,  78  Foster  v.  Andrews,  2  Pa.  160;    Ganse- 


Mo.  550.  So,  also,  if  money  is  bor- 
rowed by  a  partner  in  his  own  name, 
and  on  his  own  credit,  and  his  individ- 
ual note  is  given  therefor,  it  is  no  fraud 


voortt).  Williams,  14  Wend.  (N.  Y.)  133  ; 
Mechanics'  and  Traders'  Ins.  Co.  ■;;.  Kich- 
ardson,  33  La.  Ann.  1308  ;  Mutual  Bank 
V.  Richardson,  Id.   1312;  S.  C,  39  Am. 


afterwards  to  execute  the  note  of  the  Rep.  290,  293,  note ;  Allen  v.  Cary,  33 

firm   in  renewal,   provided   the  money  La.  Ann.  1455;  Hamilton  v.  Hodges,  30^ 

goes    into    the    business    of   the    firm.  La.  Ann,  1290 ;  King  v.  Faber,  22  Pa, 

Union  Bank  V.Eaton,  5  Humph.  (Tenn.)  St.  21;  Lanier  v.  McCabe,   2   Fla.  32; 

499.     And  where  the  partnership  arti-  Munroe  v.  Cooper,  5  Pick.  (Mass.)  412; 

cles  provide  that  an  existing  individual  Powell  v.  Messer,  18  Tex.  401 ;  Rust  v. 

debt  of  one  of  the  partners  shall  be  as-  Hauselt,  41  N.  Y.  Super  Ct.  467  ;  Rut- 


sumed  and  paid  by  the  firm,  either  part- 
ner may  execute  the  firm  note  to  secure 
such  payment.  Randall  i'.  Huntei,  66 
Cal.  512. 

A  partnership  was  established   com- 


ledge  V.  Squires,  23  Iowa  53  ;  Tompkins 
V.  Woryard,  5  W.  Va.  216 ;  Wagner  v. 
Clay,  1  A.  K.  Marsh.  (Ky.)  257;  Wil- 
liams D.Gilchrist,  11  N.  H.  535 ;  Wil- 
liams V.  Walbridge,  3    Wend.  (N.  Y.) 


posed  of  the  members  of  an  old  firm  and  415;     Wilson    v.    Williams,    Id.    146. 

others,  and  did  business,  under  different  In  Dob  i;.  Halsey   (16  Johns.    (N.  Y.) 

firm  names,  at  Tuscaloosa,  Mobile  and  34,  38)    Spencer,    C.   J.,    said :      "  Thia 

New  York.     Tlie  new  partnership  was  court  has  decided,  in  several  cases,  that 

indebted  to  the  old.     A  member  of  the  where  a  note  is  given  in  the  name  of  the 

old  firm  drew  a  bill  in  the  name  of  the  firm,  by  one  of  the  partners,  for  the  pri- 

firm  at  Mobile,  in  payment  of  a  debt  of  vate  debt  of  such  partner,  and  known  to 

the  old  firm,  on  the  iiouse  at  New  York,  be  so  by  the  person  taking  the  note,  the 

which  was  accepted  in  the  firm  name  by  other  partners    are  not   bound  by  such 

a  member  of  the  old  firm.     Held,  that  note,  unless  they  have  been  previously 

this  was  like  the  payment  of  any  other  consulted,  and  consent   to  the  transac- 

indebtedness  of  the  partnership,  and  not  tion.     Livingston  v.  Hastie,  2  Cai.  (N. 

like  one   partner  giving  a  partnership  Y.)   246;    Lansing  v.   Gaine,   2   Johns, 

note  for  his  individual  debt.     Hester  v.  (N.  Y.)  300;  Livingston  v.  Roosevelt,  4 

Lumpkin,  4  Ala.  509.  Id.  251,     In  Ridley  v.  Taylor   (13  East 

266 


CHAP.  I.,  §  IV.]  UNAUTHORIZED    ACTS. 


172^ 


power  to  pledge  its  goods.  Therefore,  if  two  firms  are  jt)iiitly 
interested  in  consignments,  and  one  of  them  pledges  the  bills  of 
lading  with  its  bankers  as  a  security  for  advances  on  its  separate 

175)  the  Court  of  King's  Bench  held  Y.)  154,  157,  158),  the  same  judge  said  t 
that  if  one  partner  draw  or  endorse  a  "  The  plaintiflf  proves  Holmes'  signature 
bill  in  the  name  of  the  partnership,  it    to  the  note,  and  also   that  Wilson  and 


will,  prima  facie,  bind  the  firm,  although 
passed  by  one  partner  to  a  separate 
creditor,  in  discharge  of  his  private 
debt,  unless  there  be  covin  between 
such  separate  debtor  and  creditor,  or,  at 
least,  the  want  of  authority,  either  ex- 
press or  implied,  in  the  debtor  partner, 


Foot  were  partners,  and  that  Wilson 
signed  the  name  of  tlie  firm  ;  and  it  ap- 
peared on  the  face  of  the  note  that 
tliey  signed  as  'sureties'  to  Holmes. 
Whether  we  apply  this  proof  to  the 
general  issue  or  to  the  special  plea,  the 
plaintiff  has  not  maintained  either  issue. 


to  give  the  security  of  the  firm  for  his  It  was  incumbent  on  him  to   show  that 

separate  debt.     The  only  difierence  be-  all   the  defendants   were  liable   on  the 

tween  the  decision  of  this  court  and  that  note,  and  that  Wilson  executed  the  note 

of  the  King's   Bench  consists   in   this  :  with  the  express  assent  and  authority  of 

We  require  the  separate  creditor,  who  Foot.     In    this   case,  it   appearing  that 

has  obtained  the  partnership  paper  for  the  signature  of  the  name  of  the  firm 

the  private  debt  of  one  of  the  partners,  by   Wilson   was   not  for  a  partnership 

to  show  the  assent  of  the  whole  firm  to  debt,  Wilson  could  not  bind  his  partner, 

be    bound;    the    rule    of    the     King's  Foot.     All  the  cases  were  reviewed  in 

Bench  throws  the   burden  of  avoiding  Dob  v.  Halsey  (16  Johns.  (N.  Y.)  34), 

such  security  on  the  firm,  by  requiring  and   the   principle  established  is   this : 

them  to  prove  that  the  act  was  covinous  that  where  a  note  is  given  in  the  name 

on  the  part  of  the  partner  for  whose  of  a  firm,  by  one  of  the  partners,  for  the 

private  debt  the  paper  of  the  firm  was  private  debt  of  such  partner,  and  known 

given,    by   showing    that    it    was    done  to  be  so  by  the  person  taking  the  note, 

without  the  knowledge  and  against  the  the  other  partner  is  not  bound  unless  he 

consent  of  the  other  partners,  and  that  has  been  previously  consulted  and  has 

the    fact   was   known    to    the    separate  consented   to  the   transaction ;  and   the 

creditor  when  he  took  the  paper  of  the  burden  of   the  proof   that   the    partner 

firm.     I  can  perceive  no  substantial  dif-  who  did  not  sign  the  note  consented  to 

ference,  whether  the  note  of  a  firm  be  be   bound   is   thrown    on    the    creditor, 

taken  for  a  private  debt  of  one  of  the  The  same  principle  applies  with  greater 

partners,  by  a  separate  creditor  of  the  force  when  one  of  the  partners   becomes 

partner   pledging   the   security    of    the  security   for    another    person,    and    at- 

firm,  and  taking  the  property  of  the  firm  tempts    to   bind    his    copartners.      The 

upon  a  purchase  of  one  of  the  partners  creditor  is  aware  that  he  is  pledging  the 

to   satisfy   his   private    debt.     In    both  partnership  responsibility  in  a  matter  in 

cases  the  act  is  equally  injurious  to  the  no  wise  connected  with  the  partnership 

other  partners ;  it  is  taking  their  com-  business ;  and  that  is  a  fraud  on  such  of 

mon  property  to  pay  a  private  debt  of  the  partners  as  do  not  assent  expressly 

one  of  the  partners."     And  again,  in  a  that  the  firm  shall  be  bound.     When, 

later  case  (Foot  v.  Sabin,  19  Johns.  (N.  therefore,  it  appeared  from  the  plain- 

267 


172*                                     DOCTRINES  OF    AGENCY.                          [bOOK    II., 

account,  the  bankers  cannot  hold  those  goods  against  the  other  firm 
if  they  knew  wiien  the  goods  were  pledged  what  the  real  facts  were 

tiff's   own  showing  that   the'  note  was  nership  for  his  own  private  del)t,  a  bona 

signed  by  Holmes  as  principal,  and  by  fide  endorsee  of  the  note,  who  had  no 

Wilson  with  the  name  of  tiie  firm  of  notice  of  the  purpose  for  which  it  was 

Wilson  &  Foot,  as  sureties  for  Holmes,  given,  may  recover  the  amount  of  the 

nothing  was  shown   to  bind   Foot,  and  copartnership.      Munroe    v.   Cooper,    5 

the  plaintiff  failed  to  maintain  the  issue.  Pick.  (Mass.)  412;   Chazournes  v.  Ed- 

On  the  motion  for  a  nonsuit,  the  court  wards,  3  Id.  5 ;  Livingston  v.  Roosevelt, 

held    that   the    plaintiff  was    bound    to  4  Johns.  (N.  Y.)  25 ;  Mechanics' Bank, 

prove  the  authority  or  consent  of  Foot  &c ,  v.  Foster,  19  Abb.  (N.  Y.)  Pr.  47; 

to  the  making  the  note,  which  the  court  S.  C,  29  How.  Pr.  408.     See,  also,  Ful- 

considered  he  had  done.     There  was  no  ler  v.  Percival,  126  Mass.  381. 

proof  of   any  authority  or  consent  of  In  Arden  v.  Sharpe  (2  Esp.  524,  525) 

Foot,  except  the  proof  of  the  signature  Loi;fl  Kenyon  said :    "  The  bill  is   en- 

of  Wilson  of  the  name  of  the  firm.    The  dorsed  by  one  partner  in   the  name  of 

court,  then,  certainly  drew  a  very  in-  the  firm.     One  partner   certainly  may 

correct   legal    inference   from   the   fact  endorse  a  bill  in  the  partnership  name, 

proved."  and  if  it  goes  into  the  world  and  gets 

In  an  action  upon  a  note,  signed  by  into  the  hand  of  a  bona  fide  holder,  who 

one  of  two  partners  in  the  partnership  takes  it  on  the  credit  of  the  partnership 

name,  for  a  purpose  not  connected  with  name,  and   is  ignorant  of  the  circum- 

the  partnership,  and  without  the  knowl-  stances,  though  in  fact  the  bill  was  first 

edge   of    the   other   partner,   testimony  discounted  for  that  one   partner's  own 

tending  to  show  a  subsequent  recognition  use,  in  such  case  the  partnership  is  lia- 

of  the  note  by  the  latter  is  within  the  ble.     But  the  case  is  different  where  the 

exclusive  jurisdiction    of    the  jury    to  party  who  brings  the  action  was  himself 

Weigli.     Jones  v.  Booth,  10  Vt.  268.  the  person  who  took  the  bill  with  the 

Where  one  of   two  partners,  during  endorsement  by  one  partner  only,  and 

the  existence  of  the  partnership,  gave  a  was  informed  that  the  transaction  was 

promissory  note  in  the  name  of  the  firm  to   be   concealed    from   the   other.     He 

for  his  private  debt,  and  the  other  part-  cannot  sue  the  partnership.     The  trans- 

ner  afterwards,  knowing  these  facts,  by  a  action  indicates  that  the  money  was  for 

promise  to   pay  the  note,   induced  the  that  partner's  own  use,  and  not  raised 

holder  to  forbear  attempting  to  collect  on  the  partnership  account;  therefore, 

it,  it  was  held  that  a  jury  should   be  he  shall  not  be  allowed  to  resort  to  the 

warranted  in  returning  a  verdict  against  security  of  the  partnership,  to  whom,  in 

both  in  an  action  on  the  note,  without  the    original     transaction,    he    neither 

expressly  finding  that  the  note  had  been  looked  nor  trusted."     See,  also.  Chase  v. 

ratified  by  the  other  partner.     Wheeler  Bean,  58  N.  H.  183. 

V.  Rice,  8  Cush.  (Mass.)  205.  If  a  partner  draws  notes  in  the  name 

Rights  of  bona  fide  endorsees,  and  of  the  firm,  payable  to  himself,  and  then 

who  are  deemed   innocent    purchas-  endorses  them  to  a  third  party  for  a  per- 

ers    for    value. — If   a    i)artner   gave  a  sonal  and  not  a  partnership  considera- 

negotiable  note  in  tiie  name  of  the  part-  tion,  the  first  endorsee  cannot  maintain 

268 


CHAP.  I.,  §  IV.]                UNAUTHORIZED   ACTS.  172* 

respecting  them,  (r)     So,  if  one  partner  pays  a  separate  debt  of  his 

own  with  money  of  the  firm,  and  the  creditor  who  is  paid  is  aware 

of  the  facts,  he  cannot  retain  the  money  as  against  the  firm,  unless 
he  can  prove  that  tlie  payment  was  authorized  by  the  other  part- 
ners, or  unless  they  have  estopped  themselves  from  denying  the 
authority,  (.s)  52 

an  action  on  them  against  the  firm  if  he  (Mass.)  259. 

knew    that   the   notes   were    antedated.  (r)  Snaith  v.  Burridge,  4  Taunt.  684. 

Smyih  V.  Strader,  4  How.  (U.  S.)  404.  (s)  Kendall  i;.  Wood,    L.  E.,  6   Ex. 

When  a  note  payable  to  a  partnership  243 ;  Heilbut  v.  Nevill,  L.  R.,  4  C.  P. 
is  transferred  by  one  partner  for  the  pay-  354,  and  5  Id.  478.  See  further  as  to 
ment  of  his  individual  debts,  the  pur-  such  cases,  anJe  pp.  *1 65,  *166. 
chaser  acquires  only  the  assignor's  in-  52.  Pledge  of  firm  assets  for  indi- 
terest,  and  holds  the  note  subject  in  vidual  debt.— The  rule  is  well  settled 
equity  to  the  claim  of  the  other  part-  that  a  partner  cannot  employ  the  part- 
ners ;  and  an  assignee  who  purchases  for  nership  funds  to  pay  his  own  pre-exist- 
cash,  after  the  maturity  of  the  note,  and  ing  debt,  without  the  express  or  implied 
while  it  is  in  the  hands  of  an  attorney  assent  of  the  other  partners.  Rogers  v. 
for  suit,  relying  upon  his  assignor's  rep-  Batchelor,  12  Pet.  (U.  S.)  221 ;  Pierce  v. 
resentations  as  to  the  state  of  accounts  Pass,  1  Port.  (Ala.)  232;  Burwell  v. 
between  his  copartner  and  himself,  and  Springfield,  15  Ala.  273 ;  Nail  v.  Mcln- 
his  right  to  dispose  of  the  note,  is  af-  tyre,  31  Ala.  532;  Filley  v.  Phelps,  18 
fected  with  notice  of  the  other  partner's  Conn.  294 ;  Thomas  v.  Stetson,  62  Iowa 
interest  upon  a  settlement  of  the  part-  537  ;  S.  C,  49  Am.  Rep.  148;  Bourne  v. 
nership  accounts.  Halstead  v.  Shepard,  Woodbridge,  10  B.  Mon.  (Ky.)  492 ; 
23  Ala.  558.  Jackson  v.  Holioway,  14  Id.  133  ;  Jones 

An  endorsee  of  a  note  endorsed  by  v.  Lusk,  2  Mete.  (Ky.)  356;  Minor  v, 
one  of  several  partners,  in  the  partner-  Gaw,  11  Sm.  &  M.  (Miss.)  322;  Btick 
ship  name,  for  his  individual  purposes,  v.  Mosley,  24  Miss.  170;  Steinhart  v. 
without  the  consent  or  knowledge  of  the  Fyhrie,  5  Mont.  T.  463  ;  Dob  v.  Halsey, 
other  partners,  cannot  avail  himself  of  16  Johns.  (N.  Y.)  34 ;  Leonard  v.  Wins- 
such  note  to  subject  the  partnership,  low,  2  Grant  (Pa.)  Cas.  139 ;  Purdy  v. 
even  if  he  did  not  know  that  it  was  en-  Powers,  6  Pa.  St.  492 ;  McKinney  v. 
dorsed  under  such  circumstances,  where  Brights,  16  Pa.  St.  399 ;  Goode  v.  Mc- 
his  ignorance  arises  from  gross  negli-  Cartney,  10  Tex.  193 ;  Dana  v.  Conant, 
gence.  New  York  Fire  Ins.  Co.  v.  30  Vt.  246 ;  Sauntry  t^  Dunlap,  12  Wis. 
Bennett,  5  Conn.  574.  364.     Thus,  one   partner  cannot   mort- 

An  endorsee  who  receives,  six  months  gage  the   stock  of  the  firm,  under   his 

after  date,    as   collateral  security  from  ontrol,  for  his  individual  debt  (Molina 

the  payee,  a  note  on  demand,  given  in  Wagon  Co.  v.  Rummell,  12  Fed.  Rep. 

the  name  of  a  partnership  to  one  of  the  658  ;  S.  C,  2  McCrary  (U.  S.)  307,  so  as  to 

firm,  takes  it  subject  to  all   the  equity  deprive  his  copartner  of  his  rights  in  the 

existing  against  it  in  the  hands  of  the  property  as  security  for  money  advanced 

payee.      Thompson    v.    Hale,   6    Pick,  by  him  for  the  firm,  (Deeter  v.  Sellers, 

269 


172*                                   DOCTRINES   OF   AGENCY.  [bOOK   II., 

Private  bargain  by  one  par-tner. — Another  case,  illustrating  the 
want  of  authority  of  one  partner  to  bind  the  firm  by  transactions 
enuring  only  to  his  advantage,  is  afforded  by  Bignokl  v.  Watcr- 

102  Ind.  458)  ;  and  a  subsequent  bona  itself.  It  is,  therefore,  analogous  to  that 
Jide  sale  of  the  mortgaged  property  for  which  is  conferred  on  an  agent,  appoint- 
the  benefit  of  the  j)artnership  is  good  as  ed  for  a  special  purpose,  who,  if  he  ex- 
against  such  mortgage.  Shaw  v.  Mc-  ceed  his  authority,  cannot  bind  his 
Donald,  21  Ga.  395.  principal.  Fenn  v.  Harrison,,  o  T.  R. 
In  Livingston  v.  Roosevelt  (4  Johns.  757.  Thi^  analogy  is  complete,  in  all 
(N.  Y.)  251,  265),  in  speaking  of  this  cases,  where  third  persons  have  dealings 
subject,  Van  Ness,  J.,  said:  "The  dis-  with  a  special  partner,  with  notice  that 
tinction  between  general  and  special  he  is  such.  And,  accordingly,  it  has 
partnerships  is  probably  coeval  with  been  repeatedly  ruled  that  whenever 
their  existence.  A  general  rule,  appli-  such  a  partner  pledges  the  partnership 
cable  to  both,  is  that  in  transactions  re-  funds  or  credit  in  a  transaction  which  is 
lating  to  the  joint  concern,  one  of  several  known  to  be  unconnected  with,  and  not 
partners  may  bind  the  rest.  He  may  fairly  and  reasonably  within  the  corn- 
sign  notes,  endorse  or  accept  bills  for  pass  of  the  partnership,  it  is,  as  to  the 
the  common  benefit,  &c.,  without  apply-  other  partners,  fraudulent  and  void, 
ing  to  the  rest  in  every  particular  case.  They,  however,  to  entitle  themselves  to 
But  this  authority  of  a  single  partner  the  protection  of  this  rule  of  law  must 
has  its  limitations.  Formerly,  as  appears  not  do,  or  consent  to,  or  suffer  anything 
by  the  case  of  Pinkney  v.  Hall,  1  Salk.  to  be  done,  which  may  hold  them  out 
126,  and  S.  C,  1  Ld.  Raym.  175,  it  was  to  the  world  as  general  partners  ;  and  it 
probably  less  extensive  than  at  this  day.  would  always  be  prudent  and  proper 
One  partner  of  the  concern  has  no  au-  (though  I  will  not  say  it  is  indispensably 
thority  to  pledge  the  partnership  goods  necessary)  to  give  public  notice  to  the 
for  his  own  debt ;  nor  can  he  bind  the  community  that  the  partnership  is 
firm  to  any  engagements  known  at  the  special,  and  of  the  particular  species  of 
time  to  be  unconnected  with  and  foreign  traffic  or  business  to  which  it  is  con- 
to  the  partnership.  This  has  not  only  fined.  Willet  v.  Chambers,  Cowp.  814  ; 
been  so  settled  by  this  court,  but  now  is  De  Berkom  v.  Smith,  1  Esp.  29 ;  Arden 
and  always  has  been  the  established  law  v.  Sharpe,  5  Esp.  524  ;  Shirreff  t).  Wilks, 
in  England.  Not  an  adjudged  case,  nor,  1  East  48.  In  the  case  Ex  parte  Bon- 
I  believe,  a  single  dictum,  can  be  found  bonus,  8  Ves.  540,  Lord  Eldon  expresses 
the  other  way.  This  will  appear  from  himself  thus:  'I  agree  it  is  settled  that 
most  of  the  cases  which  I  shall  presently  If  a  man  gives  a  partnership  engagement 
have  occasion  to  mention  for  another  in  the  partnership  name,  with  regard  to 
purpose.  In  special  partnerships,  how-  a  transaction  not  in  its  nature  a  partner- 
ever,  this  power  of  the  individuals  com-  ship  transaction,  he  who  seeks  the  benefit 
posing  them  is  restricted  to  still  narrower  of  that  engagement  must  be  able  to  say 
limits,  and  can  only  be  legally  exercised  that  though  in  its  nature  not  a  particular 
within  the  compass  of  that  particular  transaction,  yet  there  was  some  authority, 
businessto  which  the  partnership  relates,  beyond  the  mere  circumstance  of  part- 
It  is  as  circumscribed  as  the  partnership  nership,  to  enter  into  that  contract  so  as 

270 


UXAUTHORIZED    ACTS. 


172^ 


€HAP.  I.,  §  IV. J 

house.  (^)  There*  the  defendants  were  proprietors  of  a  coach  run- 
ning between  London  and  Norwich,  and  they,  by  notice  affixed  in 
their  office,  stated  that  they  would  not  be  accountable  for  any  par- 


te bind  the  partnership  ;  and  then  it  de- 
pends upon  the  degree  of  evidence.' " 

Limits  and  exceptions  to  the  rule. 
— Where  one  partner  uses  the  effects  of 
the  firm  in  the  payment  of  his  private 
■debts,  with  the  consent  and  knowledge 
of  his  copartner,  an  action  by  the  firm 
for  the  price  of  these  effects  will  be 
barred.  Carter  v.  Beaman,  6  Jones  (N. 
C.)  L.  44.  So,  while  one  partner  can- 
not appropriate  the  partnership  effects 
to  the  payment  of  his  individual  debts, 
yet  he  may  say  to  a  hotel-keeper,  "  Buy 
your  groceries  of  us,  and  we  will  take  it 
out,  in  whole  or  in  part,  in  the  board 
either  of  ourselves  or  of  our  clerks," 
and  this  contract  will  bind  the  firm. 
Perry  v.  Butt,  14  Ga.  699  ;  and  although 
a  mortgage,  by  a  partner,  of  firm  prop- 
erty without  his  copartners'  consent,  to 
secure  his  individual  debt,  will  not  be 
permitted  to  operate  as  a  mortgage,  yet 
if,  on  a  payment  of  the  firm  debts  and  a 
division  of  the  assets  of  the  firm,  such 
mortgaged  property  falls  to  the  mort- 
gagor, it  becomes  operative  and  can  be 
enforced.  Smith  v.  Andrews,  49  111.  28. 
Burden  of  proving  consent  of  other 
partner  is  on  the  creditor. — In  Frank- 
land  V.  M'Gusty  (1  Knapp  274,  301), 
Sir  John  Leach,  Master  of  the  Rolls,  in 
delivering  the  opinion  of  the  court,  said  : 
"  I  take  it  to  be  clear,  from  all  the  cases 
upon  the  subject,  that  it  lies  upon  a  sepa- 
rate creditor,  who  takes  a  partnership 
security  for  the  payment  of  his  separate 
debt,  if  it  be  taken  simpliciter,  and  there 
is  nothing  more  in  the  case,  to  prove 
that  it  was  given  with  the  consent  of  the 
other  partners.    But  there  may  be  other 


circumstances  attending  the  transaction 
which  may  afford  the  separate  creditor 
a  reasonable  ground  of  belief  that  the 
security,  so  given  in  the  partnership 
name,  is  given  with  the  consent  of  the 
other  partners  ;  and  those  circumstances 
occurred  in  the  case  which  was  cited, 
and  which  seemed  to  be  inconsistent 
with  the  other  authorities.  I  refer  now 
to  the  case  of  Eidley  v.  Taylor.  In  that 
case  the  bill  was  dated  eighteen  days 
before  its  delivery  by  the  partner  to  his 
separate  creditor,  and  it  was  not  known 
by  the  creditor  that  it  was  drawn  and 
endorsed  by  the  debtor  alone ;  and  the 
bill  was  to  a  greater  amount  than  the 
separate  debt.  The  court  therefore  were 
of  opinion  that  there  was  reasonable 
ground  for  the  separate  creditor  believ- 
iv.i  it  not  to  have  been  given  to  him  in 
fraud  of  the  partnership,  and  that  the 
general  presumption  that  a  partnership 
security,  when  applied  in  payment  of  a 
separate  debt,  is  in  fraud  of  the  partner- 
ship, was  repelled  by  the  special  circum- 
stances which  belonged  to  that  particu- 
lar occasion.  Upon  a  consideration, 
therefore,  of  all  the  authorities,  I  am  of 
opinion  that  the  law  is  that,  taken  sim- 
pliciler,  the  separate  creditor  must  show 
the  knowledge  of  the  partnership;  but 
if  there  are  circumstances  to  show  a 
reasonable  belief  that  it  was  given  with 
the  consent  of  the  partnership,  it  lies 
upon  the  partners  to  prove  the  fraud. 
I  think  that  will  reconcile  all  the  cases." 
Thus,  where.a  promissory  note,  belong- 
ing to  a  partnership,  is  transferred  or 
paid  over  by  an  individual  member 
thereof,  in  satisfaction  of  his  own  private 


(0  1  Mau.  &  S.  255. 


271 


172* 


DOCTRINES    OF   AGENCY. 


[book   II., 


eel  above  the  value  of  £5,  unless  the  same  was  entered  and  paid 
for  accordingly.  The  plaintiffs  were  bankers  at  Norwich,  and  one 
of  the  defendants,  for  a  consideration  moving  to  him  alone,  agreed 

debt,  it  is  incumbent  on  the  plaintiffs,  The  authority  of  each  partner  to  dis- 
in  a  suit  brought  on  the  note,  to  show  pose  of  the  partnership  funds,  strictly 
the  assent  of  the  other  partnei-,  in  order  and  rightfully,  extends  only  to  the  part- 
to  bind  him ;  and  such  knowledge  and  uership  business,  though  in  the  case  of 
assent  must  be  clearly  shown,  and  not  bona  fide  purchasers,  without  notice,  for 
left  to  be  inferred  from  vague  and  slight  a  valuable  consideration,  the  partnership 
circumstances.  Kemeys  v.  Richards,  11  may,  in  certain  cases,  be  bound  by  the 
Barb.  (N.  Y.)  312;  Meciitchen  v.  Ken-  act  of  one  partner.  But  if  the  negoti- 
nady,  3  Dutch.  (N.  J.)  230.  Such  assent  able  paper  of  a  firm  be  given  by  one 
cannot  be  implied  from  the  partnership  partner  on  his  private  account,  and  that 
relations;  it  must  be  proved.  Brewster  paper,  issued  wiliiin  the  general  scope 
V.  Mott,  4  Scam.  (111.)  378.  of  the  authority  of  the  firm,  passes  into 

It  is  not  competent  to  charge  a  firm  the  hands  of  a  bona  fide  holder,  who  has 
for  the  act  of  a  partner  in  giving  firm  no  notice,  either  actually  or  construc- 
security  for  an  endorsement  of  his  indi-  tively,  of  the  consideration  of  the  in- 
vidual  note,  by  evidence  that  at  the  time  strument ;  or  if  one  partner  should  pur- 
of  obtaining  the  endorsement  the  partner  chase,  on  his  private  account,  an  article 
stated  that  the  money  was  wanted  for  in  which  the  firm  dealt,  or  which  had 
the  use  of  the  firm.  Uhler  v.  Browning,  an  immediate  connection  with  the  busi- 
4  Dutch.  (N.  J.)  79.  The  unexplained  ness  of  the  firm,  a  different  rule  applies, 
fact  that  a  partnership  security  has  been  and  one  which  requires  the  knowledge 
received  from  one  of  the  partners  in  of  its  being  a  private,  and  not  a  partner- 
discharge  of  a  separate  claim  against  ship  transaction,  to  be  brought  home  to 
himself,  is  a  badge  of  fraud,  or  of  such  the  claimant.  These  are  general  prin- 
palpable  negligence  as  amounts  to  fraud,  ciples,  which  are  considered  to  be  well 
which  it  is  incumbent  on  the  party  who  established  in  the  English  and  American 
so  took  the  security  to  remove,  by  show-  jurisprudence."  This  rule  that  the  cred- 
ing  either  that  the  partner  from  whom  itor's  ignorance  of  the  partnership  own- 
he  received  it  acted  under  the  authority  ership  will  not  shield  him,  is  also 
of  the  rest,  or  at  least  that  he  himself  adopted  in  Moriarty  v.  Bailey,  46  Conn, 
had  reason  to  believe  so.  Smith  on  592 ;  Ackles  v.  Stockle,  56  Me.  558  ; 
Merc.  Law,  p.  44.  Liberty  Savings  Bank  v.  Campbell,  75 

Rights  of  creditors  acting  in  good  Va.  534. 
faith.— Chancellor  Kent  says:  "It  is  a  The  fullest  discussion  of  this  seem- 
well-established  doctrine  that  one  part-  ingly  harsh  rule  is  to  be  found  in 
ner  cannot  rightfully  apply  the  partner-  Rogers  v.  Batchelor  (12  Pet.  (U.  S.) 
ship  funds  to  discharge  his  own  pre-  221,  229),  where  Mr.  Justice  Story,  in 
existing  debts,  without  the  express  or  delivering  the  opinion  of  the  court,  said  : 
implied  assent  of  the  other  partners.  "The  first  instruction  raises  these  ques- 
This  is  the  case,  even  if  the  creditor  had  tions  :  whether  the  funds  of  a  jiartner- 
no  knowledge,  at  the  time,  of  the  fact  of  ship  can  be  rightfully  applied  by  one 
the   fund   being   partnership   property,  partner  to  the  discharge  of  his  own  sep- 

272 


CHAP.  I.,  §  IV.]  UNAUTHORIZED    ACTS.  172* 

that  the  plaintiffs'  parcels  should  always  go  free  by  the  coach. 
This  agreement  was  acted  on  for  some  time,  but  it  did  not  appear 
that  the  other  defendants  were  aware  of  its  existence,  or  of  the  fact 


arate  pre-existing  debt,  without  the  as- 
sent, express  or  implied,  of  the  other 
partner;  and  whether  it  makes  any  dif- 
ference, in  such  a  case,  that  the  separate 
creditor  had  no  knowledge,  at  the  time, 
of  the  fact  of  the  fund  being  partnership 
property.  We  are  of  opinion  in  the 
negative  on  both  questions.  The  im- 
plied authority  of  each  partner  to  dis- 
pose of  the  partnership  funds  strictly 
and  rightfully  extends  only  to  the  busi- 
ness and  transactions  of  the  partnership 
itself;  and  any  disposition  of  those  funds, 
by  any  partner,  beyond  such  purposes, 
is  an  excess  of  his  authority  as  partner, 
and  a  misappropriation  of  those  funds 
for  which  the  partner  is  responsiV^Ie  to 
the  partnership  ;  though  in  the  case  of 
bona  fide  purchasers,  without  notice,  for 
a  valuable  consideration,  the  partnership 
may  be  bound  by  such  acts.  Whatever 
acts,  therefore,  are  done  by  any  partner, 
in  regard  to  partnership  property  or  con- 
tracts, beyond  the  scope  and  objects  of 
the  partnership,  must,  in  general,  in 
order  to  bind  the  partnership,  be  derived 
from  some  further  authority,  express  or 
implied,  conferred  upon  such  partner, 
beyond  that  resulting  from  his  character 
as  partner.  Such  is  the  general  princi- 
ple ;  and,  in  our  judgment,  it  is  founded 
in  good  sense  and  reason.  One  man 
ought  not  to  be  permitted  to  dispose  of 
the  property,  or  to  bind  the  rights  of 
another,  unless  the  latter  has  authorized 
the  act.  In  the  case  of  a  partcer  paying 
his  own  separate  debt  out  of  the  partner- 
ship funds,  it  is  manifest  that  it  is  a  vio- 
lation of  his  duty  and  of  the  rights  of 
his  partners,  unless  they  have  assented 
to  it.  The  act  is  an  illegal  conversion 
of  the  funds ;  and  the  separate  creditor 

27 


can  have  no  better  title  to  the  funds 
than  the  partner  himself  had.  Does  it 
make  any  difference  that  the  separate 
creditor  had  no  knowledge,  at  the  time, 
that  tliere  was  a  misappropriation  of  the 
partnership  funds  ?  We  think  not.  If 
he  had  such  knowledge,  undoubtedly  he 
would  be  guilty  of  gross  fraud,  not  only 
in  morals,  but  in  law.  That  was  ex- 
pressly decided  in  Shirreff  v.  Wilks  (1 
East  48) ;  and,  indeed,  seems  too  plain, 
upon  principle,  to  admit  of  any  serious 
doubt.  But  we  do  not  think  that  such 
knowledge  is  an  essential  ingredient  in 
such  a  case.  The  true  question  is 
whether  the  title  to  the  property  has 
passed  from  the  partnership  to  the  sepa- 
rate creditor.  If  it  has  not,  then  the 
partnership  may  re-assert  their  claim  to 
it  in  the  hands  of  such  creditor.  The 
case  of  Ridley  v.  Taylor  (13  East  175) 
has  been  supposed  to  inculcate  a  differ- 
ent and  more  modified  doctrine.  But 
upon  a  close  examination  it  will  be  found 
to  have  turned  upon  its  own  peculiar  cir- 
cumstances. Lord  Ellenborough,in  that 
case,  admitted  that  one  partner  could 
not  pledge  the  partnership  property 
for  his  own  separate  debt ;  and  if  he 
could  not  do  such  an  act  of  a  limited 
nature,  it  is  somewhat  difficult  to  see 
how  he  could  do  an  act  of  a  higher 
nature,  and  sell  the  property.  And  his 
judgment  seems  to  have  been  greatly 
influenced  by  the  consideration  that  the 
creditor  in  that  case  might  fairly  pre- 
sume that  the  partner  was  the  real 
owner  of  the  partnership  security,  and 
that  there  was  an  absence  of  all  the  evi- 
dence (which  existed,  and  might  have 
been  produced)  to  show  that  the  other 
partner    did    not    know,    and    had    not 

3  18 


172* 


DOCTRIXES   OF   AGENCY. 


[book  II., 


that  the  plaintiffs  were  treated  differently  from  other  people.     A 
parcel  of  the  plaintiffs,  sent  by  the  coach,  being  lost,  it  was  held 


authorized  the  act.  If  it  had  appeared 
from  any  evidence  tliat  the  act  was  un- 
known to,  or  unauthorized  by,  the  other 
partners,  it  is  very  far  from  being  clear 
that  the  case  could  have  been  decided 
in  favor  of  the  separate  creditor,  for  his 
lordship  seems  to  have  put  the  case 
upon  the  ground  that  either  actual  covin 
in  the  creditor  should  be  shown,  or  tiiat 
there  should  be  pregnant  evidence  that 
the  act  was  unauthorized  by  the  other 
partners.  The  case  of  Green  v.  Deakin 
(2  Stark.  347),  before  Lord  Ellenbo rough, 
seems  to  have  proceeded  upon  the  ground 
that  fraud,  or  knowledge  by  the  separate 
creditor,  was  not  a  necessary  ingredient. 
In  the  recent  case.  Ex  parte  Goulding, 
cited  in  Coll.  on  Part.  (1st  ed.),  283,  284, 
the  Vice  Chancellor,  Sir  John  Leach, 
seems  to  have  adopted  the  broad  ground 
upon  which  we  are  disposed  to  place  the 
doctrine.  Upon  the  appeal,  his  decision 
was  confirmed  by  Lord  Lyndhurst. 
Upon  that  occasion  his  lordship  said : 
'No  principle  can  be  more  clear  than 
that  where  a  partner  and  a  creditor 
enter  into  a  contract  on  a  separate  ac- 
count the  partner  cannot  pledge  the 
partnership  funds,  or  give  the  partner- 
ship acceptances  in  discharge  of  this 
contract,  so  as  to  bind  the  firm.'  There 
was  no  pretence  in  that  case  of  any 
fraud  on  the  part  of  the  separate  creditor. 
And  Lord  Lyndhurst  seems  to  have  put 
his  judgment  upon  the  ground  that  un- 
less the  other  partner  assented  to  the 
transaction  he  was  not  bound,  and  that 
it  was  the  duty  of  the  creditor  to  ascer- 
tain whether  there  was  such  assent  or 
not.  The  same  question  has  been  dis- 
cussed in  the  American  courts  on  various 
occasions.  In  Dob  v.  Halsey  (16  Johns. 
(N.  Y.)  34)  it  was   held    by  the   court 

2 


that  one  partner  could  not  apply  part- 
nership propert}'  to  the  payment  of  his 
own  separate  debt,  without  the  assent 
of  the  other  partners.  On  that  occasion 
Mr.  Chief  Justice  Spencer  stated  the 
difference  between  the  decisions  in  New 
York  and  those  in  England  to  be  merely 
this :  that  in  New  York  the  court  re- 
quired the  separate  creditor,  who  had 
obtained  the  partnership  paper  for  the 
private  debt  of  one  of  the  partners,  to 
show  the  assent  of  the  whole  firm  to  be 
bound  ;  and  that  in  England  the  burden 
of  proof  was  on  the  other  partners  to 
show  their  want  of  knowledge  or  dissent. 
The  learned  judge  added :  '  I  can  per- 
ceive no  substantial  difference  whether 
the  note  of  a  firm  be  taken  for  a  private 
debt  of  one  of  the  partners  by  a  separate 
creditor  of  a  partner,  pledging  the  se- 
curity of  the  firm,  and  taking  the  proj> 
erty  of  the  firm  upon  a  purcliase  of  one 
of  the  partners  to  pay  his  private  debt. 
In  both  cases  the  act  is  equally  injurious 
to  the  other  partners.  It  is  taking  their 
common  property  to  pay  a  private  debt 
of  one  of  the  partners.'  The  same  doc- 
trine has  been,  on  various  occasions, 
fully  recognized  in  the  Supreme  Court 
of  the  same  state.  And  we  need  do  no 
more  than  refer  to  one  of  the  latest,  the 
case  of  Everingham  v.  Ensworth,  7  Wend. 
(N.  Y.)  326.  Indeed,  it  had  been  fully 
considered  long  before,  in  Livingston  v. 
Koosevelt,  4  Johns.  (N.  Y.)  251.  It  is 
true  that  the  precise  point  now  before 
us  does  not  appear  to  have  received  any 
direct  adjudication,  for  in  all  the  cases 
above  mentioned  there  was  a  known 
application  of  the  funds  or  securities  of 
the  partnersiiip  to  the  payment  of  the 
separate  debt.  But  we  think  that  the 
true  principle  to  be  extracted  from  the 

74 


CHAP.  I.,  §  IV.]  UNAUTHORIZED    ACTS.  173* 

that  the  contract  entered  into  by  *the  one  defendant  was  ^=^=-.-73 
not  binding  oil  the  others,  and  that  they  were  not  liable  for 

authorities  is  that  one  partner  cannot  the  goods  of  the  partnership,  is  valid 
apply  the  partnership  funds  or  securities  against  the  partnership  and  its  creditors, 
to  the  discharge  of  his  own  private  debt  And  in  Kellogg  v.  Fancher  (23  Wis.  21) 
without  their  consent;  and  that  without  it  is  said  that  one  who,  in  ignorance  of 
their  consent  their  title  to  the  property  a  copartnership,  takes,  in  payment  of  the 
is  not  divested  in  favor  of  such  separate  individual  note  of  a  member  given  for 
creditor,  whether  he  knew  it  to  be  part-  his  private  debt,  notes  of  third  parties 
nership  property  or  not.  In  short,  his  running  to  such  member,  but  in  fact  the 
right  depends,  not  upon  his  knowledge  property  of  the  copartnership,  will  be 
that  it  was  partnership  property,  but  protected  as  a  6o/ia/<Ze  holder  for  value, 
upon  the  fact  whether  the  other  part-  See,  al!=o,  Flannagan  v.  Alexander,  50 
ners  had  assented  to  such  disposition  of  Mo.  50 ;  Nichols  v.  Sober,  38  Mich, 
it  or  not."  678. 

But  there  are  authorities  which  up-  Rights  of  defrauded  firm  and  its 
hold  a  less  stringent  rule.  Thus,  in  creditors.— Where  a  partner  fraudu- 
Warren  v.  French  (6  Allen  (Mass.)  317)  lently,  without  the  consent  of  his  co- 
it  is  held  that  if  it  is  within  the  ordi-  partners,  applies  the  partnership  funds 
nary  course  of  a  partnership  business  to  his  private  purposes  and  profit,  or  in- 
for  one  partner  to  borrow  money  on  the  vests  the  same  in  his  own  name  and  for 
credit  of  a  firm,  proof  that  a  loan  is  his  own  use,  his  copartners  may,  if  they 
made  to  the  firm  at  their  place  of  busi-  can  distinctly  trace  the  investment,  fol- 
ness,  through  one  of  the  partners,  at  six  low  it  and  treat  it  as  trust  property  held 
per  cent.,  upon  a  statement  by  the  latter  for  the  benefit  of  the  firm  by  the  part- 
that  the  firm  could  use  the  money  to  ad-  ner  or  by  any  person  in  whose  hands  it 
vantage  at  that  rate;  that  the  lender  may  be,  except  a  bona  fide  purchaser, 
took  a  transfer  of  bank  stock  as  collat-  without  notice.  Kelley  v.  Greenleaf,  3 
eral  security,  and  that  he  knew  that  the  Story  (U.  S.)  93;  Croughton  v.  Forrest, 
partner  with   whom  he  transacted   the    17  Miss.  131. 

business  owned  real  estate,  in  which  the  On  the  failure  of  a  partnership,  an 
firm  was  not  interested — is  not  sufficient  appropriation  of  the  joint  property  by 
to  affect  the  lender,  if  he  acted  in  good  one  partner  to  pay  his  individual  debt 
faith,  with  constructive  notice  of  fraud  in  is  fraudulent  and  void  as  against  the 
snAi  partner  in  procuring  the  money  for  partnership  creditors.  Yale  v.  Yale,  13 
his  own  personal  use.  In  Locke  v.  Lewis  Conn.  185.  S.  P.,  French  v.  Lovejoy,  12 
(124  Mass.  1)  it  is  held  that  a  sale  by  a    N.  H.  458. 

partner,  in  payment  of  his  own  debt,  of  One  partner  has  no  right  to  assign  to 
goods  which  are  in  fact  goods  of  the  his  separate  creditors  any  portion  of  the 
partnership,  but  which  the  partnership  eflects  of  the.  partnership,  to  the  preju- 
has  so  entrusted  to  him  as  to  enable  him  dice  of  the  partnership  creditors.  Black 
to  deal  with  as  his  own,  and  to  induce  v.  Bush,  7  B.  Mon.  (Ky.)  210. 
the  public  to  believe  to  be  his,  and  When  a  banker  has  the  funds  of  a 
which  the  creditor  receives  in  good  firm  deposited  with  him  for  the  purpose 
faith  and  without  notice  that  thev  are    of  its  especial  business,  and  knows  that 

275 


173* 


DOCTRINES   OF   AGENCY. 


[book  II., 


the  loss  of  the  parcel,  its  value  not  having  been  declared,  as  required 
by  the  notice.  53 


one  of  the  firm  is  engaged  in  individual 
speculations,  and  transfers  these  funds 
to  tlie  separate  account  of  this  member 
and  with  a  knowledge  that  the  latter 
appropriates  the  funds  to  such  specula- 
tions, the  banker  is  liable  to  the  firm  for 
the  funds  thus  misapplied,  unless  they 
first  assure  him  of  their  consent.  Bil- 
lings V.  Meigs,  53  Barb.  (N.  Y.)  272. 
See,  also,  Johnson  v.  Crichton,  56  Md. 
108;  Forney  v.  Adams,  74  Mo.  138; 
Hartley  v.  White,  94  Pa  St.  31  ;  Steb- 
bins  V.  Willard,  53  Vt.  665  ;  Estabrook 
V.  Messersmith,  18  Wis.  545  ;  Viles  v. 
Bangs,  36  Id.  131. 

53.  Private  bargain  by  one  part- 
ner.— A  copartnership  is  not  chargeable 
for  goods  sold  to  one  of  the  partners  for 
his  separate  use,  although  he  ordered 
them  to  be  charged  to  the  firm,  if  the 
vendor  knew  at  the  time  that  they  were 
for  the  sole  use  of  that  partner.  Gullat 
V.  Tucker,  2  Cranch  (U.  S.)  C.  C.  33; 
Bird  V.  Lanius,  7  Ind.  615. 

So,  where  one  partner  agrees  with  a 
physician,  who  knows  of  the  existence 
of  the  firm,  to  let  the  latter  have  goods 
from  the  partnership  in  payment  for 
professional  services  rendered  or  to  be 
rendered  to  such  partner  individually, 
such  agreement  is  not  binding  on  his  co- 
partner, or  the  firm,  unless  expressly 
authorized  or  subsequentl^ratified.  Host 
V.  Clarke,  56  .\la.  19. 

W^here  a  partner,  without  tlie  knowl- 
edge or  consent  of  his  copartners,  fraudu- 
lently misapplies  partnership  funds  to 
his  own  private  trade,  he  will  be  liable 
to  his  copartners,  not  only  for  the  inter- 
est on  such  funds,  but  also  for  the  profits 
which  he  has  made  by  them.  Solomon 
V.  Solomon,  2  Ga.  18. 

A  contract  by  one  of  two  partners  in 


the  business  of  building  houses,  made 
without  the  knowledge  of  the  other,  to 
build  a  house  in  payment  of  a  private 
debt  of  his  own,  is  a  fraud  upon  the 
partnership,  and  void,  if  the  creditor 
knows  that  the  two  are  partners  in  that 
business;  and  if  both  partners  actually 
do  the  work,  they  or  their  assignee  in 
insolvency  may  recover  therefor  of  suck 
creditor,  without  proving  the  terms  of 
their  copartnership,  or  that  the  partner 
who  made  the  contract  agreed  that  the 
work  should  be  done  by  the  partner- 
ship. Williams  v.  Brimhall,  13  Gray 
(Mass.)  462. 

If  a  partner  buys  a  chattel  for  his  pri- 
vate use,  and  agrees  to  pay  for  it  io 
goods  to  be  delivered  by  his  firm  on  the 
order  of  the  seller,  and  the  firm  is 
changed  by  the  addition  of  a  new  mem- 
ber, but  continues  the  business  of  the  old 
firm  in  the  old  place,  and  subsequently 
the  goods  are  delivered  according  to  the 
agreement,  the  firm  cannot  maintain  an 
action  for  the  price  of  the  goods,  though 
the  other  members  of  the  firm  were 
ignorant  of  the  agreement.  Tay  v.  Ladd, 
15  Gray  (Mass.)  296. 

See,  however,  Greeley  v.  Wyeth  (10 
N.  H.  15),  where  it  was  held  that  where 
one  partner,  without  the  knowledge  of 
his  copartner,  makes  a  special  contract 
to  perform  labor  or  sell  goods  of  4he 
partnership,  and  to  take  in  pay  specific 
articles  for  his  own  use  ;  and  the  con- 
tract is  executed  by  the  parties  who 
make  it,  an  action  cannot  be  maintained 
in  the  name  of  the  partners,  to  recover 
the  value  of  the  goods  so  sold  or  labor 
performed,  on  the  ground  that  the  part- 
ner has  no  authority  to  make  such  con- 
tract. 


276 


CHAP.  I.,  §  IV.]  UNAUTHORIZED    ACTS.  173* 

Fraud  on  incoming  partners. — Tlie  same  principle  was  acted  upon 
in  the  important  and  well-known  case  of  Shirreff  v.  Wilks.  (w) 
There,  the  plaintiffs  sold  some  porter  to  Bishop  and  Wilks,  who 
were  partners,  and  the  porter  v/as  entered  in  the  plaintiffs'  books  in 
the  names  of  Bishop  and  Wilks.  Afterwards,  Robson  became  a 
partner  with  Bishop  and  Wilks,  and  the  plaintiffs,  knowing  this, 
drew  a  bill  on  all  three  partners  for  the  price  of  the  porter,  and 
Bishop  accepted  the  bill  in  the  name  of  the  three.  It  was  held  that 
Robson  was  not  liable  on  this  bill,  there  being  no  evidence  to  show 
that  he  knew  anything  of  it.  Lord  Kenyon  went  so  far  as  to  say 
that  the  transaction  was  fraudulent  on  the  face  of  it ;  but  that  is 
going  rather  far,  as  it  is  not  uncommon  for  incoming  partners  to 
agree  to  take  upon  themselves  the  existing  liabilities  of  the  firm. 
When  such  an  agreement  is  entered  into,  the  incoming  partner  can 
hardly  say  he  has  been  defrauded  if  a  bill  in  the  name  of  the  new 
firm  is  accepted  for  a  debt  of  the  old  firm  without  any  specific  au- 
thority on  his  part.  But  if  the  creditor  cannot  show  an  authority 
on  the  part  of  the  incoming  partner  for  the  acceptance  of  a  bill  in 
his  name  for  a  debt  of  the  old  firm,  the  principle  acted  on  in 
Shirreff  v.  Wilks  will  apply,  for  that  case  is  clear  law  and  has  often 
been  followed  as  such,  (x)  54 

Liability  of  retired  partners  after  notice. — The  doctrine  that  a 
person  who.  deals  with  a  partner,  knowing  that  he  is  exceeding  his 
authority,  cannot  impute  the  acts  of  that  partner  to  the  firm,  is 
further  illustrated  by  the  decisions  establishing  the  non-liability  of 
a  retired  partner  for  acts  done  by  his  copartners  after  notice  of  his 
retirement.     These  decisions  will  be  examined  at  length  hereafter. 

(m)  1  East  48.  is  acting  as  their  agent  in  so  doing.  The 

(x)  See   ante  p.  *171,  and   Ex   parte  mere  fact  of  their  relation  as  partners 

Goulding,  2  Glyn  &  J.  118  ;  Wilson  v.  will  not  make  them  liable.  Schwabacker 

Lewis,  2  Man.  &  G.  197,  and  9  Dowl.  v.  Riddle,  84  111.  517. 

Pr.  Cas.  18,  sub  nomine  Wilson  v.  Bailey.  One  partner  cannot  charge  a  copart- 

54.  Fraud  on  incoming  partners.—  ner  by  borrowing  money  in  the  name  of 

Where  one  partner  induces  a  stranger  to  the  firm  to  pay  debts  incurred  before  the 

purchase  the  interest  of  his  copartners,  copartner  came  into  the  firm,  and  which 

by  fraudulent  representations,  the  selling  he  has  in  no  way  assumed  or  made  him- 

partners  are  not  liable  for  the  fraud  un-  self  liable  for.    Elkin  v.  Green,  13  Bush 

less  they  instigate  or  approve  the  false  (Ky.)  61'' 
statements,  or  the  partner  making  them 

277 


173*  DOCTRINES    OF   AGENX'Y.  [bOOK    II., 

Notice  of  j)rivate  stipulations  of  jxii'tners. — Granting  that  a  per- 
son knowing  the  limits  of  a  partner's  authority,  as  set  by  his  co- 
partners, cannot  hold  them  responsible  for  an  act  done  by  him  in 
excess  of  his  authority,  it  still  remains  to  determine  the  effect  of 
notice  by  non-partners  of  stipulations  entered  into  between  the 
partners  themselves. 

*In  Gal  way  v.  Mathew(2/)  Lord  EUenborough  is  reported 
-I  to  have  said  :  "  It  is  not  essential  to  a  partnership  that  one 
partner  should  have  power  to  draw  bills  and  notes  in  the  part- 
nership firm  to  charge  the  other.  They  may  stipulate  between  them- 
selves that  it  shall  not  be  done;  and  if  a  third  jjerson,  having  notice 
of  this,  will  take  such  a  security  from  one  of  the  partners,  he  shall  not 
sue  the  others  upon  it  in  breach  of  such  stipulation." 

Again,  in  Alderson  v.  Pope,  (2)  the  same  judge  held  "that  where 
there  was  a  stipulation  between  A,  B  and  C,  who  appeared  to  the 
world  as  copartners,  that  C  should  not  participate  in  profit  and  loss 
and  should  not  be  liable  as  a  partner,  C  was  not  liable,  as  such,  to 
those  who  had  notice  of  this  stipulation." 

Principle  examined. — These  dicta  appear  to  authorize  the  state- 
ment that  if  partners  stipulate  amongst  themselves  that  certain 
things  shall  not  be  done,  no  person  who  is  aware  of  the  stipulation 
is  entitled  to  hold  the  firm  liable  for  what  may  be  done  by  one  of 
the  members  contrary  to  such  stipulation.  But  it  is  submitted  that 
this  proposition  is  too  wide.  A  stranger  dealing  with  a  partner  is 
entitled  to  hold  the  firm  liable  for  whatever  that  partner  may  do  on 
its  behalf  wnthin  certain  limits.  To  deprive  the  stranger  of  this 
right  he  ought  to  have  distinct  notice  that  the  firm  will  not  be  an- 
swerable for  the  acts  of  one  member,  even  within  these  limits,  (a) 
Now,  notice  of  an  agreement  between  the  members  that  one  of 
them  shall  not  do  certain  things  is  by  no  means  necessarily  equiva- 
lent to  notice  that  the  firm  will  not  be  answerable  for  them  if  he 
does.  For  there  is  nothing  inconsistent  in  an  agreement  between 
the  members  of  a  firm  that  certain  things  shall  not  be  done  by  one 
of  them,  and  a  readiness  on  the  part  of  all  the  members  to  be 

(y)  10  East  264.  notices,  Vice  v.  Fleming,  1  You.  &  J. 

(z)  1  Camp.  404.  227. 

(a)  See,  as  to  the  sufficiency  of  such 

278 


CHAP.  I.,  §  IV.]  UNAUTHORIZED    ACTS.  174* 

responsible  to  strangers  for  the  acts  of  each  other  as  if  no  such  an 
agreement  had  been  entered  into.  It  is  immaterial  to  a  stranger 
what  stipulations  })artners  may  make  amongst  themselves,  so  long 
as  they  do  not  seek  to  restrict  their  responsibility  as  to  him,  and  it 
is  only  when  knowledge  of  an  agreement  between  partners  neces- 
sarily involves  knowledge  that  they  decline  to  be  responsible  for 
the  acts  of  each  other  within  the  *ordinary  limits  that  a  r^^.^f; 
stranger's  rights  against  a  firm  can  be  prejudiced  by  what 
he  may  know  of  the  private  stipulations  between  its  members. 

In  Galway  v.  Mathew  (6)  the  plaintiff's  knowledge  of  want  of 
authority  was  derived,  not  from  notice  of  any  agreement  between 
the  partners,  but  from  an  advertisement  published  by  one  of  them, 
warning  all  persons  that  he  would  no  longer  be  liable  for  drafts 
drawn  by  the  others  on  the  partnership  account,  (c)  The  passage, 
therefore,  in  the  judgment  extracted  above,  was  by  no  means  neces- 
sary for  the  decision  of  the  case.  With  respect  to  Alderson  v. 
Pope,  {d)  if  all  that  was  meant  was  that  a  person  knowing  that  C 
did  not  authorize  A  or  B  to  act  on  his  behalf  could  not  hold  C 
liable  for  their  acts,  the  case  presents  no  difficulty ;  but,  if  anything 
more  than  this  was  meant,  the  authority  of  the  decision  becomes  at 
least  doubtful ;  for  it  has  been  held  in  another  case  that  a  person 
who  holds  himself  out  as  a  partner  with  others  with  whom  he  has 
no  concern  is  liable  for  their  acts,  even  to  persons  having  notice  of 
the  true  state  of  affairs ;  and  the  decision  was  based  upon  the  very 
ground  that  a  person  who  holds  himself  out  as  a  partner  with 
others  expresses  his  readiness  to  incur  the  responsibilities  of  a 
partner  as  regards  strangers,  whatever  he  may  intend  shall  be  the 
case  between  him  and  those  with  whom  he  associates  his  name,  (e) 

Private  stipulations  restrictive  of  liability. — Against  the  general 
proposition  in  question  it  may  be  further  urged  that  if  partners 
agree  not  to  be  liable  beyond  a  certain  amount,  and  a  stranger  has 
notice  of  that  agreement,  the  notice  avails  nothing  against  him. 
Such  an  agreement,  coupled  with  notice  of  it  on  the  part  of  a 

(6)  1   Camp.  403,  and   10   East  264,  Ab.  244,  and  5  Bro.  P.  C.  489 ;  Willis*, 

and  ante  p.  ^ITO.  Djson,  1  Stark.  164. 

(c)  Distinct  notice  to  the  same  effect        (cZ)  1  Camp.  404. 
existed  in  Minnit  v.  Whitney,  16  Vin.        (e)  Brown  v.  Leonard,  2  Chitty  120. 

279 


175^ 


DOCTRINES    OF    AGENCY. 


[book  ir., 


=176] 


person  dealing  with  tlic  firm,  is  by  no  means  equivalent  to  a  con- 
tract between  him  and  it  that  he  shall  not  hold  the  members  re- 
sponsible beyond  the  amount  which  they  may  have  agreed  between 
themselves  to  contribute  respectively.  (/) 

*  Contracts  on  the  basis  of  such  stipulations. — The  writer 
is  not  acquainted  with  any  case  in  which  it  has  been 
decided  that  persons  who  are  aware  of  the  terms  upon  which  part- 
ners have  agreed  together  to  carry  on  business  are  deemed  to  con- 
tract with  them  upon  the  basis  of  the  agreement  come  to  amongst 
the  partners  themselves.  In  all  cases  of  this  description  the  real 
question  to  be  determined  seems  to  be  whether  there  was  distinct 
notice  that  the  firm  would  not  be  answerable  to  strangers  for  acts 
which,  without  such  notice,  would  clearly  impose  liability  upon  it, 
and  whenever  there  is  any  doubt  upon. this  point  the  firm  ought 
clearly  to  be  liable,  the  onus  being  on  it  to  show  sufficient  reason 
why  liability  should  not  attach  to  it.  (g)  55 


(/)  See  Greenwood's  Case,  3  De  G., 
M.  &  G.  476. 

{g)  See  Hawken  v.  Bourne,  8  Mees. 
&  W.  703,  wliere  the  defendant  was  held 
liable  for  goods  supplied  to  a  mine, 
though  the  prospectus  of  the  mining 
company  stated  that  all  goods  were  to 
be  bought  for  cash  prices,  and  no  debt 
was  to  be  incurred. 

55.  Private  stipulations  and  notice 
of  them. — Partners  are  liable  for  all 
debts  contracted  by  eitiier  of  the  part- 
ners, in  respect  to  their  business,  not- 
withstanding an  agreement  between 
them  that  they  should  not  be  so  bound. 
Sauffey  v.  Howard,  7  Dana  (Ky.)  367. 

Conditions  in  articles  of  partnership 
restricting  the  authority  of  the  partners, 
that  are  not  known  to  third  parties,  can- 
not aS'ect  them,  and  the  nature  of  the 
copartnership  is  to  be  determined  by 
what  it  assumes  to  the  public  to  be,  and 
by  its  mode  of  doing  business.  National 
Exchange  Bank  v.  White,  30  Fed.  Rep. 
412.  Therefore,  evidence  of  such  restric- 
tions is   irrelevant.      Maltby  v.   North- 


western, &c.,  R.  R.  Co.,  16  Md.  422; 
Cargill  V.  Corby,  15  Mo.  425 ;  Perry  v. 
Randolph,  14  Miss.  335;  Nichols  v. 
Cheairs,  4  Sneed  (Tenn.)  229;  Tillier  v. 
Whitehead,  1  Dall.  (U.  S.)  269;  Devin 
V.  Harris,  3  Iowa  186 ;  Barber  v.  Mann, 
5  Bus-h  (Ky.)  672 ;  Lawrence  v.  Kinsting, 
1  Mont.  T.  290 ;  Everett  v.  Chapman,  6 
Conn.  347  ;  Laler  v.  Jordan,  44  Miss. 
283;  Sylverstein  v.  Atkinson,  45  Id.  81 ; 
National  Union  Bank  v.  London,  66 
Barb.  (N.  Y.)  189. 

Thus,  a  client  who  employs  an  attor- 
ney, employs  the  firm  of  which  he  is  a 
member,  and  is  not  chargeable  with 
knowledge  of  a  private  understanding 
as  to  compensation  existing  between  the 
members  of  the  firm.  If  the  client  pays 
one  member,  he  pays  all.  Williams  v. 
More,  63  Cal.  50.  So,  also,  where  one 
partner  endorses  a  bill  payable  to  the 
firm,  to  an  innocent  purchaser  for  value, 
the  firm  is  bound,  notwithstanding  they 
had  agreed  that  no  member  should  en- 
dorse paper  to  make  the  others  liable. 
Barrett  v.  Russell,  45  Vt.  43. 


280 


€HAP.  I,,  §  v.]  UXAUTHORIZED   ACTS.  176* 

SECTION   V. OF   THE    LIABILITY   OF    PARTNERS    IN    RESPECT    OF 

CONTRACTS    NOT    ENTERED    INTO   ON    BEHALF    OP    THE    FIRM! 
OR   NOT   SO   IN    PROPER    FORM. 

Observations  on  foregoing  propositions. — The  general  proposition 
that  a  partnership  is  bound  by  those  acts  of  its  agents  which  are 
within  the  scope  of  their  authority,  in  the  sense  explained  in  the 
foregoing  pages,  must  be  taken  with  the  qualification  that  the  agent, 
whose  acts  are  sought  to  be  imputed  to  the  firm,  was  acting  in  his 
character  of  agent,  and  not  as  a  principal.  If  he  did  not  act  in  his 
character  of  agent,  if  he  acted  as  a  private  individual  on  his  own 
account,  his  acts  cannot  be  imputed  to  the  firm,  and  he  alone  is 
liable  for  them,  even  though  the  firm  may  have  benefited  by  them. 
Whether  a  contract  is  entered  into  by  an  agent  as  such,  or  by  him 
as  a  principal,  is  often,  but  not  always,  apparent  from  the  form  of 
the  contract. 

With  reference  to  the  forms  of  contracts,  it  will  be  convenient  to 
consider — 

1.  Contracts  under  seal. 

2.  Ordinary  contracts  not  under  seal. 

3.  Bills  of  exchange  and  promissory  notes. 

*1.   Contracts  under  seal. — A  distinction  is  taken  between  r-^^  „„ 
deeds*  and  other  instruments  with  respect  to  the  person 
bound  by  them.     If  a  deed  is  executed  by  an  agent  in  his  own 
name,  he,  and  he  only,  can  sue  or  be  sued  thereon,  although  the 

Mr.  Watson,  in  his  Treatise  on  Part-  are  about  to  contract  that  he  will  not  in 

nership  (c.  4,  p.  194,  2d  ed.),  says  :  "We  any  manner   be  concerned    in  it,   they 

have  seen,  in v.  Layfield  (1  Salk.  could  not  have  recourse  upon  him,  as 

292),  Lord  Holt  held  that  the  act  of  one  proof  of   this   notice   would   rebut   his 

partner  should  be  presumed  the  act  of  prima  facie  liability.     The  partnership, 

the  others,  and  should  bind  them,  unless  in  that  case,  might  either  be  considered 

they  could  show  a  disclaimer.     Audit  as  dissolved,  or,  g-Moac^Aoc,  as  suspended." 

would  seem  that  even  during  the  sub-  See,  also,  as  to  when  notice  of  such  stipu- 

sistence  of  the  partnership,  and  in  the  lations  will  exclude  the  inference  of  au- 

established  course  of  trade,  one  partner  thority  in  one  partner  to  bind  the  others, 

may,  to  a  certain  degree,  limit  his  re-  McCrary  v.  Slaughter,  58  Ala.  230  ;  Rad- 

sponsibility.     If  there  beany  particular  cliffe  v.  Varner,  55  Ga.  427;  Pollock  v, 

speculation  or  bargain  proposed,  which  Williams,  42  Miss.  88  ;  Dreyer  r.  Sander, 

he  disapproves  of,  by  giving  distinct  no-  48  Mo.  400. 
tice  to  those  with  whom  his  copartners 

281 


177 


DOCTRINES   OF    AGENCY. 


[book   II., 


deed  may  disclose  the  fact  that  he  is  acting  for  another.  (A)  Tliere- 
fore,  where  a  partner  covenants  that  anything  shall  be  done,  he,  and 
he  only,  is  liable  on  the  covenant,  and  the  firm  is  not  bound  thereby 
to  the  covenantee,  (i)  A  person  who  has  to  execute  a  deed  as  an 
agent  should  take  care  that  the  deed,  and  the  covenants  in  it,  are 
expressed  to  be  made,  not  by  him,  but  by  the  person  intended  to  be 
bound.  Thus,  if  A  is  the  principal,  and  B  his  agent,  the  deed  and 
covenants  should  not  be  expressed  to  be  made  by  B  for  A,  but  by 
A;  and  the  execution,  in  like  manner,  should  be  expressed  to  be 
made  by  A  by  his  agent  B.  (k)  56 


{h)  Appleton  v.  Binks,  5  East  148; 
Pickering's  Case,  6  Ch.  525 ;  and  see 
next  note. 

(i)  Hancock  v.  Hodgson,  4  Bing.  269  ; 
Hall  V.  Bainbridge,  1  Man.  &  G.  42. 

(k)  Combe's  Case,  9  Co.  76  6;  Wilks 
V.  Back,  2  East  141. 

56.  Contracts  under  seal  gener- 
ally.— This  subject  has  been  already 
discussed  {supra,  p.  *136,  note  20),  but 
a  few  cases  of  interest  remain  to  be  ex- 
amined. Where  the  signature  of  a  firm 
name  to  an  instrument  shows  that  it  was 
intended  to  be  the  act  of  all  the  part- 
ners, efiect  must  be  given  to  it  accord- 
ingly, although  only  one  of  them  is 
named  in  the  body  of  the  instrument. 
George  v.  Tate,  102  U.  S.  564.  S.  P., 
Berk.  Woolen  Co.  v.  Julliard,  75  N.  Y. 
535. 

Seal  unnecessarily  used. — The  rule 
that  one  partner  cannot  bind  another,  or 
the  firm,  by  a  sealed  instrument,  is  sub- 
ject to  the  exception,  as  we  have  seen 
{supra,  p.  *138,  note),  that  if  the  con- 
tract made  by  him  would  have  been 
good  without  using  the  seal,  the  affixing 
a  seal  will  not  render  it  invalid.  Tapley 
V.  Butterneld,  1  Mete.  (Ky.)  515;  Pur- 
viance  v.  Sutherland,  2  Ohio  St.  478 ; 
Human  v.  Cuniffe,  32  Mo.  316 ;  McCul- 
lough  V.  Sommerville,  8  Leigh  (Va.) 
415. 


Thus,  where  a  writing  under  seal  is 
executed  by  one  partner  in  the  name  of 
the  firm,  such  writing  is  admissible  in 
an  action  of  assumpsit,  to  prove  a  promise 
by  the  firm,  if  made  on  sufficient  consid- 
eration.    Fagely  v.  Bellas,  17  Pa.  St.  67. 

Bonds. — If  one  partner,  for  the  benefit 
of  the  partnership,  executes  a  bond, 
with  surety,  which  the  surety  is  com- 
pelled to  pay,  he  does  not  thereby 
acquire  a  right  of  action  against  the 
other  partners.  Tom  v.  Goodrich,  2 
Johns.  (N.Y.)  213. 

In  an  action  by  a  surviving  partner  on 
an  obligatory  writing  given  to  a  firm,  the 
plea  was  that  the  bond  was  not  given  to 
the  firm,  but  to  the  deceased  partner  in  the 
firm's  name.  At  the  trial  the  court  in- 
structed the  jury  that  if  they  believed 
"  from  the  testimony  that  the  bond  in  evi- 
dence was  given  for  a  debt  contracted  prior 
to  the  dissolution  of  the  partnership,  the 
name  of  the  partnership  could  be  used 
after  the  dissolution,  and  the  suit  main- 
tained by  the  surviving  partner."  Held, 
that  this  instruction  was  unexceptiona- 
ble.    Still  well  V.  Gray,  17  Ark.  473. 

Where  one  partner  hired  slaves  in  his 
individual  name,  but  in  fact  for  the  use 
of  the  firm  which  had  the  benefit  of  their 
labor,  and  he  gave  his  individual  bond 
with  surety  for  the  hire,  on  which  judg- 
ment was  subsequently  recovered,  and 


28? 


CHAP.  I.,  §  Y.']                  UXAUTHORIZED    ACTS.  177* 

2.  Ordinary  contracts  not  under  seal. — When  a  person  enters 
into  a  contract  as  the  agent  of  another,  the  name  of  that  other  may 
be  either  disclosed  or  not.     If  it  is  disclosed,  the  contract  is  treated 

paid  by  the  surety,  who  then  filed  his  Mortgages.— The  exenition  of  a  mort- 
bill  against  his  principal  and  his  copart-  gage  of  personal  property  of  a  partner- 
ners,  on  which  it  appeared  that  the  prin-  ship  by  one  partner  in  his  individual 
cipal  in  the  bond  was  a  non-resident  of  name  passes  no  title.  Clark  v.  Hough- 
the  state,  and  insolvent,  it  was  held  that  ton,  12  Gray  (Mass.)  38. 
the  surety  was  entitled  to  a  decree  against  A  sealed  mortgage  executed  by  one 
his  copartners  for  the  amount  paid  by  partner  not  in  the  firm  name,  after  dis- 
him.  Weaver  v.  Tapscott,  9  Leigh  (Va.)  solution  by  the  withdrawal  of  a  partner 
424.  and  the  appointment  of  a  receiver. 
Where  money  was  lent  to  a  firm,  and  creates  no  lien  on  the  firm  property, 
the  partner  who  conducted  the  transac-  Husted  v.  Ingraham,  75  N.  Y.  251. 
tion,  by  mistake,  executed  a  penal  bond  Where  a  partner  buys  real  estate  in 
for  the  sum,  in  the  name  of  the  firm,  in-  his  own  name,  and  gives  his  individual 
stead  of  giving  a  promissory  note  there-  bond  and  mortgage  in  part  payment 
for — Held,  that  though  at  law  the  cred-  therefor,  the  firm  is  not  liable  to  the 
itor  had  no  remedy  on  the  bond,  except  seller  for  the  unpaid  purchase  money, 
against  the  partner  who  executed  it,  yet  thougli  it  appear  by  the  firm  books  that 
equity  would  correct  the  mistake,  and  the  land  was  bought  on  firm  account, 
hold  all  the  partners  bound  for  the  debt,  and  a  declaration  of  trust  was  afterwards 
Gait  V.  Calland,  7  Leigh  (Va.)  594.  executed  by  the  purchaser,  but  not  re- 
Leases. — Two  partners  took  an  as-  corded,  declaring  that  the  money  paid 
signment  of  a  lease  of  certain  rooms,  was  partnership  funds,  and  that  the  land 
and  afterwards  one  of  them.  A,  by  an  was  held  by  him  in  trust  as  partnership 
agreement  under  seal,  without  the  knowl-  property.  North  Pennsylvania  Coal 
edge  of  the  other,  sublet  a  part  of  the  Co.'s  Appeal,  45  Pa.  St.  181. 
room  and  granted  other  privileges  to  the  Releases. — The  law  firm  of  T.  &  A. 
plaintiff  for  a  term  of  three  months  be-  rendered  services  for  S.,  and  A.  charged 
yond  the  termination  of  the  lease.  Sub-  them  on  the  books  of  the  firm.  T. 
sequently  the  other  partner  sold  his  in-  made  a  several  claim  for  the  same  ser- 
terest  to  B.  A  and  B  received  rent  from  vices,  after  the  death  of  S.,  against  his 
the  plaintiff.  At  the  termination  of  the  estate,  which  was  allowed  and  paid,  T. 
first  lease,  the  plaintiflf  was  dispossessed,  executing  a  release  under  seal  in  the 
and  brought  an  action  of  assumpsit  name  of  T.  &  A.  Held,  that  the  release 
against  A  and  B  for  the  damage  he  had  was  binding  on  the  firm,  as  no  collusion 
sustained.  Held,  that  the  agreement  between  T.  and  the  administrator  of  S. 
under  seal  was  not  evidence  in  the  ac-  was  shown,  although  the  release  was 
tion ;  that  from  the  receipt  of  rent  by  A  made  long  after  the  dissolution  of  the 
and  B  no  contract  could  be  implied  firm  of  T.  &  A.,  and  T.  was  in  embar- 
against  B,  the  incoming  partner ;  and  rassed  circumstances,  and  had  no  attach- 
that  none  such  was  to  be  implied  from  able  property.  Thrall  v.  Seward,  37 
the  partnership.  Bewley  v.  Tams,  17  Vt.  573. 
Pa.  St.  485.  Sealed  bills  and  notes. — Where  the 

283 


177 


DOCTRIXES   OF   AGENCY. 


[book  II., 


as  that  of  the  principal,  and  not  as  that  of  the  agent ;  (l)  whilst  if  it 
is  not  disclosed,  the  contract  is  considered  as  that  of  the  agent. 
But  in  this  last  case  the  person  dealing  with  the  agent  can,  when 
he  discovers  the  undisclosed  principal,  hold  him  liable  instead  of 
the  agent,  (m) 

"^Firm  liable  though  not  named.  Written  contracts. — If, 
therefore,  one  partner  only  enters  into  a  written  contract, 
the  question  whether  the  contract  is  confined  to  him  or  whether  it 
extends  to  him  and  his  copartners,  cannot  be  determined  simply  by 
the  terras  of  the  contract.  For,  sujjposing  a  contract  to  be  entered 
into  by  one  partner  in  his  own  name  only,  still,  if  in  fact  he  was 
acting  as  the  agent  of  the  firm,  his  copartners  will  be  in  the  posi- 
tion of  undisclosed  principals,  and  they  may  therefore  be  liable  to 


178] 


instrument  upon  which  the  action  is 
brought  against  a  partnership  is  of  such 
a  character  as  to  require  that  it  shall  be 
executed  under  seal,  e.  g.,  a  single  bill, 
the  signing  of  the  partnership  name 
with  a  seal  attached  by  one  partner  will 
not  bind  his  copartner,  without  proof  of 
previous  authority  or  subsequent  ratifi- 
cation. There  is  no  legal  presumption 
that  the  execution  of  a  note  under  seal 
by  one  copartner,  even  though  he  may 
have  the  entire  management  of  the  busi- 
ness, is  the  act  of  the  partnership ;  the 
rule  is  rather  the  other  way.  The  non- 
liability of  one  member  of  a  firm  on 
single  bills  executed  without  authority 
in  the  firm's  name  by  his  copartner  is 
not  affected  by  his  subsequent  acknowl- 
■edgment  of  his  liability  on  the  open 
account  to  secure  which  the  bills  were 
given.  Sibley  v.  Young  (S.  C),  2  S.  E. 
Eep.  314.  See,  also,  Fant  v.  West,  10 
Rich.  (S.  C.)  149;  Harris  v.  Miller,  1 
Meigs  (Tenn..)  158. 

So,  if  one  partner  borrows  money  on 
his  own  credit,  and  gives  his  sealed  note 
for  the  amount,  the  firm  is  not  liable, 
though  the  money  be  used  in  the  part- 
nership transactions.     Willis  v.  Hill,  2 


Dev.  &  B.  (N.  C.)  L.  231.  But  such  a 
note  may  be  given  in  evidence  in  an 
action  of  assumpsit  against  the  firm, 
founded  on  the  contract  out  of  which  the 
note  arose  (Walsh  v.  Lennon,  98  111.  27  ; 
S.  C,  38  Am.  Rep.  75 ;  Doniphan  v. 
Gill,  1  B.  Mon.  (Ky.)  199) ;  but  not,  it 
seems,  to  establish  an  "account  stated" 
in  a  suit  brought  against  the  partner  who 
did  not  sign  it.  Heath  v.  Gregory,  1 
Jones  (N.  C.)  L.  417. 

(/)  Fairlie  v.  Fenton,  L.  R,  5  Ex.  169 ; 
Ex  parte  Hartop,  12  Ves.  352;  Russell 
V.  Reece,  2  Car.  &  K.  669.  But  even  in 
this  case  the  contract  may  be  so  worded 
as  to  bind  the  agent.  See  Paice  v. 
Walker,  L.  R.,  5  Ex.  173;  Calder  v. 
Dobell,  L.  R.,  6  C.  P.  486. 

(m)  See  Paterson  v.  Gandasequi,  15 
East  62 ;  Thompson  v.  Davenport,  9  Barn. 
&  C.  78 ;  and  the  note  to  those  cases  in 
2  Sm.  Lead.  Cas.  If  a  man  contracts  for 
"  my  principal ;"  the  principal,  although 
undisclosed,  and  not  the  agent,  is  liable ; 
unless  there  is  some  special  custom 
rendering  the  agent  personally  liable. 
But  if  there  be  such  a  custom  the  agent 
will  be  liable.  See  Fleet  v.  Murton,  L. 
R.,  7  Q.  B.  126. 


284 


CHAP.  I.,  §  v.]  UNAUTHORIZED    ACTS.  178* 

be  sued  on  the  contract,  although  no  allusion  is  made  to  them  in  it. 
This  was  expressly  decided  in  the  well-known  case  of  Beckham  v. 
Drake,  {n)  There,  Drake,  Knight  and  Sturgey  were  in  partner- 
ship as  type-founders,  but  Drake  was  a  secret  partner.  A  written 
agreement  relative  to  the  partnership  business  was  entered  into 
between  the  plaintiiF  and  Knight  and  Sturgey,  and  for  a  breach  of 
this  agreement  by  them  the  action  was  brought.  Drake's  name 
did  not  appear  in  the  agreement;  he  did  not  sign  it;  nor,  when  the 
contract  was  made,  was  he  known  to  the  plaintiiF  to  be  a  partner. 
It  was  nevertheless  held  that  all  three  partners  were  liable  jointly 
for  a  breach  of  the  agreement,  inasmuch  as  the  agreement  itself  was 
clearly  entered  into  by  the  firm,  and  Drake,  like  any  other  undis- 
covered principal,  was  liable  to  be  sued  as  soon  as  his  position  was 
discovered. 

Parol  contracts. — In  conformity  with  the  same  principle,  if  one 
pai'tner,  acting  in  fact  for  the  firm,  orders  goods  and  they  are  sup- 
plied to  him,  the  firm  will  be  liable  to  pay  for  them,  although  no 
mention  was  made  of  his  copartners,  (o)  and  they  are  unknown  to 
the  seller  of  the  goods.  (/>)  So,  if  A,  in  his  own  name  only,  under- 
writes a  policy  of  insurance,  but  the  profit  or  loss  arising  from  the 
transaction  is  to  be  divided  between  him  and  B,  both  A  and  B  will 
be  liable  to  the  insured,  {q)  57 

(n)  9  Mees.  &  W.  79,  and  11  Mees.  &  8  Neb.  186  ;  Brown  v.  Fitch,  4  Vr.  (N.  J.) 

W.  315,  overruling  Beckham  v.  Knight,  418 ;  Tucker  v.  Peaslee,  36  N.  H.  167 ; 

4  Bing.  N.  C.  243.  Eeynolds  v.  Cleveland,  4  Cow.  (N.  Y.) 

(o)  City  of  Lond.  Gas  Light  and  Coke  282;  Baxter  v.  Clark,  4  Ired.  (N.  C.)  L. 

Co.  V.  Nicholls,  2  Car.  &  P.  365 ;  Whit-  127  ;  Poole  v.  Lewis,  75  N.  C.  417 ;  Given 

well  V.  Perrin,  3  C.  B.  (N.  S.)  412.  v.  Albert,  5  Watts  &  S.  (Pa.)  333 ;  Miff- 

(p)  Ruppell  V.  Roberts,  4  'Ne^.  &  M.  lin  v.  Smith,  17  Serg.  &  R.  (Pa.)  165; 

31 ;  Robinson  v.  Wilkinson,  3  Price  538  ;  Burnley  v.  Rice,  18  Tex.  481  ;  Griffith  v. 

Bottomley  v.  Nuttall,  5  C.  B.  (N.  S.)  122.  Buffum,  22  Vt.  181 ;  Hills  v.  Bailey,  27 

iq)  Brett  v.  Beckwith,  3  Jur.  (N.  S.)  Vt.  548. 

31,  M.  R.  And     the     converse     proposition    is 

57.    Ordinary    simple     contracts—  equally  true,  i.  e.,  the  firm  may  enforce 

firm  liable  though  not  named. — The  a  contract  made  for  its  benefit  with  only 

following  cases  fully  bear  out  the  text:  one   of  its   members  in  his  individual 

Everett  v.  Chapman,  6  Conn.  347  ;  Bisel  name.     Illinois,  &c.,  R.  E.  Co.  v.  Owens, 

V.  Hobbs,  6  Blackf.  (Ind.)  479;  Roth  v.  53  111.  391  ;  Havana,  &c.,  R.  R.  Co.  v. 

Moore,  19  La.  Ann.  86  ;  Baring  v.  Crafts,  Walsh,  85  111.  58 ;  Snell  v.  Atlantic,  &c., 

9  Mete.  (Mass.)  380 ;  Norton  v.  Thatcher,  Co.,  18  Am.  L.  Reg.  (N.  S.)  79. 

285 


178*  DOCTRINES    OF    AGENCY.  [bOOK    II., 

LiahUily  of  dormant  paHiierH. — These  cases  establish  the  im- 
portant proposition  that  dormant  [)artners  are  liable  for  the  debts 
of  the  firm,  not\vith*standing  their  connection  with  the 
firm  was  unknown  to  its  creditors  when   the  debts  were  ^ 
contracted.  ^8 

One  partner  only  liable,  he  only  being  dealt  with. — On  the  other 
hand,  if  one  partner  only  is  dealt  with,  and  the  circumstances  are 
such  as  to  show  that  he  was  acting  and  was  deait  with  on  his  own 
account,  i.  e.,  as  a  principal,  and  not  as  the  agent  of  the  firm,  he 
alone  is  responsible,  (r) 

Thus,  where  persons  work  a  coach  in  partnership,  each  having 
his  own  horses,  and  one  of  them  orders  fodder  on  his  own  account, 
he  alone  is  liable  for  it.  (s)  So,  in  the  ordinary  case  of  an  agreement 
between  an  author  and  a  publisher,  to  the  effect  that  the  publisher 
shall  pay  for  tiie  paper,  printing  and  other  expenses  of  publication, 
and  that  after  reimbursing  himself  and  deducting  a  commission, 
the  profits  shall  be  divided  equally,  the  author  is  not  liable  for  the 

Thus,  in  an  action  brought  by  a  tan-  acting  partners  bought  land  in  their 
nery  firm  for  false  warranty  of  a  mule  own  name  for  the  purpose  of  obtaining 
bought  by  one  member  thereof,  without  from  it  wood  to  be  used  in  the  manufac- 
mention  that  it  was  for  the  firm,  it  was  ture  of  irou,  and  so  far  as  it  was  paid  for, 
held  that  the  burden  of  proof  was  on  the  it  was  paid  for  out  of  the  partnership 
defendant  to  sustain  his  motion  for  a  effects.  The  land  is  partnership  prop- 
nonsuit,  although  there  was  no  showing  erty,  and  the  partnership  having  failed, 
that  the  mule  had  ever  been  used  in  the  the  two  dormant  partners  are  liable  to 
tannery.  Little  v.  Hamilton,  Pliil.  (N.  the  vendor  for  the  balance  of  the  pur- 
C.)  L.  29.  chase  money.     Brooke  v.  Washington,  8 

A  orders  goods  of  B  by  letter;  the  co-  Gratt.  (Va.)  248. 

partnership  of  which  B  was  a  member  See,  however,  contra,  as  to  the  liability 

forwarded  the  goods  to  A,  without  a  bill  of  dormant   partners   in    land.  Gray  v. 

or  letter,  who  received  them,  supposing  Palmer,  9  Cal.  616. 

them  to  have  been  forwarded  by  B  in-  ()•)  ^ee,  in  addition  to  the  cases  cited 

dividually.    Held,  that  the  copartnership  below.  Ex  parte  Eyre,  1  Ph.  227. 

might  maintain  an  action,  for  goods  sold  (s)  Barton  v.   Hanson,    2  Taunt.  49. 

and  delivered,  against  A.     Child  u.  Wof-  Mr.  CoUyer  treats  this  as  an  exception 

ford,  3  Ala.  564.  depending    on    particular    custom,    but 

58.  Liability  of  dormant  partner. —  this  view  is   not   correct.     The  law  is 

A  partnership  for   the  manufacture  of  the  same   in  Scotland  ;   see  Jardine  v. 

iron  was  composed  of  four  persons,  the  M'Farlane,  3  Koss  Lead.  Cas.  on  Com. 

names  of  two  of  whom  did  not  appear,  Law  575. 
and  these  lived  at  a  distance.     The  two 

286 


<:!HAP.  I.,  §  v.]  FORM   OF   CONTRACT.  179* 

paper  or  printing  which  may  have  been  supplied  and  executed  for 
the  publisher,  [t)  59 

Foi'm  of  written  contracts. — With  respect  to  contracts  in  writing 
it  is  to  be  observed  that  a  contract  or  other  instrument  required  by- 
statute  to  be  in  writing  and  signed  by  the  party  to  be  charged,  only 
binds  those  partners  who  actually  sign  it ;  (u)  but  if  signature  by 
the  party  to  be  charged,  or  his  agent,  is  sufficient,  the  signature  of 

(<)  See  the  Scotch  case  of  Venables  v.  thereon,  for  it  may  be  shown  by  parol 

Wood,  3  Ross  Lead.  Cas.  on  Com.  Law  on  whose  account,  the  articles  charged 

529;  Wilson  ?;.  Whitehead,  10  Mees.  &  were   delivered,   and  the   parties  were 

W.  503;  but,  see  Gardiner  v.  Childs,  8  competent  witnesses  for  themselves  or 

Car.  &  P.  345,  where  the  paper  was  sup-  each   other    to   that   point.      Burton  v. 

plied  for  the  specific  book.  Ferris,  Brayt.  (Vt.)  78. 

59.  One  partner  only  liable,  he  only  Where  one  copartner  makes  a  sale  or 
being  dealt  with. — Although  a  part-  disposition  of  the  partnership  property 
nership  exists,  yet  one  of  the  partners  in  his  own  name,  and  without  disclosing 
may  contract  and  bind  himself  in  his  in-  the  name  of  his  copartner  or  copartners 
dividual  capacity,  and  the  partnership  having  an  interest  therein,  at  the  same 
cannot  be  charged  with  it.  McDonald  time  warranting  the  soundness  thereof, 
V,  Parker,  Sneed  (Ky.)  245.  When  no  also  in  his  own  name,  suit  may  be  main- 
credit  is  given  and  there  is  no  expecta-  tained  against  him  for  a  breach  of  this 
tion,  originally,  of  looking  to  one  part-  warranty  without  joining  his  copartner 
ner  for  debts  incurred  by  the  other,  no  in  the  action.  Cookingham  v.  Lasher, 
recovery  against  the  former  can  be  had.  38  Barb.  (N.  Y.)  656  ;  Clark  v.  Holmes, 
Chapman  v.  Devereux,  32  Vt.  616 ;  3  Johns.  (N.  Y.)  148. 
Floyd  V.  Wallace,  31  Ga.  668.  And  the  The  plaintiff  was  employed  by  the 
mere  fact  that  money  loaned  to  one  part-  defendant  on  his  credit  alone,  to  open 
ner  on  his  individual  contract  is  applied  and  develop  a  coal  mine  on  lands  owned 
to  the  payment  of  partnership  debts  by  the  defendant,  with  others.  It  not 
does  not  constitute  the  lender  a  creditor  appearing  that  the  other  proprietors  re- 
of  the  firm.  National  Bank  v.  Thomas,  quested  the  defendant  to  engage  in  this 
47  N.  Y.  15.  It  must  further  appear  enterprise,  or  authorized  him  to  employ 
that  the  money  was  so  used  with  the  the  plaintiff  to  perform  tliis  service,  it 
knowledge  and  approbation  of  the  firm,  was  held  that  the  mere  fact  that  they 
or  that  the  debt  was  subsequently  as-  were  cotenants  with  the  defendant  in 
sumed  by  the  firm.  Nichols  v.  English,  the  land  was  not  enough  to  warrant  the 
3  Brewst.  (Pa.)  260 ;  Smith  d.  Hoffman,  presumption  that  they  were  partners 
2  Cranch  (U.  S.)  C.  C.  651.  But  see  with  him  in  his  scheme  to  develop  a 
Snead  v.  Barringer,  1  Stew.  (Ala.)  coal  mine  upon  it.  Stannard  v.  Smith, 
134.  40  Vt.  513. 

Defendant's  being  a  partner  in  a  firm  (w)  Swift  v.  Jewsbury,  L.  R.,  9  Q.  B. 

charged  in  book  account  is  not,  of  itself,  301,  reversing  Swift  v.  Winterbotham,  8 

•  conclusive  of  his  liability  in  an  action  Q.  B.  244. 

287 


179*  DOCTRINES   OF    AGENCY.  [bOOK   II., 

one  partner  in  the  name  or  on  behalf  of  the  firm  will  bind  all  the 
j)artners.  (y) 

It  is  often  a  matter  of  difficulty  to  determine  whether  a  particu- 
lar contract  is  entered  into  by  the  firm  through  one  of  the  partners 
or  by  that  one  partner  only.  There  is  nothing  to  prevent  one  per- 
son from  entering  into  a  contract  as  a  principal,  and  yet  for  and  on 
behalf  of  another,  (x)  and  when  A  enters  *into  a  contract 
-'  for  B,  it  may  not  be  easy  to  say  Mdiether  it  is  B  who  con- 
tracts or  whether  it  is  A  for  B's  benefit.  And  yet  the  true  answer 
to  this  question  determines  whether  B  is  or  is  not  liable  on  the  con- 
tract. The  cases  on  this  subject  relate  principally  to  bills  of  ex- 
change and  promissory  notes,  to  which  it  is  now  proposed  to  pass.  60 

3.  Bills  of  exchange  and  promissory  notes. — Although  an  ordi- 
nary contract  not  under  seal,  entered  into  by  an  agent  for  an  undis- 
closed principal,  is  binding  on  that  principal  when  discovered,  and 
he  can  be  sued  upon  it,  the  same  rule  does  not  apply  to  bills  of 
exchange  and  promissory  notes.  For,  subject  to  the  qualification 
that  the  name  of  a  firm  is  equivalent  to  the  name  of  all  the  persons 
liable  as  partners  in  it,  iy)  no  person  whose  name  is  not  on  a  bill  or 
note  is  liable  to  be  sued  upon  it.  (z)  In  order,  therefore,  that  a  bill 
or  note  may  be  binding  on  a  firm,  the  name  of  the  firm,  or  the 
names  of  all  its  members,  must  be  upon  it ;  and  if  the  names  of  one 
or  more  of  the  partners  only  are  upon  it,  the  others  will  not  be 
liable  to  be  sued  upon  the  instrument,  whatever  may  be  their  liability 
as  regards  the  consideration  for  which  it  may  have  been  given,  (a) 

{v)  See  Duncan  v.  Lowndes,  3  Camp.  60.  Execution  of  contract. — A  con- 
478.  In  Ex  parte  Harding,  12  Ch.  D.  tract  drawn  by  one  partner,  and  signed 
557,  a  letter  of  guarantee  was  so  framed  by  tbe  other  in  the  partnership  name,  is 
as  to  bind  the  firm  and  also  those  wlio  the  agreement  of  both  as  partners.  Wit- 
signed  it  separately,  ter  V.  M'Neil,  3  Scam.  (111.)  433.     See, 

{%)  See,  in  addition  to  the  cases  cited  also,  Marvin  v.  Buchanan,  62  Barb.  (N. 

hereafter,  Gadd  v.  Houghton,  1  Ex.  D.  Y.)  468. 

357  ;  Hough  v.  Manzanos,  4  Ex.  D.  104;  {y)  45  and  46  Vict.,  c.  61,  §  23  (2) ; 

Southwell  V.  Bowditch,  1  C.  P.  D.  374;  and  infra,  note  (6),  et  seq. 

Paice  V.  Walker,  L.  R.,  5  Ex.  173.    See,  (2)  Id.,  |  23 ;  and  Lloyd  v.  Ashby,  2 

also,.  Kay  v.  Johnson.  2  Hem.  &  M.  118,  Car.  &  P.  138  ;    Ducarry  v.  Gill,  4  Id. 

where  an  agreement  for  a  lease  entered  121 ;  Eastwood  v.  Bain,  3  Hurlst.  &  N. 

into  by  directors  was  enforced  against  738. 

them  individually.  (a)  Bottomley  v.  Nuttall,  5  C.  B.  (N. 

288 


CHAP.  I.,  §  v.]  FORM    OF   CONTRACT BILLS.  180* 

a.  Bills  in  name  of  firm. — First,  as  regards  bills  having  the  name 
of  the  firm  upon  them.  A  bill  drawn,  endorsed  or  accepted  in  the 
name  of  the  firm  is  considered  as  bearing  the  names  of  all  the  per- 
sons who  actually  or  ostensibly  compose  the  firm  at  the  time  its 
name  is  put  to  the  bill ;  and,  consequently,  all  those  persons,  in- 
♦cluding  as  well  dormant  as  quasi  partners,  may  be  sued  ^^^  ^ 
upon  the  bill.  (6) 

Thus,  where  A  employed  B  to  carry  on  his  business,  and  such 
business  was  carried  on  by  B  for  A  under  the  name  of  B  &  Co., 
a  bill  accepted  by  B  in  the  name  of  B  &  Co.,  for  the  purposes  of 
the  business,  was  held  to  be  the  acceptance  of  A ;  although  B  had 
positive  instructions  not  to  accept  bills,  and  the  holder  of  the  bill, 
who  was  an  endorsee  for  value,  knew  nothing  of  A  or  B  or  of  the 
business,  (c) 

Moreover,  if  two  partners,  A  and  B,  carry  on  business  in  the  name 
of  A,  a  bill  accepted  by  B  in  the  name  of  A,  for  the  purposes  of 
the  partnership,  will  bind  both  partners,  although  addressed  to  A 
at  a  place  where  he  carries  on  a  separate  business,  (d)  61 

Two  firms  with  one  name. — If  there  are  two  firms  with  one  name, 
a  person  who  is  member  of  both  firms  is  liable  to  be  sued  on  all 

S.)  122;  Miles'  Claim,  9  Ch.  635.     As  739,  and  2  Id.  147.    N.  B.— The  bill  was 

to  the  difference  between  an  acceptance  drawn  on  Reynolds  at  Woolwich,  not  at 

in  the  form   A  for  B,  and   B  per  proc.  Walworth,  as  stated  in  1  Fost.  &  F.  740. 

A,  see  O'Reilly  v.  Richardson,  17  Ir.  61.  Bills  in.  name  of  firm. — Where 
Com.  Law  Rep.  74.  Bills  may  be  made  two  firms  in  different  localities  enter 
payable  to  the  holder  of  an  oflSce  for  into  an  agreement,  in  express  terms, 
the  time  being.  45  and  46  Vict.,  c.  61,  §  creating  a  partnership  for  the  purpose 
7  (2).  of  carrying  on  the  legitimate  freighting 

(6)  45  and  46  Vict.,  c.  61,  ^  23  (2).  business,  and,  adopting  no   partnership 

See,    as   to   dormant  partners,  Swan   v.  name,  carry   on    the   business    in    each 

Steele,  7  East  210;  Wintle  i;.  Crowther,  1  locality    under    the   name   of   the   firm 

Cromp.  &  J.316;  and,  as  to  gfuasi  partners,  there  established,   a   bill   of  exchange, 

Gurney  v.  Evans,  3  Hurlst.  &  N.  122.  drawn  by  one  firm  upon  the  other,  the 

A  clerk  who  aflSixes  the  name  of  the  proceeds  of  which  are  applied    to  the 

firm  is  not  liable  on  the  bill.     Wilson  partnership  business,  will  bind  the  firm 

V.  Barthrop,  2  Mees.  &  W.  863.  against  which  it  is  drawn,  not  only  in 

(c)  Edmunds  v.  Bushell,  L.  R.,  1  Q.  an  action  for  money  lent,  but  also  as  a 

B.  97.  party  to  the   bill.     Wright  v.  Hooker, 
(rf)  Stephens  v.  Reynolds,  5  Hurlst.  &  10  N.  Y.  51. 

N.  513,  and  at  Nisi  Prius,  1  Fost.  &  F. 

289  19 


181*  DOCTEIXES    OF   AGENCY.  [bOOK    II., 

bills  bearing  that  name,  and  binding  on  either  firm.  But  if  a 
member  of  only  one  of  the  two  firms  is  sued  on  the  bill,  his  liability 
will  depend,  first,  on  the  authority  of  the  person  giving  the  bill  to 
use  the  name  of  the  firm  of  which  the  defendant  is  a  member ;  and, 
secondly,  on  whether  the  name  of  that  firm  has  in  fact  been  used. 
If  both  these  questions  are  answered  in  the  afiBrmative,  he  will  be 
liable,  but  not  otherwise. 

Thus,  in  Swan  v.  Steele,  (e)  there  were  two  firms  of  Wood  & 
Payne,  one  a  cotton  firm,  the  other  a  grocer's  firm.  The  defendant, 
Steele,  was  a  partner  in  the  cotton  firm  only.  A  bill  was  paid  to 
the  cotton  firm  for  a  debt  due  to  it,  and  was  made  payable  to  its 
order.  This  bill  was  endorsed  in  the  name  of  "  Wood  &  Payne," 
by  Steele's  copartners,  for  a  debt  owing  to  the  plaintiff  by  the 
grocer's  firm,  to  which  Steele  did  not  belong.  Steele  was  never- 
09-1  theless  held  liable  on  this  bill,  *the  plaintiff  being  a  bona 
-'  fide  holder  for  value,  without  notice  that  any  fraud  on 
Steele  was  being  committed.  In  this  case  the  bill  was  properly 
endorsed  "  Wood  &  Payne,"  and  the  only  question  was  who  con- 
stituted that  firm.  The  bill  could  only  have  been  endorsed  by  the 
cotton  firm.  Steele  was  a  member  of  it,  though  he  was  not  a 
member  of  the  firm  for  whose  debt  his  partners  paid  it  away. 
Lord  Ellenborough  held  Steele's  liability  to  be  too  clear  for  argu- 
ment ;  for  Steele  was  a  member  of  the  endorsing  firm,  and  his  co- 
partners in  that  firm  were  guilty  of  a  fraud  on  him,  of  which  the 
plaintiffs  had  no  notice.  62 

(e)  7  East  210.  &  Dana,  a  bill  of  sale  of  the  property, 

62.  Two  firms    with  one  name  or  in  which   he  acknowledged   receipt  of 

common   partner.— A   party  can  only  payment  by  note,  and  the  note  which  he 

be  bound  on  a  note  executed  in  a  firm  received  was,  by  Dana,  signed  "  Downer 

name,  who  is  actually  a  member  of  the  &  Dana,"  and  it  appeared  in  evidence 

firm   executing  the  same,  or  who  has  that  there  was  in  existence  at  that  time, 

held  himself  out  as  a  member,  so  as  to  doing  business,  such  a  firm  as  "  Downer 

give  the  firm  credit  on  his  responsibility,  &  Dana,"  consisting  of  those  two  indi- 

Sargent  v.  Collins,  3  Nev.  260.     S.  P.,  viduals,  it  was  held  that  the  plaintiflE" 

Cushing  V.  Smith,  43  Tex.  261 ;  Cobb  r.  could  not  recover  on  the  note  against 

Illinois  Central  R.  R.  Co.,  38  Iowa  601.  another  firm  of  different  style,  consisting 

Where  the  plaintiff  delivered  property  of  the  same  Downer  and  Dana  and  a 

to  W.  Downer  and  H.  Dana,  and  exe-  third  person,  notwithstanding  it  might 

cuted  to  them,  by  the  name  of  Downer  appear  that  the  latter  firm  was  also  then 

290 


CHAP.  I.,  §  v.]  FORM   OP   CONTRACT — BILLS.  182* 

Name  of  firm  same  as  that  of  individual — Again,  persons  may 
carry  on  business  in  partnership  in  the  name  of  one  of  themselves, 
and,  if  they  do,  they  expose  themselves  to  serious  liability.  Prima 
facie  his  acceptances  will  bind  them,  even  although  dishonestly 
given.  (/)  At  the  same  time,  if  they  can  show  that  he  gave  the 
bills  as  his  own,  and  not  as  the  bills  of  the  firm,  they  will  not  be 
liable,  even  to  a  bona  fide  holder  for  value.  This  was  decided  by 
the  Court  of  Appeal  in  The  Yorkshire  Banking  Company  v. 
Beatson,  (g)  in  which  the  law  on  this  subject  will  be  found  ex- 
haustively examined.  In  that  case  an  accommodation  acceptance 
given  by  one  partner  in  his  own  name  was  held  not  binding  on 
his  dormant  partner,  as  the  acceptance  was  not  intended  to  bind 
him,  and  was,  in  truth,  a  private  transaction,  and  was  not  entered 
in  the  books  of  the  firm.  The  fact  that  the  plaintiffs  took  the  bill 
as  the  bill  of  the  persons,  whoever  they  were,  who  might  be  asso- 
ciated with  the  partner  whose  name  was  on  the  bill,  was  held  imma- 
terial.   The  plaintiffs  never  knew  of,  or  gave  credit  to  any  one  else. 

If  A,  B  &  C  are  partners,  and  A  draws  a  bill  of  exchange  on  B, 
and  he  accepts  the  bill,  A,  B  &  C  cannot  be  sued  upon  it ;  and  this 
is  so  whether  A,  B  &  C  have  a  business  name  or  not ;  {h)  and  even 
although  the  bill  may  have  been  used  for  the  joint  benefit  of  the 
three  partners,  (i)  Even  if  it  is  agreed  that  the  business  of  the 
three  shall  be  carried  on  in  the  name  *of  one  of  them,  it  r^-ioq 
will  not  follow  that  all  bills  accepted  by  him  will  bind  all 
the  three  partners.     The  question  remains,  Whose  bill  is  it? 

This  was  decided  by  the  Court  of  Appeal  in  Chancery,  in  Miles' 
Claim,  {j)     There  four  firms,  F.  &  Co.,  M.  &  Co.,  M.  &  L.,  and 

doing  business  at  the  same  place,  there  v.  Downer,  19  Vt.  14. 

being  no  testimony  tending  even  to  prove  (/)  See  5  C.  P.  D.  123  and  124. 

that  the  latter  firm  had,  at  any  time,  (g)  5  C.  P.  D.  109,  aflSrming    S.  C, 

done  any  act  which  could  have  induced  4  Id.  204,  but  on  different  grounds.     N. 

the  plaintiff  to  believe  that  Downer  aiid  B. — The  court  set  aside  the  verdict  of 

Dana  had  ever  been  authorized  to  use  the    jury.     See,    also,    South    Carolina 

their  own  name  and  style  for  the  pur-  Bank  v.  Case,  8  Barn.  &  C.  427  ;  Ex  parte 

poses  of  the  other  firm  ;  and  that  upon  Law,  3  Deac.  541. 

this  testimony  it  was  improperly  left  to  (h)  See  Nicholson  v.  Ricketts,  2  El.  & 

the  jury  to  fiiid  whether  the  note  was  E.  497,  and  Miles'  Claim,  9  Ch.  635. 

-executed,  and  received  by  the  plaintiff  (i)  lb. 

as  the  note  of  the  latter  firm.     Miner  (j)  9  Ch.  635. 

291 


183*  DOCTRINES   OF    AGENCY.  [bOOK    II., 

A.  &  Co.,  engaged  in  a  joint  adventure,  and  agreed  to  carry  on 
business  under  the  name  of  F.  &  Co.,  and  to  divide  profits  and 
losses  in  equal  shares.  They  also  agreed  that  funds  for  the  adven- 
ture should  be  raised  by  the  drafts  of  any  one  of  the  four  firms  on 
the  others.  Bills  were  drawn  by  M.  &  Co.  on  A.  &  Co.,  on  M.  & 
L.  and  on  F.  &  Co.,  and  were  duly  accepted.  It  was  held  that 
none  of  these  bills  bound  all  four  firms  jointly.  As  regards  the 
bills  drawn  on  A.  &  Co.  and  on  M.  &  L.,  the  case  presented  no 
difficulty,  for  it  is  plain  that  these  bills  were  not  drawn  or  accepted 
in  the  name  in  which  the  joint  adventure  was  carried  on.  As  re- 
gards the  bills  accepted  by  F.  &  Co.,  which  was  the  name  under 
which  the  joint  adventure  was  carried  on,  there  was  an  ambiguity  • 
but  the  court  held  that  this  name,  used  as  it  was,  really  meant  the 
separate  firm  F.  &  Co.,  and  not  the  four  firms  engaged  in  the  ad- 
venture, and  that  there  was  no  sufficient  reason  for  holding  it  to 
mean  anything  else. 

Again,  in  Hall  v.  West,  (k)  three  brothers  of  the  name  of  Daw- 
son carried  on  in  partnership,  under  the  name  of  Dawson  &  Sons, 
the  business  of  millers,  farmers,  coal  and  corn  dealers  and  bone 
crushers.  The  defendant  was  a  dormant  partner  in  the  bone  crush- 
ing business  only.  Dawson  &  Sons  overdrew  their  account  with 
their  bankers,  who  knew  nothing  of  West  nor  of  his  connection 
with  the  bone  business.  Having,  however,  discovered  this,  they 
sued  him  for  the  amount  of  the  overdrawn  account.  He  was  held 
not  liable,  for  in  point  of  fact  the  balance  due  to  the  bankers  was 
not  in  respect  of  any  debt  contracted  by  Dawson  &  Sons  in  connec- 
tion with  the  bone  crushing  business ;  it  was  not,  therefore,  as  be- 
tween the  partners  themselves,  a  debt  of  the  firm  of  which  the 
^  defendant  *was  a  member,  and  there  was  no  apparent  as 

-'  distinguished  from  real  authority,  on  wdiich  the  bankers 
could  rely  as  against  West. 

In  the  same  case,  bills  were  drawn  by  West  on  and  accepted  by 
Dawson  &  Sons.  With  one  exception,  these  bills  were  drawn  for 
purposes  unconnected  with  the  bone  business.     On  the  facts  stated 

(k)  A  special  case  decided  in  the  Exchequer,  and  afterwards  in  the  Exchequer 
Chamber,  in  June,  1875.  The  above  note  of  the  case  is  taken  from  shorthand 
writer's  notes  of  the  judgments. 

292 


CHAP.  I. 


v.] 


FORM    OF    CONTRACT BILLS. 


184^ 


(but  which  it  is  unnecessary  here  to  detail)  the  court  held  that  all 
these  bills  had  in  fact  been  paid;  it  became  unnecessary,  therefore, 
to  consider  whether  West  could  have  been  sued  as  an  acceptor.  It 
was  contended,  on  the  authority  of  Baker  v.  Charlton,  {I)  that  he 
was  liable;  but  the  Court  of  Exchequer  (m)  dissented  from  that  case 
and  expressed  a  clear  opinion  that  West  could  not  have  been  liable 
as  an  acceptor  of  the  bills,  with  the  exception  of  the  one  which  had 
been  given  for  the  purposes  of  the  bone  business  in  which  he  was  a 
partner.  The  Court  of  Exchequer  Chamber  expressed  no  opinion 
on  this  point,  it  being  unnecessary  to  do  so.  63 


(/)  In  Baker  v.  Charlton,  Peake  (3d 
■ed.)  Ill,  two  firms  carried  on  business 
tinder  the  name  of  J.  King  &  Co.     The 
defendant  was  partner  in   one  of  them 
only,  but  his  copartners  were  members 
of  both  firms  ;  the  defendant  was  sued 
by  an  endorsee  on  a  bill  drawn  by  his 
copartners  in  the  name  of  "  J.  King  & 
Co.  ; "  the  defendant  resisted  the  action 
on    the   ground   that   the   bill  was  not 
drawn  by  the  firm  to  which  he  belonged, 
but  by  the  other ;  but  Lord  Kenyon  de- 
clared   the   defence    invalid.      Having 
traded  with  persons  under  the  style  of 
■"  J.  King,  &   Co.,"    the  defendant  was 
liable  on  bills  drawn  by  them  in  that 
name.    See,  also,  Davidson  v.  Robertson, 
3  Dow  218;  McNair  v.  Fleming,  1  Mont. 
Part.  37,  and  3  Dow  229.     But  Baker 
V.  Charlton  cannot  now  be  relied  on. 
(m)  /.  e.  Kelly,  C.  B.,  and  Amphlett,  B. 
63.  Name  of  firm  same  as  that  of 
individual. — Where    a    partnership    is 
carried  on  in  the  name  of  an  individual, 
and  a  suit  is  brought  against  the  part- 
ners on  a  note  or  other  obligation  signed 
by  such  individual,  the  legal  presump- 
tion is  .that  it  is  the  note  of  the  indi- 
vidual and  not  of  the  partners.      The 
plaintiff,  to  recover  against  the  partners, 
must  not  only  prove  the  execution  of 
the  note,  but  go  further,  and  prove  either 
that  the  money  for  which  the  note  was 


given  was  borrowed  on  the  credit  of  the 
partnership,  or  that,  when  obtained,  it 
was  used  in  the  business  of  the  partner- 
ship. Oliphant  v.  Mathews,  16  Barb. 
(N.  Y.)  608.  S.  P.,  Mercantile  Bank  v. 
Cox,  38  Me.  500 ;  Chemung  Bank  v.  In- 
graham,  58  Barb.  (N.  Y.)  290.  Es- 
pecially does  this  presumption  arise 
when  the  signer  of  the  paper  openly 
transacts  business  on  his  own  account. 
Manufacturers',  &c..  Bank  v.  Winship,  5 
Pick.  (Mass.)  11. 

In  United  States  Bank  v.  Binney  (5 
Mason  (U.  S.)  176,  183,  184),  the  court 
say :  "  In  respect  to  both  general  and 
limited  partnerships,  the  same  general 
principle  applies  that  each  partner  has 
authority  to  bind  the  firm  as  to  all 
things  within  the  scope  of  the  partner- 
ship, but  not  beyond  it.  Where  the 
contract  is  made  in  the  name  of  the 
firm,  it  will,  'prima  facie,  bind  the  firm, 
unless  it  is  ultra  the  business  of  the  firm. 
Where  the  firm  imports,  on  its  face,  a 
company,  as  A,  B  &  Co.,  or  A,  B  &  C, 
there  the  contracts  made  by  the  partners 
in  that  name  bind  the  firm,  unless  they 
are  known  to  be  beyond  the  scope  and 
business  of  the  firm.  But  where  the 
business  is  carried  on  in  the  name  of 
one  of  the  partners,  and  his  name  alone 
is  the  name  of  the  firm,  there,  in. order 
to  bind  the  firm,  it  is  necessary  not  only 


293 


184^ 


DOCTRINES  OF   AGENCY. 


[book  Il.y 


b.  Bills  not  in  name  of  firm. — Secondly,  as  regards  bills  not 
drawn,  accepted  or  endorsed  by  the  firm  in  proper  form.  In  the 
absence  of  evidence  to  the  contrary,  a  partner  has  no  authority  to 


to  prove  the  signature,  but  that  it  was 
used  as  the  signature  of  the  firm  by  a 
party  authorized  to  use  it  on  that  occa- 
Bion,  and  for  that  purpose.  In  other 
words,  it  must  be  shown  to  be  used  for 
partnership  objects,  and  as  a  partnership 
act.  The  proof  of  the  signature  is  not 
enough.  The  plaintiffs  must  go  further, 
and  show  that  it  is  a  partnership  signa- 
ture. In  the  present  case  the  signature 
(if  'John  Winship'  may  be  on  his  own 
individual  account,  as  his  personal  con- 
tract, or  it  may  be  on  account  of  the 
partnership.  Upon  the  face  of  the  paper 
it  stands  indifferent.  The  burden  of 
proof,  then,  is  upon  the  plaintiffs  to 
establish  that  it  is  a  contract  of  the  firm, 
and  ought  to  bind  them.  *  *  *  The 
notes  are  all  endorsed  in  the  name  of 
'John  Winship.'  For  aught,  therefore, 
that  appears  on  the  face  of  them,  they 
were  notes  only  binding  him  personally. 
The  plaintiffs  must,  then,  go  further, 
and  show,  either  expressly  or  by  impli- 
cation, that  these  notes  were  offered  by 
Winship  as  notes  binding  the  firm,  and 
not  merely  on  himself  personally ;  or 
that  the  discounts  were  made  for  the 
benefit  and  in  the  course  of  the  business 
of  the  firm.  It  is  not  sufficient  for  the 
plaintiffs  to  prove  that  the  bank,  in  dis- 
counting these  notes,  acted  upon  the  be- 
lief that  they  bound  the  firm,  and  were 
for  the  benefit  and  business  of  the  firm- 
They  must  go  further  and  prove  that 
the  belief  was  known  to  and  sanctioned 
by  Winship  himself  in  offering  the 
notes;  and  that  he  intentionally  held 
out  to  them  that  the  discounts  were  for 
the  credit  and  on  the  account  of  the 
firm ;  and  that  his  endorsement  was  the 
endorsement  of   the  firm,  and  to  bind 


them  ;  and  that  the  bank  discounted  the 
notes  upon  the  faith  of  such  acts  and 
representations  of  Winship.  The  jury 
will  judge  from  the  whole  evidence 
how  the  case  stands  in  these  respects. 
The  mere  fact  that  the  discounts  so  pro- 
cured were  applied  to  the  use  of  the 
firm  is  not,  of  itself,  sufficient  to  prove 
that  tlie  discounts  were  procured  on 
account  of  the  firm.  It  is  a  strong  cir- 
cumstance, entitled  to  weight,  but  not 
decisive." 

Again,  in  Etheridge  v.  Binney  (9 
Pick.  (Mass.)  272,274),  the  court  say: 
"  Now,  as  the  partner,  whose  name  is 
assumed  by  the  firm,  may  also  engage 
in  other  branches  of  business,  in  wliich 
he  may  want  credit  on  his  own  private 
account,  if  he  applies  for  a  loan  of 
money  to  one  who  is  ignorant  of  the  co- 
partnersliip,  and  no  information  is  given 
of  its  existence,  it  is  a  private  loan,  and 
does  not  bind  the  firm,  unless  the  cred- 
itor shall  know  that  the  money  borrowed, 
or  the  goods  procured,  by  the  individual, 
went  to  the  use  of  the  firm.  The  burden 
of  proof  in  such  case  is  upon  the  cred- 
itor, in  order  to  make  good  his  claim 
upon  the  firm,  for  he  credited  the  indi- 
vidual, and  not  the  firm,  and  it  will  be 
presumed  to  be  for  the  private  benefit 
of  the  individual,  unless  the  contrary  is 
proved.  But  if  the  existence  of  tiie  firm 
is  known  to  the  person  who  makes  the 
loan,  and  representations  are  made  to 
him  by  the  borrower  that  he  borrows 
for  the  use  of  the  company,  and  that 
they  are  answerable  for  the  debt,  so  that 
credit  is  given  to  the  company,  and  not 
to  the  individual  partner,  the  burden  of 
proof  is  upon  the  company,  when  sued, 
to  show  that  the  power  confided  to  the 


294 


CHAP.  I.,  §  v.]  FORM    OF    CONTRACT — BILLS.  184* 

use  for  partnership  purposes  any  other  name  than  the  name  of  the 
firm  ;  (n)  and  if  he  does,  and  there  is  any  substantial  variation 
which  cannot  be  shown  to  be  authorized  by  his  copartners,  the  firm 
will  not  be  liable.  If,  however,  there  is  no  substantial  variation, 
the  firm  will  be  bound. 

In    Faith    v.    Richmond  (o)    persons   carrying    on    business    in 
♦partnership  under  the  name  of  The  Newcastle  and  Sun-  r-^-.^^. 
derland  Wallsend  Coal  Company  were  held  not  liable  on  a 
note  issued  in  the  name  of  The  Newcastle  Coal  Company  ;  and  in 
Kirk  V.  Blurton,  {p)  where  two  persons  carried  on  business  under 
the  name  of  John  Blurton,  one  of  them  was  held  not  liable  on  a 


individual  has  been  abused,  and  that 
the  money  borrowed  wa.^.  applied  to  his 
private  use,  and  also  that  this  was 
known  to  the  lender  to  be  his  intention. 
This  principle  necessarily  follows  from 
cases  settled.  If  a  purchase  is  made  in 
the  name  of  a  firm,  or  money  borrowed, 
and  a  note  given  or  endorsed  in  that 
name,  this  is  prima  facie  evidence  of  a 
debt  from  the  firm,  and  it  can  only  be 
rebutted  by  proof,  in  the  defence,  tliat 
this  was  fraudulently  done  by  the  indi- 
vidual partner  for  his  own  private  use, 
and  that  this  was  known  to  the  creditor. 
So  that  in  the  limited  partnership,  if  the 
name  of  the  firm  had  been  John  Win- 
ship  &  Co.,  or  Winship  &  Binney,  all 
notes  given  to  any  creditor,  in  either  of 
those  names,  would  be  company  notes, 
unless  disproved,  as  before  stated.  Now 
the  making  and  offering  of  such  a  note 
is  nothing  more  than  a  representation 
that  the  money  is  wanted  for  the  use  of 
the  company,  and  as  they  confide  in  the 
individual,  they  will  be  bound  by  'his 
acts.  The  name  of  the  firm  here  being 
only  the  name  of  the  individual,  a  note 
offered  in  that  name,  unaccompanied  by 
any  representation,  would  of  course  im- 
port only  a  promise  by  John  Winship 
alone ;  and  the  credit  being  given  to  him 
alone,  the   creditor  would    not    recover 


against  the  firm,  without  proving  that  the 
money  actually  went  into  the  funds  of 
the  firm.  But  if  the  borrowing  partner 
states  that  he  is  one  of  a  company,  and 
that  he  borrows  money  for  the  company, 
or  purchases  goods  for  their  use,  then, 
as  there  is  such  company,  and  as  they 
have  given  him  authority  to  use  the 
company  credit  to  a  certain  extent,  and 
as  the  creditor  will  have  no  means  of 
knowing  whether  he  is  acting  honestly 
towards  his  associates,  or  otherwise,  if 
he  lends  the  money  or  sells  the  goods  on 
the  faith  of  such  representation,  the 
company  will  be  bound,  unless  they 
prove  that  the  contract  was  for  his  pri- 
vate benefit,  and  known  to  be  so  by  the 
creditor." 

(n)  Kirk  v.  Blurton,  9  Mees.  &  W. 
284 ;  Hambro'  v.  Hull  and  London  Fire 
Insurance  Co.,  3  Hurlst.  &  N.  789. 
(o)  11  Ad.  &  E.  339. 
(p)  9  Mees.  &  W.  284.  This  case 
was  decided  on  the  right  principle,  but 
most  persons  will  probably  agree  with 
Martin.  B.,  in  thinking  that  tiie  princi- 
ple was  not  properly  applied,  and  that  it 
should  have  been  left  to  the  jury  to  say 
whether  John  Blurton  and  John  Blur- 
ton &  Co.  did  not  in  fact  mean  the  same 
thing.  See  per  Martin,  B.,  5  Hurlst.  & 
N.  517. 


295 


185*  DOCTRINES   OF   AGENCY.  [bOOK    II., 

bill  drawn  and  endorsed  by  the  other  in  tiie  name  of  John  Blurton 
&  Co. 

On  the  other  hand,  in  Norton  v.  Seymour,  (ry)  where  the  name  of 
the  firm  was  Seymour  &  Ayres,  a  promissory  note  signed  by  one 
of  the  partners,  thus  :  "  Thomas  Seymour  &,  Sarah  Ayres,"  was 
held  to  bind  both.  64 

E§^ect  of  frequent  use  of  icrong  name. — In  the  above  cases  of  Faith 
V.  Richmond  and  Kirk  v.  Blurton,  the  name  used  was  not  the  name 
of  the  firm  sought  to  be  made  liable,  nor  was  there  any  evidence 
to  show  that  the  firm  was  in  the  habit  of  making  use  of  the  name 
in  question.     If  there  had  been  such  evidence  the  firm  would  have 

{q)  3  C.  B.  792,  ham  v.  Smithson,  12  Leigh  (Va.)  32. 

64.  Bills  not  in  firm  name.— Ordi-  The  proprietors  of  a  line  of  canal 
narily,  where  the  partners  of  a  firm  have  boats,  by  articles  between  themselves, 
a  copartnership  name  which  they  con-  agreed  that  the  bi'siness  of  the  concern 
Btantly  use,  they  will  not  be  bound  by  at  Rochester  should  be  conducted  by  J, 
the  use  of  a  new  name,  unless  it  be  A.,  one  of  the  proprietors,  in  his  own 
shown  that  all  the  partners  have  assented  name,  and  that  at  Albany  it  should  be 
to  the  use  of  such  new  name,  or  that  the  conducted  by  W.  M.,  an  agent,  in  his 
partner  who  was  intrusted  with  the  con-  name,  but  in  behalf  aud  upon  the  re- 
trol  and  management  of  the  business  of  sponsibility  of  the  defendants,  who  were 
the  firm  had  so  assented.  Palmer  v.  two  of  the  proprietors ;  that  no  copart- 
Stephens,  1  Den.  (N.  Y.)  471.  But  if  a  ship  name  should  be  used,  and  no  paper 
partner,  acting  under  the  authority  of  made,  accepted  or  endorsed  in  the  name 
the  firm,  given  by  parol,  to  take  up  or  on  account  of  the  copartnership ; 
money  on  joint  account,  and  draw  there-  that  each  party  should  raise  his  share  of 
for  on  A,  does  draw  a  bill  of  exchange  the  money  needed  by  the  concern  upon 
in  his  own  name,  but  directs  the  amount  his  own  responsibility,  and  the  other 
to  be  charged  to  account  of  the  firm,  and  partners  were  not  to  be  liable  therefor, 
the  parties,  knowing  the  facts,  receive  but  all  the  parties  were  to  share  equally 
the  cargo,  purchased  with  the  funds  so  in  the  profits.  Held,  that  a  bill  of  ex- 
raised,  without  objection,  the  payee  may  change  drawn  by  J.  A.,  in  his  own  name, 
recover  of  the  partners  as  on  a  partner-  to  raise  money  for  the  business  of  the 
ship  draft,  or  a  draft  guaranteed  to  the  concern  upon,  and  accepted  by  W.  M. 
holder  by  them.  Eeimsdyk  v.  Kane,  1  in  his  name,  and  which  was  discounted 
Gall.  (U.  S.)  t^30.  Thus,  it  has  been  by  the  plaintiflTs,  bound  all  the  proprie- 
held  that  a  draft  drawn  by  one  only  of  tors  as  acceptors,  and  that  all  tlie  pro- 
three  partners,  but  on  their  joint  credit,  prietors  were  chargeable  as  drawers;  and 
and  for  their  joint  benefit,  may  be  recov-  that  no  notice  of  non-payment  was  neces- 
ered  as  an  item  in  an  account  against  the  sary,  the  drawers  and  acceptors  being  the 
firm.  Beebe  v.  Rogers,  3  Iowa  319;  same  persons.  Bank  of  Rochester  v. 
Beach  v.  State  Bank,  2  Ind.  488.  Contra,  Monteath,  1  Den.  (N.  Y.)  402. 
Heenan  v.  Nash,  8  Minn.  407  ;  Cunning- 

296 


CHAP.  I.,  §  v.]  FORM   OP   CONTRACT — BILLS.  185* 

been  liable ;  for  whatever  the  name  used  may  be,  if  it  is  that  ordi- 
narily employed  by  a  partner  whose  business  it  is  to  attend  to  the 
bills  and  notes  of  the  firm,  the  other  partners  will  not  be  heard  to 
say  that  such  name  is  not  the  name  of  the  firm  for  the  purpose 
for  which  he  has  habitually  used  it. 

Therefore,  where  the  name  of  a  firm  was  Hapgood  &  Co.,  but 
the  managing  partner  was  in  the  habit  of  endorsing  bills  of  the 
firm  in  the  name  of  Hapgood  &  Fowler,  which  had  formerly  been 
the  name  of  the  firm,  it  was  held  that  such  endorsement  was  valid, 
although  the  other  partners  were  not  shown  to  have  authorized  the 
use  of  the  name  in  question.  (/•)  65 

Liability  of  persons  using  the  wrong  name. — Again,  although  in 
Faith  V.  Richmond  and  Kirk  v.  Blurton,  the  firm  was  held  not 
bound,  in  consequence  of  the  name  of  the  firm  not  being  used, 
those  members  of  the  firm  who  actually  made  use  of  the  names  in 
question  were  held  liable ;  for  the  name  used  was  made  theirs  by 
*1  Sfll  ^^^^^^  ^^"^^  ^^^-  (^)  Upon  the  *same  principle,  if  blank  bills 
-^  are  drawn  and  endorsed  by  a  firm,  and  before  they  are 
negotiated  one  partner  dies  and  the  name  of  the  firm  is  changed  by 
the  surviving  partners,  and  the  bills  previously  drawn  and  en- 
dorsed are  then  negotiated,  these  bills  will  be  binding  on  the  new 
firm,  although  the  name  on  the  bills  is  that  of  the  old  firm  and  not 
that  of  the  new.  (t) 

Cases  in  tohioh  error  in  name  is  unimportant. — A  bill  drawn  on 
a  firm  by  a  wrong  name  and  accepted  in  its  right  name,  binds  the 
firm ;  {u)  and  a  bill  drawn  on  a  firm  and  accepted  by  one  partner 

(r)  Williamson  v.  Johnson,  1  Barn.  &  a  person  of  the  name  of  Joseph  Keep  was 

C.  146.  held  liable  on  a  bill  accepted  by  himself 

65.  Effect  of  frequent  use  of  wrong  in  the  name  of  John  Keep  &  Co. 
name. — In  Crocker  v.  Colwell  (46  N.  Y.        (I)  Usher    v.  Daimcev,    4  Camp.  97. 

212)  one  partner  kept  the  bank  account  If  a  change  is  made  in  a  firm,  and,  by  a 

in   his  own  name,  with  the  knowledge  mistake,  a  contract  is  entered  into  with 

and  consent  of  the  others,  all  partner-  it  in  its  old  name,  the  members  of  the 

ship  debts  and  accounts  being  paid  by  new  firm  may  sue  on  it,  provided   the 

checks  drawn  and  signed  by.  him  alone,  other  party  is  not  prejudiced  by  their  so 

Held,  that  the  firm  was  liable  upon  such  doing.     Mitchell   v.   Lapage,    Holt,  N. 

a  check  drawn  in  its  business.     See,  also,  P.  Cas.  253.     But  see  Boulton  v.  Jones,  2 

Lemon  v.  Fox,  21  Kan.  152.  Hurlst.  &  N.  564. 

(«)  So,  in  Wild  v.  Keep,  6  Car.  &  P.  235,        (w)  Lloyd  v.  Ashby,  2  B.  &  Ad.  23. 

297 


186*  DOCTRINES   OF    AGENCY.  [bOOK    II.^ 

in  his  o^A'n  name  only  has  been  hekl  to  bind  the  firm  on  the  ground 
that  the  word  "  accepted/'  if  written  by  one  of  the  partners,  is  suffi- 
cient without  any  signature ;  and  that  his  signature,  if  affixed,  may 
be  treated  as  redundant,  (x)  But  there  is  no  other  case  in  wliich  a 
firm  is  liable  on  a  negotiable  instrument,  made,  drawn  or  endorsed 
in  the  name  of  one  of  the  partners  only,  (y)  unless,  indeed,  his  name 
is  the  name  of  the  firm,  (z)  Even  a  bill  drawn  on  one  partner  and 
accepted  by  him  on  behalf  of  the  firm  does  not  bind  the  firm,  the 
other  partners  not  being  drawees,  (a)  66 

A  bill  drawn  on  a  firm  and  accepted  by  one  partner  in  the  name 
of  the  firm  and  in  his  own  name,  does  not  bind  him  separately  if 
the  firm  is  bound  by  his  acceptance.  (6)  But  if  he  has  no  authority 
to  bind  the  firm,  he  is  himself  liable  on  the  bill.  This  was  held  in 
Owen  V.  Van  Uster,  (c)  where  a  bill  was  drawn  on  "  The  Allty- 
Crib  Mining  Company,"  and  was  ^accepted  " per  proc.  The  r^-i  0/7 
AUty-Crib  Mining  Company,  W.  T.  Van  Uster,  London, 
Manager."  It  was  held  that  Van  Uster  was  personally  liable  on 
this  bill,  he  being  one  of  the  company  on  which  the  bill  was  drawn, 
and  therefore  one  of  the  drawees  and  also  an  acceptor. 

c.  Promissory  notes. — Thirdly,  as  regards  promissory  notes. 
With  respect  to  promissory  notes  the  following  rules  are  deducible 
from  the  cases : 

1.  Promise  by  one  partner. — If  a  partner  promises  for  himself, 
and  not  for  himself  and  copartners,  he  only  is  liable  on  the  note, 
though  he  may  promise  to  pay  a  partnership  debt,  (c/)  67 

(x)  Mason  v.  Eumsey,  1  Camp.  384 ;  66.   Where  a  partner  in  a  numeroua 

Jenkins  v.  Morris,  16  Mees.  &  W.  879 ;  firm  has  power  to  bind  the  firm  by  giv- 

Byles  on  Bills  (11th   ed.)  43  and  45;  ing  notes,  a  variation  in  the  style  of  the 

Id.  (14th  ed.),  p.  47,  et  seq.     In  such  a  company  is  not  material.     Kinsman  v. 

case  the  acceptor  may  also  be  sued  alone.  Dallam,  5  T.  B.  Mon.  (Ky.)  382. 

See  infra.  (6)  Re  Barnard,  32  Ch.  D.  447  ;  Mal- 

(y)  Emly  v.  Lye,  15  East  7  ;  Ex  parte  colmson  v.  Malcolmson,  L.  R.,  1  Ir.  Ch. 

Bolitho,  Buck  100;  Lloyd  v.  Ashby,  2  D.  228. 

Car.  &  P.  138;  Williams  v.  Thomas,  6  (c)   10  C.  B.  318.     The  company  in 

Esp.  18.  this  case  was  a  mere  partnership. 

(z)  As  to  which,  see  ante  pp.  *182,  (d)  Siffkin  v.  Walker,  2  Camp.  308; 

*183.  Murray  v.  Somerville,  2  Camp.  99,  note; 

(a)  NichoUs  v.  Diamond,  9  Ex.  154;  and  see  Ex  parte  Harris,  1  Madd.  583. 

Mare  v.  Charles,  5  El.  &  B.  978.  67.  Promise  by  one  partner.— It  has 

298 


CHAP.  I.,  §  v.]  '   FORM  OF  CONTRACT NOTES. 


187* 


2.  Promise  by  several  partners. — If  several  partners  sign  a  note 
in  this  form,  ''  I  promise  to  pay,"  all  who  sign  the  note  are  liable 
on  it,  jointly  and  severally,  (e)  68 


been  held  that  generally,  when  a  mem- 
ber of  a  firm  makes  a  note,  or  draws  a 
bill,  in  his  own  name,  tlioiigh  it  is  known 
to  be  on  the  partnership  account,  the 
firm  will  not  be  bound.  Ke  Warren, 
Dav.  (U.  S.)  320;  Farmers'  Bank  v. 
Bayless,  35  Mo.  428 ;  Foster  v.  Hall,  4 
Humph.  (Tenn.)  346. 

But  the  better  considered  rule  seems 
to  be  that  a  note,  given  in  the  individual 
name  of  one  partner,  is  prima  facie 
deemed  his  individual  obligation,  unless 
his  partner  be  a  dormant  partner  (Scott 
V.  Colmesnil,  7  J.  J.  Marsh.  (Ky.)  416; 
Graeff  :■.  HitoJiman,  5  Watts  (Pa.)  454) ; 
and  in  order  to  make  such  a  note  bind- 
ing upon  the  firm,  it  must  be  made  to 
appear,  affirmatively,  that  it  was  given 
and  received  as  a  firm  note,  binding 
upon  all  the  partners  (Hubbeli  v.  Woolf, 
15  lud.  204  ;  Buckner  v.  Lee,  8  Ga.  285  ; 
Staats  V.  Hewlett,  4  Den.  (N.  Y.)  559) ; 
and  to  have  been  intended  to  have  a 
joint  operation.  Crozier  r.  Kirker,  4 
Tex.  252.  S.  P.,  Puckett  v.  Stokes,  58 
Tenn.  442 ;  Farmers'  Bank  v.  Bayless, 
41  Mo.  275;  Chemung  Bank  v.  Ingra- 
ham,  58  Barb.  (N.  Y.)  290. 


Chancellor  Kent  states  the  rule  as  fol- 
lows :  "  In  all  contracts  concerning  ne- 
gotiable paper,  the  act  of  one  partner 
binds  all ;  and  even  though  he  signs  his 
individual  name,  provided  it  appears  on 
the  face  of  the  paper  to  be  on  partner- 
ship account,  and  to  be  intended  to  have 
a  joint  operation.  But  if  a  note  or  bill 
be  drawn  by  one  partner  in  his  own 
name  only,  and  without  appearing  to  be 
on  partnership  account,  or  if  one  partner 
borrow  money  on  his  own  security,  the 
partnership  is  not  bound  by  the  signa- 
ture, even  though  it  was  made  for  a  part- 
nership purpose,  or  the  money  applied 
to  a  partnership  use.  The  borrowing 
partner  is  the  creditor  of  the  firm,  and 
not  the  original  lender.  If,  however, 
the  bill  be  drawn  by  one  partner,  in  his 
own  name,  upon  the  firm  or  partnership 
account,  the  act  of  drawing  has  been 
held  to  amount,  in  judgment  of  law,  to 
an  acceptance  of  the  bill  by  the  drawer 
in  behalf  of  the  firm,  and  to  bind  the 
firm  as  an  accepted  bill.  And  though 
the  partnership  be  not  bound  at  law  in 
such  a  case,  it  is  held  that  equity  will 
enforce  payment  from  it,  if  the  bill  was 


(e)  Clarke  v.  Blackstock,  Holt  N.  P. 
Cas.  474;  March  v.  Ward,  1  Peake  (3d 
ed.)  177. 

68.  Promise  by  several  partners. — 
A  note,  signed  by  two  partners  with 
their  individual  names,  is  sufficient  to 
bind  the  firm.  Maynard  v.  Fellows,  43 
N.  H.  255 ;  Kendrick  v.  Tarbell,  27  Vt. 
512;  In  re  Thomas,  17  Bankr.  Reg.  54. 
But  it  is  held  that  where  the  priority  of 
different  creditors  attaching  the  property 
of  a  firm  is  to  be  determined  by  the  in- 
dividual   or    partnership   character   of 


their  respective  claims,  the  mere  fact 
that  a  promissory  note  is  signed  by  the 
individuals  who  compose  the  firm  is  in- 
sufficient to  show  that  it  is  a  partnership 
debt.     Gay  v.  Johnson,  45  N.  H.  587. 

A  note  made  by  one  partner,  in  which 
he  says,  "  I  promise  to  pay,"  &c.,  but 
subscribes  the  partaership  name,  "  A,  B 
&  Co.,"  is  binding  on  the  firm,  and  not 
on  the  partner  alone  who  executed  it. 
Doty  V.  Bates,  11  Johns.  (N.  Y.)  544. 
But  compare  Sherwood  v.  Snow,  46  Iowa 
481. 


299 


187*  DOCTRINES    OF    AGENCY.  [bOOK   II., 

3.  Promise  by  one  in  name  of  firm. — If  one  partner  promises,  in 
the  name  of  the  firm,  to  pay  that  for  which  he  and  not  the  firm  is 
liable,  the  promise  binds  him,  at  all  events.  As  an  illustration  of 
this,  reference  may  be  made  to  Shipton  v.  Thornton.  (/)  There 
the  defendant,  a  partner  in  the  house  of  Thornton  &  West,  was 
solely  liable  to  the  plaintiff  for  certain  freight,  and  he  gave  the 
plaintiff  a  note  in  this  form  :  69 

actually  drawn  on  partnership  account."  Where  merchandise  was  delivered  by 

3  Kent's  Com.  41-44.  partners,  in  payment  of  a  note  signed 

In  Macklin  v.  Crotcher  (6  Bush  (Ky.)  by  one  of  the  partners,  but  given  for  a 

401)  it  is  required  that  in  order  to  bind  a  partnership  transaction,  it  was  held  that 

partner  by  a  note  drawn  by  his  copart-  the  vendors  could  not  recover  tlie  value 

ner  in  iiis  own  individual  name,  it  must  of  the  merchandise  of  the  vendees,  on 

appear  that  such  individual  name  was  the  ground  that  it  was  not  a  note  of  the 

the  style  of  the  firm.  partnership.     Owings  v.  Trotter,  1  Bibb 

In  Thayer  v.  Smith   (116  Mass.  363)  (Ky.)  157. 

it  is  held  that  the  accommodation  en-  A   member  of  a  firm,  which  was  well 

dorser  of  a  note  signed  by  one  partner,  known,  purchased  a  horse,  for  which  he 

as  maker,  in  his  individual  name,  and  gave   his   individual    note.     Held,   that 

by  the  other  partner  as  endorser,  may  the  partnership  was  not  liable,  although 

recover  the  amount  he  is  compelled  to  the  avails  of  the  horse,  when  sold,  went 

pay  as  such   accommodation    endorser,  into  the  partnership  fund.     Holmes  v. 

in  an  action  against  the  firm  for  money  Burton,  9  Vt.  252. 

paid  to  its  use.  A  declaration  stated  that  the  defend- 
In  Arnold  v.  Camp  (12  Jolins.  (N.  Y.)  ants,  A  and  B,  formed  a  copartnership, 
409)  it  is  held  that  where  a  promissory  and  agreed  between  themselves  that  A 
note  is  given  by  a  partnership,  and  the  should  buy  certain  goods  for  the  firm, 
payee  afterwards  takes  the  individual  and  execute  his  own  note  in  payment, 
note  of  one  of  the  partners  for  the  on  which  they  should  be  jointly  liable, 
amount,  and  gives  up  the  partnership  whereupon  A  bought  the  goods  ;  that  in 
note,  it  is  a  payment  of  the  partnership  consideration  of  the  acceptance  of  A's 
note.  note  in  payment,  and  the  delivery  of  the 
Instances. — Where  two  persons,  by  goodstothe  firm,  the  defendants  promised 
virtue  of  an  agreement,  became  partners  to  pay  the  amount  of  the  note  when  it  fell 
as  to  third  persons,  without  any  firm  due.  J?ieW  to  show  a  good  consideration 
name,  and  one  of  the  parties  who  trans-  for  tlie  promise  of  B,  and  that  it  was  an 
acted  the  business  gave  a  note,  signed  in  original  undertaking,  and  not  a  promise 
his  own  individual  name,  for  goods  pur-  to  pay  t?iie  debt  of  another.  Hotchkiss 
chased,  and  the  payee  was  ignorant  of  v.  Ladd,  36  Vt.  593. 
the  relations  of  the  parties,  it  was  held  (/)  9  Ad.  &  E.  314.  See,  too,  Hud- 
that  the  dormant  partner  was  not  liable  son  v.  Kobinson,  4  Mau.  &  S.  475. 
on  the  note.  Palmer  v.  Elliott,  1  Cliff.  69.  Promise  by  one  partner  in 
{U.  S.)  63.  name  of  firm. — Where  the  articles  of 

300 


CHAP.  I.,  §  v.]  FORM    OF    CONTRACT NOTES. 


187^ 


"  I  hereby  engage  to  pay  the  amount  of  freight,  &c., 

"  I  am,  &c., 

"  K.  &  R.  Thornton  &  West." 

On  this  note  the  defendant  was  held  separately  liable. 

4.  Joint  and  several  notes. — One  partner  has  no  authority,  as. 
such,  to  bind  himself  and  copartners  jointly  and  severally,  {g)  But 
if  some  members  of  a  firm  make  a  joint  and  several  promissory 
note,  they  will  be  personally  liable,  although  they  may  have  signed 
only  on  behalf  of  themselves  and  copartners ;  and  persons  sign- 
ing notes  in  the  following  forms  have  been  held  liable  on  them  a& 
*makers,  and  not  merely  incidentally  as  members  of  the 


^88] 


company  to  which  they  belonged  : 


"  We  jointly  and  severally  promise  to  pay,  &c.,  value  received,  for  and  on  be- 
half of  the  Wesleyan  Newspaper  Association. 

"Parker  Story,  ) 

"James  Ware,     f  I>irector8."  (A) 


copartnership  do  not  fix  the  name  of 
the  firm,  and  a  contract  is  made  by  one 
partner  for  the  joint  account,  a  note 
executed  by  one  for  the  whole,  in  name 
of  himself  and  company,  is  binding 
upon  all.  Aspinwall  v.  Williams,  2  Hill 
(S.C.)  64. 

Where  a  partnership  is  limited  by 
articles  to  a  particular  business,  if  one 
partner  make  a  note  in  the  partnership 
name  for  other  than  such  business,  it 
lies  with  the  person  suing  the  note  to 
show  an  assent,  express  or  implied,  on 
the  part  of  the  other  partners  to  the 
transaction  ;  a  disclaimer  of  it,  to  any 
other  than  the  party  to  whom  the  note 
was  given,  cannot  be  shown  in  evidence. 
Waller  v.  Keyes,  6  Vt.  257. 

C,  one  of  the  partners  of  the  firm  of 
A,  B  &  C,  executed  the  following  note: 
"  Dec.  7,  1835.  One  day  after  date,  due 
J.  Sithens  267  dollars  87  cents,  for  work 
done  on  West  Kiver  bridge  for  the  com- 
pany of  A,  B  and  C.  By  me,  C."  Held, 
that  this  note  bound  the  firm.    Caldwell 


V.  Sithens,  5  Blackf.  (Ind.)  99. 

A  member  of  the  firm  of  "  Charles  G. 
Eamsey  &  Co."  signed  a  promissory 
note  "  Chas.  G.  Ramsey  &  Co."  Held, 
in  a  suit  upon  the  note  against  the  firm, 
that  it  was  a  question  of  fact  whether 
there  was  any  substantial  difference  be- 
tween the  signature  and  the  firm  name, 
and  that  the  jury  were  well  warranted 
in  finding  that  the  name  and  signature 
were  the  same.  Tilford  v.  Ramsey,  37 
Mo.  563. 

A  note  for  a  firm  debt,  to  which  one 
partner  has  signed  the  individual  names 
of  the  firm,  is  as  good  ^s  if  he  signed 
the  firm  name.  Holden  v.  Bloxum,  3& 
Miss.  381. 

ig)  Maclae  v.  Sutherland,  3  El.  &  B.  1, 
which  shows  that  a  joint  and  several 
promissory  note  is  valid  as  a  joint 
note,  though  it  is  not  binding,  as  a 
several  note,  on  any  person  who  does 
not  sign  it. 

(A)  Healey  v.  Story,  3  Ex.  3,  in  which 
Story  and  Ware  were  sued  jointly. 


301 


188*  DOCTRINES    OF    AGENCY.  [bOOK    II., 

"  We,  the  directors  of  the  Royal  Bank  of  Australia,  for  ourselves  and  other 
shareholders  of  this  company,  jointly  and  severally  promise  to  pay,  &c.,  value 
received,  on  account  of  the  company. 

"T.  W.  Sutherland,  \ 

"M.bTyT'^'  >  Directors."  (i) 

"A.  Duff,  J 

"Midland  Counties  Building  Society. 
"We  jointly  and  severally  promise  to  pay,  &c. 

"  W.  R.  Heath,  ) 

"S.  B.  Smith,      |  directors. 

"  W.  D.  Fisher,  Secretary."  (k)  ""^ 

5.  Promise  for  self  and  copartners. — If  a  partner  promises  for  him- 
self and  copartner,  this  amounts  to  a  promise  by  the  firm.  (T)  Accord- 
ingly the  firm  has  been  held  liable  on  notes  in  the  following  form : 

"  Sixty  days  after  sight  I  pay  A  or  order  £200,  value  received. 

"For  J.  Matthew, 
"T.  Whitsmith, 
"T.  Smithson, 

"  J.  Matthew."  (m) 

And,  contrary  to  an  older  decision,  {n)  the  firm  has  been  held  liable 
on  notes  in  the  following  form : 

*"  Leicester  and  Leicestershire  Bank. 
"  I  promise  to  pay  the  bearer,  on  demand,  £5,  value  received.  *- 

"  For  John  Clarke, 

"  Richard  Mitchell, 
"Joseph  Phillips, 
"Thomas  Smith, 

"  Richard  Mitchell."  (o) 

(i)  Penkivil  v.  Connell,  5  Ex.  381,  in  individual  transaction.     Crouch  v.  Bow- 

which  Connell  only  was  sued.  man,  3  Humph.  (Tenn.)  209. 

(k)  Bottomley  v.  Fisher,  1  Hurlst.  &  (l)  Smith   v.   Bailey,    11    Mod.   401 ; 

C.  211,  in  which  Fisher  only  was  sued.  Lane  v.  Williams,  2  Vern.  277  and  292; 

70.  Joint  and  several  notes. — A,  B,  Smith  ?'.  Jarves,  2  Ld.  Raym.  1484. 

C  and  D  were  partners,  under  the  style  (in)  Galway  v.  Matthew,  1  Camp.  403. 

of  A,  B  &  Co.     C  executed  a  note,  sign-  (n)  Hall  v.  Smith,  1  Barn.  &  C.  407, 

ing   the    names  of  each  of    the    firm,  where  the  form  was,  "  I  promise  to  pay 

Held,  on  a  plea  of  non  est  factum,  filed    for  A  B,  C  D  and  E  F.    Signed,  A 

by  A,  B  and  D,  that  C  had  no  power  to  B,"  and  which  was  held  to  bind  A  B 

bind  them  by  such  signature ;  but  that  separately. 

it  constituted  the  note  prima  facie  an  (o)  Ex  parte  Buckley,  14  Mees.  &  W. 

302 


CHAP.  I.,  §  VI.]  LIABILITY    ON    CONTRACTS.  189* 

SECTION     VI. LIABILITY     OF     PARTNERSHIPS     IN     RESPECT     OP 

CONTRACTS   NOT  BINDING  ON   THEM,    BUT  OF   WHICH   THEY 
HAVE   HAD   THE   BENEFIT. 

Effect  of  having  had  the  benefit  of  a  contract. — It  is  au  erroneous 
but  pojDular  uotioii  that  if  a  firm  obtains  the  benefit  of  a  contract 
made  with  one  of  its  partnsrs,  it  must  needs  be  bound  by  that 
contract.  Now,  although  the  circumstance  that  the  firm  obtains 
the  benefit  of  a  contract  entered  into  by  one  of  its  members  tends 
to  show  that  he  entered  into  the  contract  as  the  agent  of  the  firm,  (_p) 
such  carcumstance  is  no  more  than  evidence  that  this  was  the  case, 
and  the  question  upon  which  the  liability  or  non-liability  of  the 
firm  upon  a  contract  depends  is  not,  "  Has  the  firm  obtained  the 
benefit  of  the  contract  ?  "  but,  "  Did  the  firm,  by  one  of  its  part- 
ners or  otherwise,  enter  into  the  contract  ?  "  (g) 

A  leading  case  on  this  head  is  Emly  v.  Lye.  {r)  There  a  part- 
ner drew  bills  in  his  own  name,  and  sent  them  to  an  agent  of  the 
firm  in  order  that  he  might  get  them  discounted.  They  were  dis- 
counted, and  the  money  obtained  was  remitted  by  the  agent,  and 
was  paid  to  the  account  of  the  firm.  It  was  held  that  the  firm  was 
neither  liable  for  the  amount  of  the  bills  on  the  bills  themselves, 
nor  for  their  proceeds  on  the  common  counts.  There  was  no  loan 
to  the  partnership,  no  contract  with  it  and  no  liability  attached  to 
the  firm  by  the  fact  that  the  partner  who  alone  was  liable  had  ap- 

o.-.^^-,  plied  the  monev,  after  *he  u'Ot  it,  for  the  benefit  of  his  co- 
*1901  .  ,  . 

-*  partners  as  well  as  for  tlie  l)enfc'fit  of  himself. 

Again,  in  Bevan  v.  Lewis,  (s)  one  partner  borrowed  money  and 

executed  warrants  of  attorney  to  confess  judgment.     The  money 

which  he  obtained  was  applied  by  him  for  the  benefit  of  the  part- 

469,  and    1    Ph.   562,   and    Ex    parte  Ernest  v.  Nicholls,  6   H.  L.  Cas.  423. 

Clarke,  De  G.  153,  reversing  Ex  parte  Similarly,  the  fact  that  one  partner  only 

Christie,  3  Mont.,  D.  &  D.  736.  has  obtained   the  benefit  of  a  contract 

ip)  Per    Rolfe,    B.,    in    Beckham    v.  does  not  show  conclusively  that  the  firm 

Drake,  9  Mees.  &  W.  99,  100.  is  not  bound.     Ex  parte  Bonbonus,  8 

{q)  Per    Rolfe,    B.,   ubi    supra.     See,  Ves.  544. 

too,  Kingsbridge  Flour  Mill  Co.  v.  The  (?•)  15  East  7. 

Plymouth   Grinding   Co.,   2    Ex.  718;  (s)  1  Sim.  376. 

303 


190* 


LIABILITY    ON    CONTRACTS. 


[book    II., 


nership,  and  was  obtained  in  part  with  the  knowledge  of  his  co- 
partner, in  order  that  it  might  be  so  applied.  But  it  was  held  that 
the  partnership  was  not  liable  for  the  money,  the  loan  having  been 
clearly  made  to  the  one  partner  against  whom  alone  judgment  was 
to  be  entered,  and  not  to  tiie  firm  through  him.71 

Money  borrowed  by  one  partner. — So,  in  ordinary  cases,  when  one 
partner  borrows  money  without  the  authority  of  his  copartners,  the 
contract  of  loan  is  with  him  and  not  with  the  firm,  and  the  nature 
of  that  contract  is  not  altered  by  his  apj)li('atioii  of  the  money. 
The  lender  of  the  money  has,  therefore,  no  right  to  repayment  by 
the  firm,  although  the  money  may  have  been  applied  for  its 
benefit,  (t)  unless  he  can  bring  himself  within  the  equitable  doc- 
trine referred  to  below.  72 


71.  Effect  of  having  had  the  benefit 
of  a  contract. — A  firm  is  not  liable  for 
debts  contracted  by  the  partners  before 
the  firm  commenced,  though  the  prop- 
erly for  which  the  debt  had  been  con- 
tracted had  been  introduced  among  the 
partnership  property  ;  nor  with  rent  on 
a  lease  to  a  partner.  Brooke  v.  Evans, 
5  Watts  (Pa.)  196. 

But  where  a  note  is  made  in  the  part- 
nership name  by  one  member  without 
the  authority  of  the  other,  who,  how- 
ever, makes  no  objection  when  informed 
thereof,  he  is,  if  benefited  as  partner, 
jointly  bound.  Otherwise,  where  iu  the 
absence  of  authority  he  has  not  impliedly 
ratified  or  been  benefited  by  the  trans- 
action. Stewart  v.  Caldwell.  9  La.  Ann. 
419. 

So,  also,  a  lease  under  seal,  executed 
by  one  partner  in  the  name  of  the  firm 
as  lessees,  the  firm  occupying  thereunder 
for  two  years,  paying  rent  directly  to  the 
lessor,  is  evidence  of  an  agreement  for  a 
lease,  which,  as  they  have  had  the  benefit 
of  it,  will  be  enforced  against  the  sur- 
viving partners  after  the  death  of  him 
who  executed  it.  Kyle  v.  Koberts,  6 
Leigh  (Va.)  495. 


And  where  one  partner,  negotiating 
as  such,  with  a  stranger  for  the  doing  of 
a  certain  thing,  makes  a  promise,  on  the 
strength  of  which  the  agreement  to  do 
that  thing  is  made  and  carried  out 
with  the  firm,  the  firm  is  liable  on  the 
promise.  Pond  v.  Starkweather,  99  N. 
Y.  411. 

{t)  See  Smith  v.  Craven,  1  Cromp.  & 
J.  500 ;  Hawtayne  v.  Bourne,  7  Mees.  & 
W.  595 ;  Burmester  v.  Norris,  6  Ex. 
796;  Eicketts  v.  Bennett,  4  C.  B.  686; 
The  Worcester  Corn  Exchange  Co.,  3 
De  G.,  M.  &  G.  180 ;  Fisher  v.  Tayler,  2 
Hare  218.  In  all  these  cases  the  firm 
got  the  benefit  of  the  money  borrowed, 
and  yet  was  held  not  liable  to  repay  it. 

72.  Money  borrowed  by  one  part- 
ner.— The  rule  is  settled  that  a  firm  is 
not  rendered  liable  for  money  loaned  to 
one  partner,  upon  his  individual  credit^ 
by  the  mere  fact  that  the  money  wa» 
afterward  applied  to  the  benefit  of  the 
firm.  Union,  &c..  Bank  of  Memphis  v. 
Day,  12  Heisk.  (Tenn.)  413  ;  Peterson  v. 
Koach,  32  Ohio  St.  374.  But  in  Siegel 
I'.  Chidsey  (28  Pa  St.  279),  where  money 
was  obtained  on  the  personal  credit  of 
one  partner,  but  used  solely  for  partner- 


304 


CHAP.  I.,  §  VL]  liability    OX    CONTRACTS.  190* 

Goods  supplied  to  one  jjcirtner. — The  same  rule  applies  to  goods, 
services  and  works  supplied  to  or  done  for  one  partner,  either  on 
his  own  account,  or  if  for  the  firm,  at  the  request  of  one  of  its 
members  acting  beyond  the  limits  of  his  apparent  as  well  as  of  his 
real  authority.  The  firm  does  not,  in  any  case  of  this  sort,  enter 
into  any  contract,  express  or  implied,  with  the  person  dealing  with 
the  partner  in  question,  and  does  not  incur  any  obligation  towards 
that  person  by  reason  of  the  circumstance  that  it  gets  the  benefit  of 
what  he  has  done,  (u)  The  principle  of  these  decisions  governs 
those  cases  in  which  one  partner,  in  breach  of  trust,  but  without  the 
knowledge  or  consent  of  his  copartners,  *applies  trust  money 
over  which  he  has  control  as  a  trustee,  to  the  purposes  of  ■- 
the  firm.  The  fact  that  the  firm  has  been  benefited  by  the  money 
in  question  does  not  necessarily  render  it  liable  to  the  owners  of  the 
money,  (x)  73 

Equitable  doctrine  in  these  cases. — Where,  however,  the  money 
borrowed  by  one  partner  in  the  name  of  the  firm,  but  without  the 
authority  of  his  copartners,  has  been  applied  in  paying  off  debts  of 
the  firm,  the  lender  is  entitled  in  equity  to  repayment  by  the  firm 
of  the  amount  which  he  can  show  to  have  been  so  applied,  and  the 
same  rule  extends  to  money  bona  fide  borrowed  and  applied  for  any 
other  legitimate  purpose  of  the  firm,  {y)     This  doctrine  is  founded 

ship  purposes,  it  was  held  that  this  was  [y)  The  leading  cases  on  this  subject 

a   good   consideration  for  a  subsequent  are  Ex  parte  Chippendale  (the  German 

promise   of  the  firm   to   pay  the  debt.  Mining  Co.'s  case),  4  De  G.,  M.  &  G. 

(u)  See,  in  addition  to  the  cases  al-  19;  The  Cork  and  Youghal  Rail.  Co., 

ready  cited,  Kingsbridge  Flour  Mill  Co.  L.  R.,  4  Ch.  748 ;  Blackburn  Building 

V.  Plymouth  Grinding  Co.,  2  Ex.  718 ;  Society  v.  Cunliffe,  Brooks  &  Co.,  22  Ch, 

Lloyd  V.  Fteshfield,  2  Car.  &  P.  325,  and  D.  61,  and  9  App.  Cas.  857,  and  29  Ch. 

9  Dowl.  &  R.  19;   Galway  v.  Matthew,  D.  902;  Baroness  Wenlock  v.  River  Dee 

10  East  264;  Kilgour  v.  Finlyson,  1  H.  Co.,  19  Q.  B.  D.  155.  The  case  of  in- 
Bl.  155;  Ex  parte  Wheatly,  Cooke's  fants  is  analogous;  an  infant  is  liable 
Bank  L.  (8th  ed.)  5.34;  Ball  v.  Lanes-  for  necessaries;  but  he  was  not  liable  at 
borough,  5  Bro.  P.  C.  480 ;  Ex  parte  law  for  money  lent,  though  applied  in 
Peele,  6  Ves.  603,  604 ;  Ex  parte  Hartop,  the  purchase  of  necessaries.  Darby  v. 
12  Id.  352.  Boucher,  1  Salk.  279.     But  otherwise  in 

(x)  Ex  parte  Apsey,  3  Bro.  C.  C.  265;  equity,  Marlow  v.  Pitfield,  1  P.  Wms. 
Ex  parte  Heaton,  Buck  386.  See  ante  558.  So,  a  husband  was  not,  at  law,  liable 
P-  *160.  for  money  lent  to  his  wife  to  enable  her 

73.  See  supra,  p.  *304,  note  72.  to  obtain  necessaries,  and  applied  by  her 

305  20 


191* 


LIABILITY   ON   CONTRACTS. 


[book  IL, 


partly  on  the  right  of  the  lender  to  stand  in  equity  in  the  place  of 
those  creditors  of  the  firm  whose  claims  liavc  been  paid  off  by  his 
money,  and  })artly  on  the  right  of  the  borrowing  partner  to  be  in- 
demnified by  the  firm  against  liabilities  bona  fide  incurred  by  him 
for  the  legitimate  purpose  of  relieving  the  firm  from  its  debts  or  of 
carrying  on  its  business,  (z)  The  equitable  doctrine  in  question  is 
limited  in  its  application  to  cases  falling  under  one  or  other  of  the 
princijjles  above  indicated,  (a)  74 


for  that  purpose.  Knox  t;.  Bushell,  '6  C. 
B.  (N.  S.)  334.  Bat  see,  in  equity, 
Jenner  v.  Morris,  1  Drew.  &  S.  218,  and 
3  De  G.,  F.  &  J.  45 ;  Deare  v.  Soutten, 
9  Eq.  151 ;  and  observe  that  in  the  last 
case  the  plaintiff  had  no  ground  for  suing 
in  equity,  except  his  inability  to  recover 
at  law. 

(z)  See  infra,  book  III.,  eh.  3,  §  1. 

(a)  See,  in  addition  to  the  cases  cited 
in  note  iy),  National  Permanent  Benefit 
Building  Society,  5  Ch,  309  ;  Magdalena 
Steam  Nav.  Co.,  Johns.  690  ;  Athenseum 
Life  Ins.  Soc.  v.  Pooley,  3  De  G.  &  J.  294. 

74.  Equitable     doctrine    in     these 


cases. — One  partner  is  liable  for  the 
acts  of  another  partner,  whereby  decep- 
tive appearances  are  created  in  land 
which  is  the  subject  of  the  partnership, 
and  whereby  the  partnership  realizes 
the  proceeds  of  the  fraud.  Chester  v. 
Dickerson,  52  Barb.  (N.  Y.)  349. 

Though  the  payee  of  a  partnership  note 
believed  that  the  proceeds  of  the  note 
were  to.be  applied  to  the  individual  debts 
of  one  of  the  firm,  the  note  would  still 
be  binding  on  the  firm,  if  the  proceeds 
were  in  fact  used  by  the  firm.  Hamil- 
ton V.  Summers,  12  B.  Mon.  (Ky.)  11. 


306 


CHAP.  II.,  §  I.]    INDIVIDUAL   PAETNER'S   LIABILITY.  192" 


*192]  *CHAPTER  II. 

OF  THE  NATURE,   EXTENT   AND   DURATION   OF   THE   LIABILITY   OP   INDIVIDUAL 
MEMBERS  OF   PARTNERSHIPS   TO   CREDITORS. 


Section  I. — Nature  of  the  Liability,  *192. 

1.  As  regards  contracts,  *192. 

2.  As  regards  torts  and  frauds,  *198. 
Section  II. — Extent  of  the  Liability,  *200. 
Section  III. — Duration  of  Liability,  *201. 

1.  Commencement  of  liability,  *201. 

2,  Termination  of  liability,  *210. 

a.  As  to  future  acts,  *210. 

b.  As  to  past  acts,  *223. 

(1)  Payment,  *22.5. 

(2)  Release,  *237. 

(3)  Substitution  of  debtors  and  securities,  *239. 

(4)  Lapse  of  time,  *257. 


Nature  and  extent  of  a  jiartner's  liability. — Having  examined  in 
tlie  preceding  pages  the  liabilities  of  a  firm  for  the  acts  of  its  mem- 
bers, it  is  proposed  in  the  present  chapter  to  investigate  the  liability 
of  the  individual  partners  in  respect  of  such  obligations  as,  upon 
the  principles  already  discussed,  are  binding  on  them  all. 


SECTION   I. — NATUEE   OF   THE   LIABILITY. 

1.  As  regards  contracts. 

No  several  liability  on  contracts  binding  the  firm. — An  agent  who 
contracts  for  a  known  principal  is  not  liable  to  be  himself  sued  on 
the  contract  into  which  he  has  avowedly  entered  only  as  agent. 
Consequently,  a  partner  who  enters  into  a  contract  on  behalf  of  his 

307 


192* 


NATURE   OF    LIABILITY 


[book    II., 


firm  is  not  liable  on  that  contract  except  as  one  of  the  firm  ;  in 
other  words,  the  contract  is  not  binding  on  him  separately,  but  only 
on  him  and  his  copartners  jointly,  (a)  One  partner  may  render 
himself  separately  liable  by  holding  himself  out  as  the  only  mem- 
ber of  the  firm,  (6)  or  by  so  framing  the  contract  as  to  bind  him- 
self separately  from  his  copartners  as  well  as  jointly  with  them  ;  (c) 
but  unless  there  are  some  special  circumstances  of  this  sort,  a  con- 
tract which  is  binding  on  the  firm  is  binding  on  all  (cZ)  *the  r^.Qp 
partners  jointly  and  on  none  of  them  severally.  There  is 
no  difference  in  this  respect  between  law  and  equity,  (e)  except 
that  which  arises  from  the  equitable  jurisdiction  to  rectify  mistakes 
and  from  the  principles  adopted  by  courts  of  equity  in  administer- 
ing the  estates  of  deceased  partners.  (/)  These  principles  will  be 
investigated  at  a  later  period  in  book  IV.,  ch.  3. 1 


(a)  See  Ex  parte  Buckley,  14  Mees.  & 
W.  469;  Ee  Clarke,  De  G.  153;  Ex 
parte  Wilson,  3  Mont.,  D.  &  D.  57. 

(6)  Bonfield  v.  Smith,  12  Mees.  &  W. 
405 ;  De  Mautort  v.  Saunders,  1  B.  & 
Ad.  398. 

(c)  See  ante  p.  *179,  et  seq.,  and  Ex 
parte  Harding,  12  Ch.  D.  557  ;  Higgins 
V.  Senior,  8  Mees.  &  W.  834 ;  Ex  parte 
Wilson,  3  Mont.,  D.  &  D.  57. 

(d)  Not  including  dormant  partners. 
Beckham  v.  Drake,  9  Mees.  &  W.  79 ; 
Brett  V.  Beckwith,  3  Jur.  (N.  S.)  31, 
M.  K. 

(e)  Kendall  v.  Hamilton,  4  A  pp.  Cas. 
504,  and  3  C.  P.  D.  403. 

(/)  lb.,  where  the  whole  law  on  this 
subject  will  be  found  carefully  exam- 
ined. 

1.  No  several  liability  on  contracts 
binding  on  the  hrm. — The  principle  is, 
that  a  contract  made  by  copartners  is 
several  as  well  as  joint,  and  the  assumpsit 
is  made  by  all  and  by  each.  It  is  obliga- 
tory on  all,  and  on  each  of  the  partners. 
Barry  v.  Foyles,  1  Pet.  (U.  S.)  311. 
Compare  Woodworth  v.  Spafford,  2  Mc- 
Lean (U.  S.)  168. 


Where,  on  dissolution,  a  portion  of  th& 
members  of  the  firm  continued  the  busi- 
ness, and  the  plaintiff,  who  had  occupied 
the  position  of  bookkeeper  to  the  old 
firm,  kept  on  in  that  position  with  the 
new  firm,  and  carried  a  balance  due  him 
for  services  into  his  account  with  the 
new  firm,  which  account,  as  thus  made 
up,  the  new  firm  afterwards  paid,  with- 
out knowing  that  it  contained  anything 
due  on  the  part  of  the  old  firm,  it  was 
held  that  plaintifi'  was  entitled  to  retain 
the  money  so  received,  as  the  members 
of  the  new  firm  were  personally  liable 
for  the  debts  of  the  old  one.  Strong  v. 
Niles,  45  Conn.  52. 

In  an  action  against  the  members  of 
an  unincorporated  association,  sued  as 
partners,  the  court  will  not  delay  the 
relief  to  which  the  plaintiff  is  entitled 
as  against  all  the  defendants,  pending  an 
inquiry  instituted  by  the  defendants  to 
ascertain  which  of  them,  as  between 
themselves,  is  primarily  liable  for  the 
debt.  Manning  v.  Gasharie,  27  Ind. 
399. 

A  partnership  between  four  was  dis- 
solved bv  the  death  of  one^  and  letters  of 


308 


€HAP.  II.,  §  I.]  IX    RESPECT    OF    CONTRACTS.  193* 

Partnership  debts  not  several  as  welt  as  joint. — It  has  often  been 
said  that  in  equity  partnersliip  debts  are  separate  as  well  as  joint ; 
but  this  proposition  is  inaccurate  and  misleading.  It  is  true  that  a 
creditor  of  a  partnership  can  obtain  payment  of  his  debt  out  of  the 
estate  of  a  deceased  partner,  (g)  but  the  judgment  which  such  a 
creditor  obtains  is  quite  different  from  that  which  a  separate  creditor 
is  entitled  to,  (/i)  and  it  is  a  mistake  to  say  that  the  joint  creditor  of 
the  firm  is  also  in  equity  a  separate  creditor  of  the  deceased  part- 
ner, (i)  In  bankruptcy  the  joint  debts  of  a  firm  are  never  treated 
as  joint  and  several,  and  yet  in  bankruptcy  equitable  as  well  as  legal 
principles  are  always  recognized.  2 


administration  on  his  estate  were  taken 
out  by  a  surviving  member.  The  sur- 
vivors, having  formed  a  new  firm,  took 
the  stock,  and  each  gave  his  note  for  one- 
third  of  said  stock,  at  an  appraised  vahie, 
payable  to  the  firm.  Held,  tliat  the  three 
were  chargeable  jointly  for  the  whole 
Talue  of  the  stock.  Washburn  v.  Good- 
man, 17  Pick.  (Mass.)  519. 

A  plaintifi"  suing  a  firm  must  show  a 
joint  contract  or  joint  promise,  express 
or  implied.  Sager  v.  Tupper,  .38  Mich. 
258. 

In  Mississippi,  all  partnership  con- 
tracts are  declared  by  statute  to  be  joint 
and  several ;  therefore,  in  a  suit  against 
one  partner,  counts  on  a  firm  debt  for 
which  he  is  severally  liable,  may  be 
joined  with  counts  on  an  individual 
debt,  but  if  the  creditor  treat  the  con- 
tract as  joint,  by  suing  all  the  partners, 
he  must  prove  a  joint  contract  as  alleged, 
and  cannot  amend  by  discontinuing  as 
to  part  of  the  defendants  and  joining  a 
count  on  a  contract  by  one  only,  in  order 
to  meet  the  proof  which  is  of  such  a  con- 
tract. Miller  v.  Northern  Bank,  &c.,  34 
Miss.  412. 

A  suit  was  brought  against  two  as 
partners ;  both  were  served  with  pro- 
cess ;  both  appeared  and  pleaded  joint- 
ly ;  notice  to  produce  a  book  containing 


the  contract  on  which  the  action  was 
brought  was  given  to  both,  and  it  was 
produced.  The  contract  was  in  the  name 
of  the  firm,  and  was  proved  to  be  in  the 
handwriting  of  one  of  the  defendants. 
Upon  the  trial,  an  admission  was  made 
by  the  counsel  acting  for  both  defend- 
ants that  a  certain  amount  of  labor  was 
done  by  plaintiff  for  defendants,  and 
certain  payments  made  to  him.  Held, 
that  the  evidence  was  sufficient  to 
establish  a  joint  liability  on  the  part  of 
the  defendants.  Balliett  v.  Fink,  28  Pa. 
St.  266. 

The  liability  of  a  partner  is  to  be  de- 
termined by  the  law  of  the  place  where 
the  partnership  is  carried  on,  and  not 
where  the  debt  was  incurred.  Hastings 
V.  Hopkinson,  28  Vt.  108. 

(g)  See  the  next  note.  Hoare  v.  Con- 
tencin,  1  Bro.  C.  C.  27,  shows  that  this 
was  not  always  the  case. 

(A)  See  Re  Barnard,  32  Ch.  D.  447 ; 
Hills  V.  M'Rae,  9  Hare  297  ;  Ee  Hodg- 
son, 31  Ch.  D.  177  ;  Ee  McCrae,  25  Id. 
16,  and  post,  book  IV.,  ch.  3. 

{i)  Except  in  partnership  cases  the 
liability  in  equity  on  a  joint  contract  is 
the  same  as  at  law.  Other  v.  Iveson,  3 
Drew.  177  ;  Jones  v.  Beach,  2  De  G.,  M. 
&  G.  886  ;  Eawstone  v.  Parr,  3  Euss.  539. 

2.  Partnership  debts  not  several  as 


309 


193*  NATURE   OF   LIABILITY  [bOOK   II., 

In  Kendall  v.  Hamilton  (Jc)  two  out  of  three  partners  were  sued 
for  a  partnership  debt,  and  judgment  was  recovered  against  them. 
Afterwards  the  plaintiffs,  having  discovered  that  the  defendant 
Hamilton  was  a  member  of  the  firm,  sued  him  for  the  same  debt, 
which  was  still  unsatisfied.  But  it  was  held  that  the  action  could 
not  be  maintained,  for  the  liability  of  Hamilton  was  a  joint  liability 
only,  and  tlic  judgment  obtained  against  his  copartners  was  a  bar 
to  another  action  against  him. 

Efed  of  judgment  againd  some  partners. — This  case  would  have 
presented  no  difficulty  before  the  passing  of  the  Judicature  acts, 
but  it  was  contended  that  Hamilton's  liability  was,  in  equity,  sev- 
eral as  well  as  joint,  and  that  since  the  passing  of  the  Judicature 
acts  he  could  be  sued  ^notwithstanding  the  judgment  re- 
■^  covered  against  his  copartners.  This  construction,  how- 
ever, was  decided  to  be  unsound,  and  it  did  not  prevail.  Before  the 
passing  of  the  Judicature  acts,  the  Court  of  Chancery  would  have 
had  no  jurisdiction  in  such  a  case  as  Kendall  v.  Hamilton,  and 
there  were  no  circumstances  importing  equitable  considerations 
into  it. 

Effect  of  judgment  against  surviving  partners. — It  must  not,  how- 
well  as  joint. — A  debt  due  from  part-  admitted  in  part  the  sale  and  delivery 
ners,  in  a  suit  against  both,  may  be  re-  and  indebtedness  alleged.  The  plain- 
covered  against  either,  and  either  may  tiifs,  in  reply,  denied  the  statement  in 
be  compelled  to  pay  the  whole.  Al-  A.'s  answer,  and  moved  for  judgment 
though  due  from  the  company,  it  is  also  on  the  pleadings.  Held,  that  the  mo- 
due  from  each  member  of  the  company^  tion  was  rightly  denied,  and  judgment 
and  the  claim  of  the  creditor  for  its  of  dismissal  properly  rendered.  Such 
satisfaction  extends  to  the  whole  property  a  state  of  the  pleadings  furnishes  no 
of  each  member  of  the  firm,  as  well  as  basis  for  a  several  judgment  against 
tothe  joint  property  of  the  firm.  Tucker  either  of  the  defendants.  Beatty  v. 
V.  Oxley,  5  Cranch  (U.  S.)  34  ;  reversing  Ambs,  11  Minn.  331. 
S.  C.   1  Cranch  C.  C.  419.  I"  an  action  against  several  as  part- 

In  an  action  against  A.  &  W.,  former  ners,  although  but  one  of  the  defendants 
partners,  on  an  alleged  joint  indebted-  be  brought  into  court,  if  he  appears  and 
ness  for  goods  sold  and  delivered,  A.'s  pleads  the  general  issue,  the  plaintiff  is 
answer  denied  the  sale  and  delivery,  but  not  entitled  to  recover,  unless  he  estab- 
admitted  that  the  goods  were  left  with  lishes  a  joint  liability  of  the  defendants, 
the  defendants  for  sale  on  commission,  Halliday  i;.  McDougal,  20  Wend.  (N.  Y.) 
and  that  sales  of  the  same  were  made  to  81  ;  S.  C,  22  Id.  264. 
a  certain  amount,  for  which  an  indebted-  {k)  4  App.  Cas.  504,  and  3  C.  P.  D. 
ness   was   admitted  ;    and    W.'s   answer    403.     This  case  arose  after  the  Jud.  acts 

310 


CHAP.  II.,  §  I.]  IX    EESPECT   OF    CONTRACTS.  194* 

ever,  be  inferred  from  Kendall  v.  Hamilton  that  if  a  creditor  of  a 
firm  sues  the  surviving  partners  and  recovers  judgment  against 
them  he  cannot  obtain  payment  of  his  demand  out  of  the  assets  of 
a  deceased  member  of  the  firm.  The  contrary  is  well  established 
by  a  long  series  of  cases  which  are  in  no  way  affected  by  Kendall 
V.  Hamilton. 

Equitable  doctrine  illustrated. — It  has  long  been  held  that  a  cred- 
itor of  a  firm  is  himself  entitled  to  obtain  payment  from  the  estate 
of  the  deceased,  even  although  he  may  have  taken  as  a  security  for 
his  debt  a  bond  or  covenant  binding  the  partners  jointly,  il) 

Thus,  in  Bishop  v.  Church,  (m)  two  partners  borrowed  £2000, 
for  which  they  afterwards  gave  their  joint  bond.  One  of  them  then 
died  and  the  other  became  bankrupt.  A  bill  was  filed  by  the 
creditor  for  payment  of  the  bond  out  of  the  estate  of  the  deceased 
partner,  and  it  was  held  that  his  estate  continued  liable  notwith- 
standing that  it  was  discharged  at  law,  the  bond  being  joint,  and 
not  joint  and  several.  In  this  case  it  was  also  held  that  the  bond 
ought  to  be  treated  as  joint  and  several  so  as  to  make  the  estate  of 
the  deceased  partner  liable  as  for  a  specialty  debt  and  not  as  for  a 
simple  contract  debt,  as  would  have  been  the  case  without  the 
bond,  in) 

In  Beresford  v.  Browning  (o)  four  partners  agreed  that  on  the 
death  of  any  of  them  the  survivors  should  not  be  bound  to 
*pay  out  his  capital  at  once,  but  should  pay  it  by  certain  r^-,QP 
instalments,  as  ascertained  at  the  last  preceding  stock-taking. 
The  agreement  did  not  purport  to  bind  the  survivors  jointly  and 
severally.  But  it  was  held  that  even  if  they  were  at  law  bound 
only  jointly,  they  were  liable  in  equity  severally  as  well  as  jointly, 

came  into  operation.  between  them  and  otlier  partnerships. 

(/)  See,  in  addition  to  the  cases  cited        (m)  2  Ves.  Sr.  100  and  371.     Simpson 

in  the  next  few  notes,  Primrose  v.  Brom-  v.  Vaughan,  2  Atk.  31,  is  a  very  similar 

ley,  1  Atk.  90 ;  Darwent  v.  Walton,  2  case. 

Atk.  510;   Lane  v.  Williams,  2  Vern.        (?i)  Tlie  following  cases   are   to   the 

292;  and  see  Sleech's  Case,  1  Mer.  539;  same  effect  as  Bishop  v.  Church,  viz.: 

Devaynes  v.  Noble,  2  Russ.  &  M.  495,  and  Simpson  v.  Vaughan,  2  Atk.  31 ;  Thomas 

the  cases  there  commented  on ;  Smith  v.  v.  Frazer,  3  Ves.  399  ;  Burn  v.  Burn,  Id. 

Smith,  3  Giff.  263.     The  cases  only  re-  573 ;    Orr    v.   Chase,   1   Mer.   729,   ap- 

late  to  mercantile  partnerships,  but  quaere  pendix. 
if  there  is  any  difference  in  this  respect        (o)  20  Eq.  564,  and  1  Ch.  D.  30. 

311 


195*  NATURE    OF    IJABILITY  [bOOK   II., 

and  that  the  executor  of  the  partner  first  dying  was  entitled  to  be 
paid  the  amount  due  to  him  out  of  the  estate  of  a  surviving  part- 
ner, who  had  himself  died,  and  was  not  restricted  to  suing  the  ulti- 
mate surviving  partner. 

Effect  of  judgment. — Nor,  if  the  creditor  sues  the  surviving  part- 
ners and  obtains  judgment  against  them,  will  he  be  therefore  pre- 
cluded from  proceeding  to  enforce  his  original  claim  against  the 
estate  of  the  deceased  partner,  (p)  In  the  case  here  supposed  the 
judgment  does  not  affect  his  estate.  So,  if  the  creditor  of  the  firm 
first  seeks  payment  out  of  the  estate  of  a  deceased  partner,  he  is 
not  precluded  from  afterwards  suing  the  surviving  partner,  (g) 

Effect  of  rule  on  creditors  inter  se. — The  doctrine  acted  on  in 
Bishop  V.  Church  and  other  cases  of  the  same  sort  is  applied,  not 
only  for  the  benefit  of  creditors  against  the  partners  and  their  rep- 
resentatives, but  also  as  between  competing  creditors.  This  was 
settled  in  Burn  v.  Burn,  (r)  In  that  case,  partners  being  indebted 
to  a  large  amount,  gave  to  their  creditor  a  joint  bond ;  one  of  the 
partners  died,  the  others  afterwards  became  insolvent,  and  a  bill 
was  filed  by  the  bond  creditor  for  payment  out  of  the  estate  of  the 
deceased  partner.  Two  questions  then  arose  between  the  plaintiff 
and  the  simple  contract  creditors  of  the  deceased  partner,  viz.,  first, 
whether  the  plaintiff  could  rank  as  a  creditor  at  all  against  the 
assets  of  the  deceased ;  and,  secondly,  whether,  if  he  could,  he 
should  rank  as  a  specialty  or  only  as  a  simple  contract  creditor. 
The  court  decided  both  questions  in  favor  of  the  plaintiff,  and  held 
that  he  was  entitled  to  rank  as  a  specialty  creditor,  although  the 
consequence  was  that  after  satisfying  his  demand,  little  remained  for 
payment  of  the  other  creditors. 
*iQft1  *  Oases  where  the  equitable  and  legal  liabilities  are  the 
-'  sa7ne. — But  even  in  administering  the  estate  of  a  deceased 
partner  it  must  not  be  supposed  that  every  joint  debt  contracted  by 
the  firm  is  payable  out  of  his  assets.  It  is  a  question  of  intention 
on  the  part  of  the  firm  and  on  the  part  of  those  with  whom  it 
deals.     If,  therefore,  partners  enter  into  a  contract  binding  them- 

ip)  Liverpool     Borough      Bank     v.        (g)  Ee  Hodgson,  31  Ch.  D.  177. 
Walker,  4  De  G.  »&  J.  24;  Jacomb  v.        (r)  3   Ves.   573,   and    see    Simms   v. 
Harwood,  2  Ves.  Sr.  265,  Barry,  there  cited. 

312 


CHAP.  II.,  §  I.]  IN   RESPECT   OF   CONTRACTS.  196* 

selves  jointly  and  not  severally,  and  if  such  contract  is  not  a  mere 
security  for  the  payment  of  a  debt,  or  for  the  performance  of  a  joint 
and  several  obligation,  and  if  it  has  not  been  made  joint  in  form  by 
mistake,  the  effect  of  the  contract  will  be,  in  equity  as  in  law,  to  im- 
pose a  joint  obligation  and  no  other,  (s) 

A  leading  case  on  this  head  is  Sumner  v.  Powell,  [t)  There,  one 
of  a  firm  of  partners  died,  the  firm  being  at  the  time  of  his  death 
liable  for  a  breach  of  trust  committed  by  one  of  its  members.  A 
new  partner  was  admitted  into  the  firm  and  a  deed  was  executed 
between  the  executors  of  the  deceased  partner  and  the  surviving 
partners  and  the  new  partner,  whereby,  in  consideration  of  certain 
payments  by  the  executors  and  of  a  release  by  them  of  all  demands, 
the  surviving  partners  and  the  new  partner  covenanted  jointly  to 
indemnify  the  executors  from  the  debts  and  liabilities  of  the  old 
firm.  A  suit  was  afterwards  instituted  in  respect  of  the  breach  of 
trust,  and  the  executors  were  ordered  to  make  good  the  same  out  of 
the  assets  of  their  testator.  The  executors  then  filed  a  bill  to  be 
indemnified  out  of  the  estate  of  the  new  partner,  and  contended 
that  the  covenant  into  which  he  had  entered,  though  joint  in  form, 
ought  to  be  considered  as  joint  and  several.  But  it  was  held  other- 
wise, for  the  obligation  of  the  new  partner  to  indemnify  the  plaintiffs 
existed  only  by  virtue  of  his  covenant,  and  the  extent  of  the  obliga- 
tion could  therefore  be  measured  only  by  the  words  of  such  covenant. 

Again,  in  Clarke  v.  Bickers,  (w)  a  lease  w^as  made  to  two  partners 
jointly  of  lands  wanted  by  them  for  partnership  purposes.  The 
demise  and  lessees'  covenants  were  all  joint.  *After  the  p^,Q^, 
death  of  one  of  the  partners  his  executors  were  sued  in  *- 
equity  in  respect  of  various  breaches  of  covenant,  and  it  was  con- 
tended that  the  covenants  ought  to  be  treated  as  joint  and  several. 
But  it  was  held  on  demurrer  that  no  equity  arose  to  the  lessor  from 
the  fact  that  the  lessees  were  copartners  ;  the  lessor  determined  for 
himself  how  his  leases  should  be  granted.  The  demurrer  was  con- 
sequently allowed. 

(s)  See,  in  addition  to  the  cases  no-  177  ;  Rawstone  v.  Parr,  3  Euss.  424,  539. 

ticed  in  the  text,  Richardson  v.  Horton,  {t)  2  Mer.  30 ;    affirmed   on   appeal, 

6  Beav.  185;  Jones  v.  Beach,  2  De  G.,  Turn.  &  R.  423. 

M.  &  G.  886 ;  Other  v.  Iveson,  3  Drew.  {u)  14  Sim.  639. 

313 


197*  NATURE   OF    LIABILITY  [bOOK    II.^ 

The  same  doctrine  was  acted  on  and  even  carried  further  in  Wil- 
mer  v.  Currey.  (a;)  In  that  case  three  partners  dissolved  partner- 
ship, one  of  them,  the  plaintiff,  retiring.  By  a  deed  made  between 
the  three  partners,  the  plaintiff  assigned  all  his  share  and  interest 
to  the  other  two,  and  they  jointly  covenanted  to  pay  the  debts  of  the 
firm,  and  to  indemnify  the  plaintiff  therefrom  and  to  pay  the 
plaintiff  certain  snms  of  money.  One  of  the  two  continuing  part- 
ners having  died  and  the  covenants  not  having  been  performed,  the 
plaintiff  filed  his  bill  against  the  surviving  partner  and  the  execu- 
tors of  the  deceased  partner  in  order  to  obtain  the  sums  remaining 
due  to  him  and  to  have  the  unliquidated  partnership  debts  paid. 
But  it  was  held  on  demurrer  that  the  plaintiff  had  no  equity  against 
the  estate  of  the  deceased  partner ;  for  although  that  partner  was, 
irrespectively  of  the  deed,  liable  to  contribute  towards  payment  of  the 
partnership  debts,  that  was  different  from  the  obligation  which  arose 
by  virtue  of  the  covenant  of  which  the  plaintiff  sought  the  benefit. 
It  is,  however,  difficult  to  reconcile  this  case  with  Beresford  v. 
Browning,  {y) 

Joint  liability  in  cases  of  holding  out. — A  creditor  who  alleges 
that  A,  B  and  C  are  his  debtors  can,  it  is  apprehended,  prove  his 
case  by  showing  that  one  of  them  contracted  on  behalf  of  all  three 
and  that  the  other  two  are  estopped  from  denying  his  authority  to 
do  so.  Cases  in  which  persons  have  been  held  jointly  liable  on  this 
principle  are  to  be  found  in  the  books,  {z)  The  case  of  Scarf  v. 
Jardine,  (a)  which  seems  at  first  sight  to  throw  some  doubt  on  this 
doctrine,  is  really  not  opposed  to  it.  In  that  case  S.  &  R.  carried 
on  business  in  partnership  under  the  name  of  E,.  &  Co.  "^S. 
-J  retired.  R.  continued  the  business  in  the  old  name,  and 
took  another  person  into  partnership  with  him.  J.  was  a  customer 
of  the  old  firm  ;  he  had  no  notice  of  S.'s  retirement,  and  he  con- 
tinued to  deal  with  and  became  a  creditor  of  the  new  firm.  J.  then 
was  made  acquainted  with  the  fact  that  S.  had  retired ;  but  J.  nev- 
ertheless sued  the  new  firm  for  their  debt  to  him,  and  on  their  bank- 

(x)  2  De  G.  &  S.  347.  (z)  Waugh  v.  Carver,  1  H.  Bl.  235, 

iy)  The  Court  of   Appeal,  however,  and  other  cases  of  holding  out,  ante  p. 

thought  the  two  might  be  distinguished.  *40,  el  seq. 

See  1  Ch.  D.  30.  (a)  7  App.  Cas.  345. 

31-i 


CHAP.  II.,  §  I.]  IN    RESPECT   OF    CONTRACTS.  198* 

ruptcy  he  proved  against  their  estate.  He  then  sought  to  recover 
the  same  debt  against  S. ;  but  it  was  decided  that  S.  was  not  liable. 
It  was  held  that  J.  had  the  option  of  suing  the  new  firm  or  S.,  but 
that  J.  could  not  sue  the  new  firm  and  S.  jointly,  and  that  having 
elected  to  sue  the  new  firm,  he  could  not  afterwards  sue  S.,  who  was 
not  in  fact  a  member  of  it.  The  importance  of  this  case  turns  on 
the  grounds  on  which  it  was  held  that  J.  could  not  have  sued  S. 
jointly  with  the  members  of  the  new  firm.  The  reason  why  he 
could  not  have  done  so  was  that  J.  did  not  in  fact  contract  with  the 
new  firm  upon  the  faith  that  S.  was  a  member  of  it.  (6)  If  it  had 
been  proved  that  J.  had  so  contracted,  he  could,  it  is  apprehended, 
have  sued  S.  and  the  other  members  of  the  new  firm,  and  have 
proved  S.  to  have  been  a  partner  by  estoppel. 

2.  As  regards  torts  and  frauds. 

Torts  create  joint  and  several  liabilities. — For  torts  imputable  to 
a  firm,  all  the  partners  are  liable  jointly  and  severally,  (d)  To  thi& 
general  rule  an  exception  occurs  where  an  action  e.^;  delicto  is  brought 
against  several  persons  in  respect  of  their  ownership  in  land,  for 
then  they  are  liable  jointly,  and  not  jointly  and  severally,  (e)  3 

Distinction  between  torts  and  breaches  of  contract. — Although  for 
general  purposes  it  may  be  convenient  to  distribute  acts  and  for- 
bearances which  give  rise  to  obligations  under  the  heads  "Breach 
of  Contract"  and  "Tort,"  it  would  not  be  difficult  to  show  the  im- 

(6)  See  7   App.  Cas.  350,  per   Lord  as  tort  feasors,  as  upon  an  unauthorized 

Selborne,  and  357,  358,  per  Lord  Black-  disposal  thereof.     Their   liability  rests 

burn.  upon  contract,  not  upon  tort,  and  is  ne- 

(d)  Mitchell  v.  Tarbutt,  5  T.  E.  649 ;  cessarily  joint,   not  several.     Harris  v. 
1  Wms.  Saund.  291  /and  jr;  Com.  Dig.,  Schultz,  40  Barb.  (N.  Y.)  315. 
"Abatement,"  F,  8.  An  action  on  the  case  for  negligence 

(e)  See  1  "Wms.  Saund.  291  /  and  g.  occasioning  the  loss  or  destruction  of  a 
3.  Torts  create  joint  and  several  slave  hired  by  plaintiff  to  a  copartner- 
liabilities. — Where  partners  assign  prop-  ship,  may  be  maintained  against  one  of 
erty  to  a  creditor  as  security  for  the  debt,  the  members  of  the  firm,  without  join- 
and  he  intrusts  such  property  to  the  ing  the  other  partners.  So,  if  the  neg- 
partners  to  sell,  as  his  agents,  and  to  pay  ligence  be  that  of  an  agent  of  the  co- 
over  the  proceeds  to  him,  they  do  not  partnership.  White  v.  Smith,  12  Rich, 
become  liable,  upon  sale  of  the  property,  (S.  C.)  595. 

315 


199*  NATURE   OF    I.IABILITY  [bOOK    II., 

possibility  of  always  distinguishing  between  the  two.  (/)     And  yet 

if  a  breach  of  a  contract  binding  *on  the  firm  imposes  a  ^ 

.   .  r*199 

joint  liability  only  on  its  living  members  (as  to  which,  see  '- 

<inte  pp.  *192,  *193),  whilst  a  tort  imputable  to  the  firm  imposes  a 
joint  and  several  liability,  the  importance  of  being  able  accurately 
to  distinguish  between  a  breach  of  contract  and  a  tort  becomes 
apparent.  The  difficulty,  however,  of  doing  so  is  increased  by 
the  doctrine  that  there  are  cases  in  which  the  same  breach  of  an 
obligation  may  be  regarded  from  two  different  points  of  view, 
and  may,  at  the  option  of  the  person  injured,  be  made  the  founda- 
tion either  of  an  action  ex  contractu  or  of  an  action  ex  delicto,  [g) 
Suppose,  for  example,  that  property  is  entrusted  to  a  firm  of 
bankers  for  the  purpose  of  sale  and  investment,  and  that  some 
member  of  the  banking  firm  misapplies  the  property  so  entrusted. 
This  breach  of  duty  is  a  breach  of  the  contract  which  was  tacitly, 
if  not  expressly,  entered  into  by  the  bankers  when  they  received 
the  property.  But  the  misapplication  of  the  property  is  a  wrong 
independently  of  any  contract,  amounting  in  effect  to  a  conver- 
sion or  destruction  of  that  which  belonged  to  the  customer. 

Breaches  of  trust  impose  joint  and  several  liabilities. — In  equity 
the  misapplication  of  the  money  is  a  breach  of  trust  and  imposes  a 
joint  and  several  liability  on  all  the  partners,  on  the  ground  that 
each  partner  is  bound  to  see  to  the  proper  application  of  what  is 
entrusted  to  the  firm,  (h)  In  such  cases  as  these  the  several  liability 
of  each  partner  to  the  creditors  of  the  firm  is  not  affected  by  the 
circumstance  that  the  act  imposing  such  liability  was  done  by  one 
only  of  the  members  of  the  firm  without  the  knowledge  or  consent 
and  in  fraud  of  the  others.  If  the  act  in  question  imposes  a  lia- 
bility which,  upon  the  principles  of  agency,  can  be  imputed  to  the 
firm,  each  member  thereof  is  in  equity  severally  liable  for  such  act 
just  as  much  as  if  there  had  been  no  fraud  in  the  case ;  (i)  and  it  is 

(/)  See  Pollock  on  Torts,  ch.  13.  (h)  See  Re  Oxford  Benefit  Building 

{g)  See,   on    this    subject,   Brown   ■;;.  Soc,  35  Ch.  D.  502;  Ex  parte  Adamson, 

Boorman,  11  CI.  &  F.  1,  and  the  cases  8  Ch.  D.  807;  and  ante  p.  *161  note  (/). 

there  referred  to.     See,  also,  Bryant  v.  (i)  See  Ex  parte  Adamson,  8  Ch.  D. 

Herbert,  3  C.  P.   D.  389;    Fleming  v.  807;  Vulliamy  v.  Noble,  3  Mer.   619; 

Manchester,  Sheffield  and  Lincolnshire  Clayton's  Case,   1    Mer.   576 ;    Warde's 

Rail.  Co.,  4  Q.  B.  D.  81.  Case,  Id.  624. 

316 


CHAP.  II.,  §  II.]  IX    RESPECT   OF   TORTS.  200* 

well  established  in  equity  that  a  breach  of  trust  which  is  imputable 
to  several  *persons  imposes  upon  them  a  liability  which  is 
-'  both  joint  and  several,  {k) 
The  effect  of  the  Judicature  acts  on  this  subject  has  not  yet  been 
judicially  determined,  but  probably  breaches  of  contract  which  are 
also  breaches  of  trust  will  be  held  to  impose  several  as  well  as  joint 
liabilities  both  at  law  and  in  equity.     In  Ex  parte  Adamson  {I)  a 
partnership  debt  contracted  by  fraud  was  held  to  be  joint  and  sev- 
eral, and  to  be  provable  in  bankruptcy  against  the  joint  estate  of  the 
firm  or  against  the  separate  estates  of  its  members  at  the  option  of 
the  creditor. 


SECTION    II. EXTENT   OF   LIABILITY. 

Extent  of  partner's  liability  at  common  law. — By  the  common  law 
of  this  country,  every  member  of  an  ordinary  partnership  is  liable 
to  the  utmost  farthing  of  his  property  for  the  debts  and  engage- 
ments of  the  firm.  The  law,  ignoring  the  firm  as  anything  distinct 
from  the  persons  composing  it,  treats  the  debts  and  engagements  of 
the  firm  as  the  debts  and  engagements  of  the  partners,  and  holds 
each  partner  liable  for  them  accordingly.  Moreover,  if  judgment 
is  obtained  against  the  firm  for  a  debt  owing  by  it,  the  judgment 
creditor  is  under  no  obligation  to  levy  execution  against  the  prop- 
erty of  the  firm  before  having  recourse  to  the  separate  property  of 
the  partners;  nor  is  he  under  any  obligation  to  levy  execution 
against  all  the  partners  ratably,  but  he  may  select  any  one  or  more 
of  them  and  levy  execution  upon  him  or  them  until  the  judgment 
is  satisfied,  leaving  all  questions  of  contribution  to  be  settled  after- 
wards between  the  partners  themselves,  (m) 

(k)  Re  National  Funds  Assur.  Co.,  10  Foster,  L.  R.,  7  H.  L.  318,  as  to  liability 
Ch.  D.  118.  See,  also,  the  cases  in  the  for  profits  arising  from  breaches  of  trust, 
last  two  notes,  and  Devaynes  v.  Noble,  (l)  8  Ch.  D.  807,  per  James  and  Bag- 
Sleech's  case,  1  Mer.  563 ;  Baring's  gaily,  L.  JJ.,  Lord  Bramwell  dissent- 
Case,  Id.  614;  Brydges  v.  Branfill,  12  ing.  See,  as  to  breaches  of  trust.  Ex 
Sim.  369;  Wilson  v.  Moore,  1  Myl.  &  parte  Sheppard,  19  Q.  B.  D.  84;  and 
K.  127,  337.     Compare,  however,  Parker  ante  note  (A). 

V.  McKenna,  10   Ch.  123,  and  Vyse  v.  (m)  See  per  De  Grey,  C.  J.,  in  Abbott 

317 


201*  KXTEXT   OF    LIABILITY.  [bOOK    IL, 

^Attciiijjts  to  limit  liability. — Various  attempts  have  been  p^„^^ 
made  from  time  to  time  to  form  partnerships  without  expos-  ^ 
ing  their  members  to  ruin  in  tlie  event  of  loss.  But  the  only  effectual 
method  of  accomplishing  this  object  is  to  stipulate  with  each  creditor 
that  he  shall  only  be  paid  out  of  the  funds  of  the  partnership,  and  that 
he  shall  not  be  entitled  to  require  the  individual  partners  to  pay  more 
than  a  certain  amount  of  those  funds.  Such  stipulations,  how- 
ever, are  nev^er  made  in  practice  except  where  the  partners  are 
numerous,  and  in  modern  times  they  are  practically  confined  to  in- 
surance and  other  Companies  formed  before  the  passing  of  the  Com- 
panies act,  1862.  The  cases  on  this  subject  will  be  found  collected 
in  the  volume  relating  to  companies.  (?i)  The  statute  under  which 
a  person  may  share  profits  without  incurring  the  liability  of  a  part- 
ner has  been  already  alluded  to.  (o)  4 

V.  Smith,  2  W.  Bl.  949,  and  Wooley  v.  parties  in  solido  will  not  be  disturbed  on 
Kelley,  1  Barn.  &  C.  68 ;  Com.  Dig.,  the  ground  that  a  joint  judgment  was 
*'  Execution,"  H.  See  further  on  this  claimed  in  the  petition.  Taylor  v.  Han- 
subject,  infra,  ch.  3,  ^  3.  cock,  14  La.  Ann.  693. 

(n)  The  leading  cases  on  this  subject  Where  a  suit  is  brought  against  per- 
are  Halket  r.  Merchant  Traders' Loan  sons  bound  jointly  and  severally  accord- 
Assoc,  13  Q.  B.  960 ;  Hassell  v.  Same,  ing  to  law,  as  commercial  partners,  a 
4  Ex.  525 ;  Hallett  v.  Dowdall,  18  Q.  B.  judgment  rendered  against  them  carries 
2;  Durham's  Case,  4  Kay  &  J.  517 ;  Re  solidarity  with  it,  even  when  not  ex- 
Athenaeum  Soc,  Johns.  80,  and  3  De  G.  pressed  in  it.  Bell  v.  Massey,  14  La. 
&  J.  660.  Ann.  831. 

(o)  28  and  29  Vict.,  c.  86,  ante  book  I.,  Where  it  appears  that  the  two  indi- 

■ch.  1,  §  2.  vidual    signers  of  a  merely  joint   note 

4.  Extent  of  partner's    liability   at  were,  at  the  time,  commercial  partners, 

common  law. — Tiie  liability  of  a  part-  and  that  the  note  was  given  for  money 

ner  to  a  third  person  is  not  increased  by  borrowed  for  and  used  by  the  firm,  each 

the  fact  that  an  individual  debt  of  his  maker  is  liable   in  solido.     Mitchel  v. 

has  been  assumed  by  the  partnership  of  Darmond,  30  La.  Ann.  396. 

which    he   is   a  member.     Bogereau  v.  Partners  in  a  plantation   are  jointly 

Gu^riuger,  14  La.  Ann.  478.  bound  each  for  one-half   of  all   debts 

A  law  partnership  is  an  ordinary  one,  contracted  by  them  for  the  benefit  of  the 

and  the  partners  are  bound  jointly,  and  firm.     Dupre  v.  Bods,  33  La.  Ann.  495. 

not  in   solido.      Dyer   v.   Drew,   14  La.  Where  two  firms  agree  to  pack  pork 

Ann.  657  ;  Jones  v.  Caperton,  15  Id.  475.  on  joint  account,  this  will  not  efiect  the 

When  there  is  a  prayer  in  the  peti-  consolidation  of  the  firms  or  make  either 

tion  for  general  relief,  and  the  partner-  liable   for    the    previous   debts   of    the 

ship  sued  is  alleged  to  be  a  commercial  other.      Header   v,   Hughes,   14    Bush 

one,  a  judgment   rendered  against  the  (Ky.)  652. 

318 


€HAP.  II.,  §  III.]         DURATION    OF    LIABILITY.  201' 


SECTION   III. — DURATION  OF   LIABILITY. 

In  a  preceding  chapter  it  was  shown  that  every  member  of  an 
ordinary  partnership  is  the  general  agent  of  the  firm  for  the  pur- 
pose of  carrying  on  its  business  in  the  ordinary  way.  In  the 
present  section  it  is  proposed  to  ascertain  the  duration  of  such 
agency,  or,  in  other  words,  when  it  begins  and  when  it  ends.  The 
mode  whereby  a  partner  becomes  discharged  from  liabilities  in- 
curred by  him  will  then  be  considered,  and  thus  the  liabilities  of 
incoming  and  outgoing  partners  to  creditors  will  be  determined. 

1.   Commencement  of  liability. 

Commencement  of  agency. — The  doctrine  that  each  partner  has 
implied  authority  to  do  whatever  is  necessary  to  carry  on  the  part- 
nership business  in  the  usual  way  is  based  upon  the  ground  that  the 
ordinary  business  of  a  firm  cannot  be  carried  on  either  to  the 
*9n9l  advantage  *of  its  members  or  with  safety  to  the  public, 
unless  such  a  doctrine  is  recognized.  The  existence  of  a 
partnership  is,  therefore,  evidently  presupposed ;  and  although  per- 
sons negotiating  for  a  partnership,  or  about  to  become  partners,  may 
be  the  agents  of  each  other  before  the  partnership  commences,  such 
agency,  if  relied  on,  must  be  established  in  the  ordinary  way,  and 
is  not  to  be  inferred  from  the  mere  fact  that  the  persons  in  question 
were  engaged  in  the  attainment  of  some  common  end,  or  that  they 
have  subsequently  become  partners.  This  is  shown  by  the  cases 
already  referred  to,  when  the  diiference  between  partnerships  and 
inchoate  partnerships  was  being  discussed.  Almost  all  those  cases, 
in  fact,  arose  in  consequence  of  attempts  made  to  fasten  liability  on 
the  defendants,  by  reason  of  some  act  done  by  other  persons,  alleged 
to  be  their  partners ;  and  each  of  those  cases  in  which  the  plaintiff 
failed  is  an  authority  for  the  proposition  that  so  long  as  there  is  no 

Where  it  is  sought  to  charge  several  ment,  liable  for  his  own  share  of  the 

as  partners  in  a  stock  speculation,  the  loss  only,  it  is  proper  to  show  that  one 

plaintiffs  having  been  the  brokers  em-  of  the  defendants  had  a  separate  stock 

ployed,  and  the  defence  being  that  each  account  with  the   plaintiff.     Binney  v. 

of  the  defendants  was,  by  special  agree-  Young,  5  Daly  (N.  Y.)  329. 

319 


202* 


COMMENCEMENT   OF    LIABILITY 


[book  II., 


partnership  there  is   no   implied  authority  similar  to  that   which 
exists  after  a  partnership  is  formed,  (p)  5 


(p)  See  the  cases,  mite  pp.  *19,  el  secj., 
and  *43,  el  seq. ;  and  especially  Ed- 
mimdson  v.  Thompson,  2  Fost.  &  F. 
564;  Gabriel  v.  Evill,  9  Mees.  &  W. 
297. 

5.  Commencement  of  agency. — 
Mr.  Gow,  in  his  work  on  Partnersiiip, 
sajs,  pp.  151,  152,  153:  "A  joint  con- 
tract, however,  entered  into  by  one  or 
more  individuals,  is  binding  only  upon 
those  who  have  a  joint  interest  in  it  at 
the  time  of  its  inception  ;  for  no  subse- 
quent act  by  any  person  who  may  after- 
wards become  a  partner,  not  even  an 
acknowledgment  that  he  is  liable,  will 
entail  upon  that  person  the  obligation  of 
fulfilling  such  a  contract,  if  it  clearly 
appear  that  a  partnership  did  not  exist 
at  the  time  the  contract  was  made.  The 
joint  interest  must  be  contemporaneous 
with  the  formation  of  the  contract  itself, 
to  superinduce  the  corresponding  liabili- 
ty to  perform  it.  If  it  were  otherwise, 
the  law  would,  in  fact,  create  a  supposed 
contract,  when  the  real  contract  between 
the  parties  was  consummated,  before  the 
joint  interest  and  consequent  joint  risk 
■was  in  existence.  Thus,  where  several 
persons  agreed  upon  a  maritime  adven- 
ture, and  to  provide  a  cargo  of  goods 
which  should,  in  the  judgment  of  the 
majority,  be  proper  for  the  voyage ;  and 
permission  was  given  to  the  supercargo 
(who  was  to  have  a  proportionate  profit, 
and  bear  an  equal  loss  with  the  respec- 
tive adventurers)  to  ship,  on  the  joint 
account,  as  many  goods  as  he  might 
think  fit ;  such  goods  being  first  ap- 
proved by  a  majority  of  the  persons 
concerned  in  the  adventure,  as  proper 
for  the  voyage ;  and  it  was  afterwards 
agreed  that  each  party  was  to  hold  no 
other  share  or  proportion  in  the  adven- 


ture than  the  amount  of  what  each  sep- 
arately ordered  and  shipped;  and  that 
the  orders  given  for  the  cargo  and  outfit 
of  the  ship  were  to  be  separately  paid, 
and  that  one  was  not  to  be  bound  for 
any  goods  or  stores  ordered  or  shipped 
by  the  other ;  and  that  the  supercargo 
should  have  free  liberty  lo  ship  what 
goods  were  suitable  to  the  voyage,  over 
and  above  the  ship  and  outfit,  leaving 
room  for  those  ordered  by  the  adven- 
turers ;  and  that  the  ship  should  be  made 
over  in  trust  for  the  general  concern — it 
was  held  that  if  the  supercargo  after- 
wards purchased  goods,  as  part  of  the 
cargo,  and  the  ship  sailed  with  the  goods 
so  purchased,  he  alone  was  liable  for 
them,  and  not  his  co-adventurers  jointly 
with  him.  The  reason  on  which  this 
determination  proceeded  seems  to  have 
been  that  after  tlie  purchase  of  the 
goods  made  by  the  several  adventurers 
there  was  still,  before  they  became  joint 
property,  a  further  act  to  be  done,  which 
was  the  putting  them  on  board  the  ship 
iu  which  they  had  a  common  concern  for 
the  joint  adventure,  and  until  that  fur- 
ther act  was  done,  the  goods  purchased 
by  each  remained  the  separate  property 
of  the  purchaser.  The  partnership  in 
the  goods  did  not  arise  until  their  admix- 
ture in  the  common  adventure.  *  *  * 
It  is  not,  however,  sufficient  to  constitute 
a  joint  liability  for  the  capital  brought 
into  the  trade,  that  there  is  to  be  a  sub- 
sequent participation  in  the  profit  de- 
rived from  it.  In  such  a  case  the  right 
to  participation  can  only  take  its  origin 
from  the  time  of  the  introduction  of  the 
capital ;  and  although  communion  of 
profit  is  a  strong  circumstance  to  explain 
a  contract  in  itself  doubtful,  and  tO' 
show,  as  the  legal  presumption  is,  that  a 


320 


CHAP.  II.,  §  III.]  IX    PARTXEESHIPS.  202* 

Liability  of  partners  who  defer  the  execution  of  articles. — But 
although  this  is  undoubted  law,  still  if  persons  agree  to  become 
partners  as  from  a  future  day,  upon  terms  to  be  embodied  in  a  deed 
to  be  executed  on  that  day,  and  the  deed  is  not  then  executed,  but 
they  nevertheless  commence  their  business  as  partners,  they  will  all 
be  liable  for  the  acts  of  each,  whether  those  acts  occurred  before  or 
after  the  execution  of  the  deed,  {q)  For  the  question  in  such  a  case 
is  not  "When  was  the  deed  executed?"  but  rather  this,  "  When 
did  the  partners  commence  to  carry  on  business  as  such  ?  "  The 
agency  begins  from  that  time,  whether  they  choose  to  execute  any 
partnership  deed  or  not. 

Where  there  is  an  agreement  for  a  partnership  and  there  is  noth- 
ing to  lead  to  the  conclusion  that  the  partnership  was  intended  to 
commence  at  any  other  time,  it  will  be  held  to  commence  from  the 
date  of  the  agreement,  (r)  6 

Firm  not  liable  for  what  a  partner  does  before  he  joins  it. — The 
agency  of  each  partner  commencing  with  the  partnership,  and  not 
before,  it  follows  that  the  firm  is  not  liable  for  *what  may  ,- 
be  done  by  any  partner  before  he  becomes  a  member  thereof.  ^ 
So  that  if  several  persons  agree  to  become  partners  and  to  con- 
partnership  existed  at  the  time  amongst  mence  at  a  future  day,  notes  given  in 
the  participants,  yet,  where  the  nature  the  firm  name  for  goods  to  be  put  in  the 
of  the  contract  clearly  appears,  it  can-  stock  in  trade  (which  goods  are  received 
not  have  such  a  retrospect  as  to  alter  it,  upon  the  individual  credit  of  one  who 
and  to  substitute  the  responsibility  of  intends  to  become  a  member  of  such 
several  for  that  of  an  individual  con-  firm)  may  be  collected  against  him  even 
tractor.  Therefore,  if  several  persons  though  the  partnership  is  never  actually 
agree  to  form  a  partnership,  and  that  formed.  Stiles  v.  Meyer,  64  Barb.  (N. 
each  shall  contribute  a  certain  share  of  Y.)  77 ;  S.  C,  7  Lans.  190 ;  Bliss  v. 
the  capital,  and  any  of  the  persons  Swartz,  7  Lans.  (N.  Y.)  187. 
borrow  or  purchase  the  share  which  is  A  and  B  entered  into  partnership,  and 
by  him  afterwards  brought  into  tlie  agreed  that  the  partnership  should  have 
common  stock,  the  liability  for  payment  relation  back  to  a  time  specified,  and 
to  the  lender  or  vendor  is  not  joint,  but  that  the  firm  should  be  responsible  for 
personal."  the  debts  contracted  for  goods  by  A  in 

{q)  Battley  r.  Lewis,  1  Man.  &  G.  155.    the  intermediate  time.     Held,  that  the 
(»•)  See  Williams  v.  Jones,  5  Barn.  &    firm  was  liable  for  money  appropriated 
C.  108.  to  that  purpose  by  A,  during  the  time 

6.  Liability  of  partners  who  defer  mentioned,  which  he  held  as  treasurer 
the  execution  of  articles.— Where  a  of  the  county.  Hutchinson  v.  Smith,  7 
partnership   is    contemplated    to    com-    Paige  (N.  Y.)  26. 

321  21 


203*  COMMEXCEMENT    OF    LIABILITY  [liOOK    IL, 

tribute  each  a  certain  quantity  of  money  or  goods  for  the  joint  benefit 
of  all,  each  one  is  solely  responsible  to  those  who  may  have  sup- 
plied him  with  tlie  money  or  goods  agreed  to  be  contributed  by 
him  ;  (.s)  and  the  iact  that  the  money  or  goods  so  supplied  have 
been  brought  in  by  him  as  agreed  will  not  render  the  firm  liai)Ie.  {t) 

Upon  this  principle,  apparently,  it  was  held,  in  Wilson  v.  White- 
head, (tt)  that  the  author  and  publisher  of  a  work  were  not  liable 
'for  the  paper  supplied  for  it,  the  ])aper  having  been  ordered  by  and 
supplied  to  the  printer,  who  was  to  share  the  profits  of  the  work. 
The  agreement  l^etween  the  parties  was  that  one  should  be  the  pub- 
lisher, and  make  and  receive  general  payments;  that  another  should 
be  editor;  and  that  the  third  should  print  and  find  the  paper  for 
the  work,  charging  it,  however,  to  the  account  of  the  three  at  cost 
price.  The  profits  were  to  be  equally  divided  amongst  the  three. 
It  was,  therefore,  urged  that  all  were  liable  for  the  paper  supplied ; 
but  it  was  held  that  they  were  not,  for  the  printer  was  not  author- 
ized to  buy  the  paper  except  on  his  own  account,  and  when  he  had 
bouffht  it  he  mio;ht  have  used  it  for  some  other  book.  The  case 
was  likened  to  that  of  coach  proprietors,  where  each  horses  the 
coach  for  one  or  more  stages,  and  each  agrees  to  bring  into  the 
concern  the  work  and  labor  of  his  horses,  and  none  of  the  others 
has  any  interest  in  them,  though  all  share  the  profits,  (a) 

The  propriety  of  the  decision  in  this  case  has  been  doubted,  (y) 

and  it  is  not  easily  reconcilable  with  a  similar  case  decided  at  Nisi 

Prius.  (z)     But  the  writer  submits  that  upon  principle  Wilson  v. 

-,  Whitehead  is  perfectlv  correct,  for  *the  publisher  had  no 
*204l  . 

-^  real  authority  to  buy  the  paper  on  the  author's  credit,  and 

no  authority  so  to  do  ought  to  be  implied  in  favor  of  a  person  who 

(s)  See  Greenslade  v.  Dower,  7  Barn,  case,  in  Kilshaw  v.  Jukes,  3  Best  &  S. 

&  C.  635  ;  Dickinson  v.  Valpy,  10  Barn.  847. 

&  C.  141, 142  ;  Fisher  v.  Tayler,  2  Hare  (x)  Barton  v.  Hanson,  2   Taunt.  49, 

229,  230 ;    and   the   cases   in    the   next  which  shows  that  in  such  a  case  each  is 

note.  alone  liable  for  hay,  ^c,  supplied  to  his 

(()  Heap  V.  Dobson,  15  C.  B.  (N.  S.)  own  horses. 

460 ;  Smith  v.  Craven,  1  Cromp.  &  J.  (y)  See  per  Wightman,  J.,  in  3  Best 

500.  &  S.  871. 

(u)  10  Mees.  &  W.  503.     See  the  ob-  (z)  Gardiner  v.  Childs,  8  Car.  &  P. 

servations   of    Wightman,   J.,   on    this  345, 

322 


<^HAP.  II.,  §  III.]  IX  PARTNERSHIPS.  204* 

knew  nothing  of  the  author  or  of  any  partnership  or  quasi  part- 
nership existing  between  him  and  the  publisher,  (a) 

The  two  well-known  cases  of  Savillc  t;.  Robertson  (6)  and  Gouth- 
waite  V.  Duckworth  (c)  further  ilkistrate  the  principle  now  in  ques- 
tion. These  cases  closely  resemble  each  other  in  many  respects,  for 
in  each  there  was  an  agreement  for  a  joint  adventure  in  goods ;  in 
each  an  attempt  was  made  to  compel  a  person  who  did  not  order 
the  goods  to  pay  for  them,  on  the  grounds  that  he  was  in  partner- 
ship with  the  person  who  did  order  them,  and  that  they  were  sup- 
plied and  used  for  the  joint  adventure ;  and  in  each  the  defence 
^as  that  the  goods  were  ordered  before  any  partnership  com- 
menced, so  that  the  defendant  was  not  liable  for  the  purchase 
made  by  his  copartner.  In  Saville  v.  Robertson  the  defence  was 
proved  and  prevailed,  whilst  in  Gouthwaite  v.  Duckworth  the 
defendant  was  compelled  to  pay.  In  order  to  explain  the  appar- 
ent conflict  between  the  two  cases,  it  is  necessary  to  state  shortly 
the  material  facts  in  each. 

In  Saville  v.  Robertson  (d)  several  persons  agreed  to  share  the 
profit  and  loss  of  an  adventure  in  goods,  of  a  kind  to  be  fixed  by 
a  majority,  but  no  one  was  to  have  any  share  or  proportion  in  the 
adventure  except  to  the  amount  of  the  goods  ordered  and  shipped 
by  himself,  and  no  adventurer  was  to  be  answerable  for  anything 
ordered  or  shipped  by  any  co-adventurer.  One  of  the  adventurers 
having  ordered  goods  and  not  paid  for  them,  it  was  contended  that 
his  co-adventurers  were  liable  for  them,  on  the  ground  that  he  and 
Ihey  were  partners.  But  the  court  held  that  no  partnership  com- 
menced until  the  goods  were  on  board  ;  each  partner  was  to  bring 
in  his  share  only,  and  his  copartners  were  not  liable  to  persons  who 
supplied  him  with  the  means  which  enabled  him  to  bring  in  such 
share. 

*In  Gouthwaite  v.  Duckworth  (e)  Browne  and  Powell,  r:^205 
who  were  in  partnership,  were  indebted  to  Duckworth,  and    - 

(a)  See  Kilshaw  v.  Jukes,  3  Best  &  S.  572  ;  Kilshaw  v.  Jukes,  3  Best  &  S.  847. 

847,  and  ante  p.  *31.  (e)  12  East  421.    Kilshaw  v.  Jukes,  3 

(6)  4  T.  R.  720.  Best  &  S.  847,  was  certainly  very  like 

(c)  12  East  421.  this  case,  but  was  decided  in  accordance 

(d)  4  T.  R.  720.  See,  also,  Hutton  v.  with  Saville  v.  Robertson.  See  ante  p. 
Bullock,  L.  R.,  8  Q.  B.  331,  and  9  Id.  *31. 

32.3 


205*  CO-MME^'CEMENT   OF    LIABILITY.  [bOOK    IL, 

it  was  agreed  that  all  three  should  join  in  an  adventure  in  the  pur- 
chase and  sale  of  goods ;  that  the  goods  sliould  be  bought,  paid 
for  and  shipped  by  Browne  &  Powell,  and  that  the  proceeds  of  the 
sale  should  be  remitted  to  Duckworth,  who  should  deduct  thereout 
the  amount  of  his  debt,  and  then  share  the  profit  of  the  adventure 
with  Browne  &  Powell.  It  was  also  agreed  that  in  the  event  of  a 
loss,  Duckworth  should  share  it.  In  consequence  of  this  agree- 
ment, Browne  bought  goods  for  the  adventure  on  credit,  and  it  was 
held  that  all  the  three,  viz.,  Browne,  Powell  and  Duckworth,  were 
liable  to  pay  for  them,  for  the  goods  were  bought  in  pursuance  of 
the  agreement  for  the  adventure,  and  although  it  was  never  intended 
that  Duckworth  should  pay  for  the  goods,  yet  it  was  thought  that 
the  adventure  commenced  with  the  purchase  of  the  goods,  and  that 
Duckworth  was  therefore  liable. 

There  is  considerable  difficulty  in  supporting  this  decision,  if 
rested  on  the  ground  of  partnership  and  implied  agency  resulting 
therefrom,  for  it  is  not  easy  to  see  how  any  partnership  existed 
prior  to  the  purchase  of  the  goods.  But  if  rested  on  the  ground 
of  agency  independently  of  partnership,  there  is  not  the  same 
difficulty,  for  although  the  goods  were  to  be  paid  for  by  Browne 
&  Powell,  that  might  be  regarded  as  nothing  more  than  a  stipu- 
lation to  take  effect  as  between  them  and  Duckworth.  It  did  not 
necessarily  exclude  the  inference  that  as  Browne  &  Powell  were  to 
buy  for  the  adventure,  they  were  at  liberty  to  procure  the  goods  on 
the  credit  of  all  concerned.  (/)  7 

(/)  See  Young  v.  Hunter,  4  Taunt,  commence  with  the  purchase  of  these 

682,  the  judgment  of  Gibbs,  J.  goods  for  the  purpose  agreed   upon,  in 

7.  Firm  not  liable  for  what  a  part-  the  loss  and  profits  of  which  the  defend- 
ner  does  before  he  joins  it. — In  ants  were  to  share  ?  The  case  of  Saville 
Gouthwaite  v.  Duckworth  (12  East  421,  v  Robertson  does  indeed  approach  very 
425)  Lord  EUenborough  said :  "  It  near  to  this.  But  the  distinction  be- 
comes to  the  question  whether,  contem-  tween  the  cases  is  that  there  each  party 
porary  with  the  purchase  of  the  goods,  brought  his  separate  parcel  of  goods, 
there  did  not  exist  a  joint  interest  be-  which  were  afterwards  to  be  mixed  in 
tween  these  defendants.  The  goods  the  common  adventure  on  board  the 
were  to  be  purchased,  as  Duckworth  ship,  and  till  that  admixture  the  part- 
states  in  his  examination,  for  the  adven-  nership  in  the  goods  did  not  arise.  But 
ture ;  that  was  the  agreement.  Then  here  the  goods  in  question  were  pur- 
what  was  the  adventure  ?     Did  it  not  chased,  in  pursuance  of  the  agreement 

324 


CHAP. 'IL,  §  III.]  INCOMING   PARTNERS. 


205^ 


Liability  of  incoming  partner. — As  the  firm  is  not  liable  for  what 
is  done  by  its  members  before  the  partnership  between  them  com- 
mences, so,  upon  the  very  same  principle,  a  person  who  is  admitted 


for  the  adventure,  of  which  it  lias  been 
before  settled  that  Duckworth  was  to 
have  a  moiety.  There  seems  also  to 
have  been  some  contrivance  in  this  case 
to  keep  out  of  general  view  the  interest 
which  Duckworth  had  in  the  goods ; 
the  other  two  defendants  were  sent  into 
the  market  to  purchase  the  goods,  in 
which  he  was  to  have  a  moiety ;  and 
though  they  were  not  authorized,  he 
says,  to  purchase  on  the  joint  account 
of  the  three ;  yet,  if  all  agree  to  share  in 
goods  to  be  purchased,  and,  in  conse- 
quence of  that  agreement,  one  of  them 
go  into  the  market  and  make  the  pur- 
chase, it  is  the  same,  for  this  purpose,  as 
if  all  the  names  had  been  announced  to 
the  seller,  and  therefore  all  are  liable 
for  the  value  of  them."  Mr.  Justice 
Bayley,  in  the  same  case,  said :  "  In 
Saville  v.  Robertson,  after  the  purchase 
of  the  goods  made  by  the  several  ad- 
venturers, there  was  still  a  further  act 
to  be  done,  which  was  the  putting  them 
on  board  the  ship,  in  which  they  had  a 
common  concern,  for  the  joint  adven- 
ture ;  and,  until  that  further  act  was 
done,  the  goods  purchased  by  each  re- 
mained the  separate  property  of  each. 
But  here,  as  soon  as  the  goods  were 
purchased,  the  interest  of  the  three  at- 
tached in  them  at  the  same  instant  by 
virtue  of  the  previous  agreement." 

A  firm  is  not  liable  for  the  individual 
contracts  or  debts  of  one  of  its  mem- 
bers; even  its  promise  to  fulfill  such 
contracts  must  be  founded  on  a  new 
consideration,  and  the  individual  mem- 
ber must  be  released.  Where  two  of 
the  partners  agree  by  express  contract 
with  the  third  to  fulfill  his  engagement 
with   a  third   person  made   before  the 


formation  of  the  partnership,  such  third 
person  cannot  sue  the  firm  or  such  two 
persons  after  a  breach  of  the  contract, 
because  the  plaintiff  is  no  party  to  such 
special  agreement.  Goodenow  v.  Jones, 
75  111.  48. 

An  assignment  for  the  benefit  of 
creditors  by  a  dissolved  partnership,  to 
one  of  the  members  of  a  new  firm  which 
succeeds  to  its  business,  does  not  render 
the  new  firm  liable  to  the  old  one  for 
the  value  of  any  of  its  assets,  and  the 
new  firm  cannot  be  garnished  at  the 
suit  of  any  creditor  of  the  old  concern. 
Bancker  v.  Harrington,  30  La.  Ann.  136. 

A  commercial  partnership  is  not  liable 
on  the  obligation  contracted  by  one  of 
the  partners  previous  to  the  formation 
of  the  partnership,  notwithstanding  the 
fact  that  the  partnership  was  to  continue 
the  same  business  in  which  the  obliga- 
tions were  contracted,  and  that  specified 
portions  thereof  were  assumed  by  the 
individual  members.  Mosseau  v.  The- 
bens,  19  La.  Ann.  516. 

In  an  action  on  a  note  given  by  one 
partner,  in  the  firm  name,  in  part  for 
goods  sold  to  a  former  firm  composed  of 
different  members,  but  carrying  on  the 
same  business,  it  appeared  that  at  an  in- 
terview of  an  hour's  duration  plaintiff''8 
account  was  presented  and  examined 
and  the  note  executed  therefor,  in  the 
presence  of  J.  S.,  who  was  a  member  of 
both  firms,  but  who  did  not  join  in  the 
conversation  and  was  not  the  financial 
partner  of  either  firm.  It  further  ap- 
peared that  the  account  was  made  out 
to  the  new  firm,  while  many  of  its  items 
were  due  from  the  old  firm,  but  no  in- 
tentional deception  on  the  part  of  the 
plaintiff  was    shown.     Held,    that    the 


325 


205*  CK)MMENCEMENT   OP   LIABILITY.  [bOOK    II.^ 

as  a  partner  into  an  existing  firm  does  not  by  his  entry  become 

liable  to  the  creditors  of  the  firm  for  anythini^  done   before  he 

became  a  partner.     Each  partner  is,  it  is  true,  the  agent  of  the 

^  firm,  *but,  as  before  pointed  out,  the  firm   is   not  distin- 
*2061  .  • 

-"  guishable  from  the  persons  from  time  to  time  composing^ 

it ;  and  when  a  new  member  is  admitted  he  becomes  one  of  the 
firm  for  the  future,  but  not  as  from  the  past,  and  his  present  con- 
nection with  the  firm  is  no  evidence  that  he  ever,  expressly  or  im- 
pliedly, authorized  what  may  have  been  done  prior  to  his  admission. 
It  may  perhaps  be  said  that  his  entry  amounts  to  a  ratification  by 
him  of  what  his  now  partners  may  have  done  before  he  joined 
them.(5r)  But  it  must  be  borne  in  mind  that  no  person  can  be 
rendered  liable  for  the  act  of  another  on  the  giound  that  he  has 
ratified,  confirmed  or  adopted  it,  unless,  at  the  time  the  act  was 
done,  it  was  done  on  his  behalf.  (A)  Therefore,  in  Young  v.  Hun- 
ter, (i)  where  Hunter  &  Co.  had  ordered  goods  of  the  plaintiff  for 
sale  in  the  Baltic,  and  afterwards  it  was  agreed  between  Hunter  & 
Co.  and  Hoffham  &  Co.  that  the  latter  should  join  in  the  adven- 
ture, and  share  the  profit  and  loss,  it  was  held  to  be  clear  that 
Hoffham  &  Co.  were  not  liable  to  the  plaintiff  to  pay  for  the  goods. 
So,  in  Ex  parte  Jackson,  {j)  a  person  who  was  indebted  by  bond 
for  money  borrowed  to  carry  on  a  trade  took  two  other  persons^ 
ostensibly  into  partnership.  After  two  years,  a  joint  commission 
of  bankruptcy  issued  against  the  three,  and  it  was  held  that  the 
bond  debt  was  not  provable  as  a  partnership  debt  against  the  joint 
estate,  but  remained  what  it  was  originally,  the  separate  debt  of 
the  obligor.8 

evidence  justified  a  finding  by  the  jury  made  a  contract  to  pay  royalties  for  the 

of  an  a;->sent  by  J.  S.  to  the  execution  of  use  of  a  patent  right,  and  as  such  en- 

the    note.     Shaw    v.    McGregary,    105 .  joyed  benefits  thereunder,  is  liable,  not 

Mass.  96.  on  the  express  contract,  but  on  an  im- 

{g)  See  Horsley  v.  Bell,  1  Bro.  C.  C.  plied  contract  to  pay  for  his  enjoyment 

101,  note,  per  Gould,  J.  of  benefits  according   to  the  terms  en- 

{h)  Wilson  V.  Tumman,  6  Man.  &  G.  joyed  by  the  rest  of  the  firm.     Rogers  v. 

236.  Eeissner,  30  Fed.  Rep.  525. 

(i)  4  Taunt.  582.  An  incoming  partner  is  not  liable  for 

{j)  1  Ves.  Jr.  131.  the  previous  debts  of  the  concern,  unless 

8.  Liability  of  incoming  partner. —  he  makes  himself  so  by  express  agree- 

A  partner  who  enters  a  firm  after  it  has  ment,  or  by  such  conduct  as  will  raise 

326 


CHAP.  II.,  §  III.]  INCOMING   PARTNERS. 


206^ 


AppliGation  of  principle  to  promoters  of  companies. — Again,  in 
Beale  v.  Mouls,  {k)  the  member*  of  a  provisional  committee  of  a 
company  entered  into  a  special  agreement  with  the  plaintiff  for  the 


the  presumption  of  a  special  promise. 
Kingo  V.  Wing  (Arlc.),  5  H.  W.  Rep.  787. 

One  partner  transferred  his  interest  to 
the  other,  who  subsequently  took  a  new 
partner.  Held,  such  new  firm  could  not 
be  held  liable,  as  survivors,  fur  a  debt  of 
the  old  firm,  in  the  absence  of  evidence 
that  the  new  firm  assumed  payment  of 
such  debt.  Dowling  v.  Clift,  23  N.  Y. 
Week.  Dig.  275. 

Where  the  seller  of  goods  to  a  firm 
agrees  to  deliver  them  at  a  future  day, 
and  prior  to  that  time  a  new  partner  is 
admitted  to  the  firm,  and  a  note  is  given 
in  the  firm  name  for  the  goods  when 
delivered,  the  new  partner  is  liable  even 
though  the  seller  did  not  know,  when  he 
took  the  note,  that  a  new  member  had 
entered  the  firm.  Kearney  v.  Snodgrass, 
12  0reg.  311. 

In  Atkins  v.  Hunt  (14  N.  H.  205,  206), 
Gilchrist,  J.,  said  :  "  There  is  of  course 
an  essential  difference  between  a  mere 
proposition  to  form  a  partnership,  and 
its  actual  constitution.  Persons  may 
take  a  deep  interest  in  the  objects  to  be 
accomplished  by  the  comparny ;  may 
make  donations  to  aid  its  progress ;  or 
may  sign  their  names  to  subscription 
papers  for  the  same  end,  without  being 
liable  for  debts  which  other  persons 
may  contract  in  the  prosecution  of  the 
same  purpose.  But  a  difficult  question 
often  arises  as  to  where  the  proposition 
to  make  the  contract  ends,  and  the  con- 
tract itself  begins.  In  Bourne  v.  Freeth, 
9  Barn.  &  C.  632,  a  prospectus  was  issued, 
Btating  the  conditions  upon  which  the 
company  was  formed ;  that  the  concern 


was  to  be  divided  into  twenty  shares,  to 
be  under  the  management  of  a  commit- 
tee, and  ten  per  cent,  of  the  subscriptions 
to  be  paid  in  by  a  certain  date.  It  was 
held  that  this  prospectus  imported  only 
that  a  company  was  to  be  formed,  and 
not  that  it  was  actually  formed,  and  that 
the  signature  to  the  prospectus  did  not 
indicate  to  any  person  who  should  read 
it  that  the  signer  had  become  a  member 
of  a  company  already  formed.  So,  in  a 
case  where  all  the  acts  proved  and  relied 
on  were  equally  consistent  with  the  sup- 
position of  an  intention  on  the  part  of 
the  defendant  to  become  a  partner  in  a 
trade  or  business  to  be  afterwards  car- 
ried on,  provided  certain  things  were 
done,  as  with  that  of  an  existing  part- 
nership, it  was  held  that  he  was  not  a 
partner.  (Dickinson  v.  Valpy,  10  Barn. 
&  C.  128,  per  Parke,  J.)  And  where  a 
prospectus  for  a  company  was  issued,  to 
be  conducted  pursuant  to  the  terms  of  a 
deed  to  be  drawn  up,  it  was  held  tliat  an 
application  for  shares,  and  payment  of 
the  first  deposit,  did  not  constitute  one  a 
partner  who  had  not  otherwise  inter- 
fered in  the  concern.  (Fox  v.  Clifton,  6 
Bing.  776.)  It  was  an  important  ele- 
ment in  that  decision  that  the  deed  was 
not  executed  by  the  defendant  who  was 
sought  to  be  charged  as  a  partner.  In 
Howell  V.  Brodie,  (6  Bing.  N.  C.  44), 
the  defendant,  from  1829  until  1833,  ad- 
vanced various  sums,  with  a  view  to  a 
partnership  in  a  market  about  to  be 
erected ;  knew  that  the  money  was  ap- 
plied towards  the  erection,  and  was  con- 
sulted in  every  stage.     In  October,  1833, 


{k)  10  Q.  B.  976.     See,  too,  Bremner    ridge  v.  Hesse,  9  Car.  &  P.  200. 
V.  Chamberlavne,  2  Car.  &  K.  569 ;  Ker- 

327 


206*  COMMENCEMENT   OF    LIABILITY.  [bOOK    II., 

maiiuflictiire  of  a  steam  carriage.  Afterwards,  but  before  the  con- 
tract was  completed,  the  defendant  Mouls  became  a  member  of  the 
committee  and  interested  himself  in  the  completion  of  the  carriage. 
Several  alterations  and  payments  on  account  were  also  made  whilst 
lie  was  a  member,  and  with  his  knowledge.  The  carriage  was  com- 
pleted, but  the  committee  then  refused  to  take  it  or  to  pay  for  it. 
In  *an  action  brought  against  Mouls  and  the  other  members  r^f,^- 
of  the  committee,  it  was  held  that  Mouls  was  not  liable.  ^ 
He  was  not  liable  on  the  special  contract,  for  he  was  no  party 
thereto,  by  himself  or  any  agent,  and  he  could  not  be  made  liable 
on  any  implied  contract,  for  the  existence  of  a  special  agreement 
excluded  any  implied  contract  relative  to  the  same  subject  matter.  It 
follows,  from  the  principles  on  which  this  case  was  determined,  that 
if  the  carriage  had  been  accepted  by  the  committee,  Mouls  would 
not  have  been  liable  to  pay  for  it.  The  delivery  and  acceptance  in 
such  a  case  would  have  been  in  pursuance  of  the  contract,  to  which, 
ex  hypothesi,  he  was  no  party ;  and  no  liability  could  attach  to  him 
by  virtue  of  any  implied  contract  to  pay  that  which  became  payable 
by  virtue  of  an  express  contract  made  with  other  people.  It  has, 
indeed,  been  expressly  decided  that  if  several  members  of  a  com- 
mittee order  goods,  and  then  a  new  member  joins  tJie  committee,  he 
is  not  liable  to  pay  for  the  goods,  though  they  are  delivered  after  he 
joined  it.  {I)  9 

it  was  settled  by  a  written  agreement  9.  Application  of  principle  to  pro- 
that  he  should  have  a  seventh  share  of  motersof  companies.— In  Fox  v.  Clifton 
it ;  but  it  was  held  that  he  was  not  liable  (6  Bing.  776),  Lord  Chief  Justice  Tindal 
as  a  partner  until  October,  1833,  although  said:  "Upon  this  first  question,  tbere- 
profits  had  been  made,  but  not  accounted  fore,  whether  a  partnership  was  actually 
for  to  him,  before  that  time.  Lord  Chief  formed,  we  think,  if  the  right  to  partici- 
Justice  Tindal  mentions  the  fact  that  no  pate  in  the  profits  of  a  joint  concern  is 
account  of  profits  was  rendered  previous  to  be  taken,  as  undoubtedly  it  ought  to 
to  October,  1833,  as  being  in  favor  of  the  be,  as  a  test  of  a  partnership,  these  de- 
defendant."  fendants  were  not  entitled  at  any  time 
{I)  Newton  v.  Belcher,  12  Q.  B.  921  ;  to  demand  a  share  of  profits,  if  profits 
Whitehead  v.  Barron,  2  Moo.  &  K.  248.  had  been  made  ;  inasmuch  as  they  had 
In  Beech  v.  Eyre,  5  Man.  &  G.  415,  the  never  fulfilled  the  conditions  upon  wliich 
goods  were  both  ordered  and  supplied  they  subscribed.  We  think  the  matter 
at  a  time  when  there  was  evidence  to  proceeded  no  further  than  that  the  de- 
Bhow  that  the  defendant  was  one  of  the  fendants  had  offered  to  become  partners 
committee.  in  a  projected  concern,  and  that  the  con- 

328 


CHAP.  II.,  §  III.]               INCOMING  PARTNERS.                                         207* 

New  contract. — Cases,  ho\s'ever,  of  this  kind  must  not  be  con- 
founded with  those  in  which  a  new  though  tacit  contract  is  made 

cern  proved  abortive  before  the  period  The  general  doctrine  is  well  summed 
at  which  the  partnership  was  to  com-  up  by  Mr.  Collyer  in  his  work  on  Part- 
mence ;  and  therefore,  with  respect  to  nership  Law  (book  5,  c.  1,  §  2,  pp.  735- 
the  agency  of  the  directors,  which  is  the  743),  as  follows:  "In  joint  stock  corn- 
legal  consequence  of  a  partnership  com-  panics,  more  than  in  any  other  kind  of 
pletely  formed,  we  think  the  directors  partnership,  a  variety  of  acts  are  done 
proceeded  to  act  before  they  had  au-  before  the  partnership  is  actually  com- 
thority  from  these  defendants ;  for  they  menced.  Notices  are  published,  pros- 
began  to  act  in  the  name  of  the  whole  pectuses  are  distributed,  meetings  are 
before  little  more  than  half  the  capital  held,  officers  are  chosen,  deposits  are 
was  subscribed  for,  or  half  the  shares  paid,  and  scrip  receipts  are  given,  long 
were  allotted.  The  persons,  therefore,  before  the  business  is  commenced  or  the 
who  contracted  with  the  directors  must  deed  of  settlement  is  executed.  Indeed, 
rest  upon  the  security  of  the  directors  many  of  these  acts  are  necessarily  done 
who  made  such  contract,  and  of  those  before  even  the  full  complement  of  the  in- 
subscribers  who,  by  executing  the  deed,  tended  shareholders  is  made  up.  Hence, 
have  declared  themselves  partners,  and  although  the  prime  movers  and  agitators 
of  any  who  have,  by  their  subsequent  of  the  scheme  will  undoubtedly  be  liable 
conduct,  recognized  and  adopted  the  acts  in  respect  of  the  contracts  into  which 
and  contracts  of  the  directors.  But  they  they  enter  for  the  purpose  of  launching 
have  not  the  security  of  the  pfesent  de-  the  company ;  yet  they  cannot  by  such 
fendants,  who  are  not  proved  by  the  evi-  proceedings  bind  those  who  merely  an- 
dence  to  stand  in  any  one  of  such  pre-  swer  their  invitation ;  those,  for  instance, 
dicaments.  It  is  unnecessary  to  advert  who  name  themselves  subscribers,  and 
to  any  of  the  cases  which  have  been  re-  even  pay  deposits,  and  do  other  acts 
ferred  to,  each  of  which  must  rest  upon  showing  an  intention  of  becoming  part- 
its  own  peculiar  circumstances,  except  ners,  but  who,  by  neglecting  to  observe 
that  with  respect  to  Perring  v.  Hone,  de-  the  rules  or  to  comply  with  the  demands 
cided  in  this  court,  we  think  it  right  to  of  the  society,  never  become  entitled  to 
observe  that  the  great  point,  whether  share  the  profits.  The  contract  of  part- 
there  was  a  partnership  or  not,  does  not  nership,  as  regards  these  passive  sub- 
appear  to  have  been  made  the  prominent  scribers,  is  executory  only,  and  may  be 
subject  of  argument,  but  to  have  been  abandoned,  if  tlie  terms  of  the  partner- 
rather  assumed  than  disputed ;  for  the  ship  are  not  reasonably  fulfilled  by  the 
advertisement  or  prospectus  was  not  projectors.  Under  such  circumstances, 
brought  to  the  attention  of  the  court,  nor  they  never  have  become  actual  partners 
is  there  any  argument  upon  the  terms  in  the  concern,  and  consequently  have 
of  it.  It  is  not  incompatible  with  that  never  rendered  themselves  liable  for  its 
determination  that  the  court  might  have  debts.  In  the  language  of  a  learned 
held  the  proof  of  partnership  incom-  judge:  *  If  there  is  a  contract  to  carry 
plete,  if  the  same  materials  had  been  on  business  by  way  of  present  partner- 
brought  before  them  which  are  presen-  ship  between  a  certain  definite  number 
ted  to  us."  of  persons,  and  the  terms  of  that  contract 

329 


207*  COMMENCEMENT    OF    LIABILITY.  [bOOK    II.,. 

after  tlie  inti-uduction  of  a  new  partner.  Dyke  v.  Brewer  (m)  illus- 
trates the  distinction  alluded  to.  In  that  case  the  plaintiff  agreed 
with  A  to  supply  him  with  bricks  at  so  much  per  thousand,  and  the 
plaintiff  began  to  supply  them  accordingly.  B  then  entered  into 
partnership  with  A,  and  the  plaintiff  continued  to  su])ply  bricks  as 
before.  It  was  held  that  both  A  and  B  were  liable  to  pay,  at  the 
rate  agreed  upon,  for  the  bricks  supplied  to  both  after  the  partner- 
ship commenced.  The  ground  of  this  decision  was  tJiat  as  A  had 
not  ordered  any  definite  number  of  bricks,  each  delivery  and 
acceptance  raised  a  new  tacit  promise  to  pay  on  the  old  terms, 
although  if  all  the  bricks  delivered  had  beeu  ordered  by  A  in  the 
first  instance,  he  alone  would  have  been  liable  to  pay  for  them,  (n) 
*  Incoming  partner  taking  debts  on  himself. — If  an  incom- 
^  iug  partner  chooses  to  make  himself  liable  for  the  debts 
incurred  by  the  firm  prior  to  his  admission  therein,  there  is  nothing 
to  prevent  his  so  doing.  But  it  must  be  borne  in  mind  that  even 
if  an  incoming  partner  agrees  with  his  copartners  that  the  debts  of 
the  old  shall  be  taken  by  the  new  firm,  this,  although  valid  and 
binding  between  the  partners,  is,  as  regards  strangers,  res  inter  alios 
acta,  and  does  not  confer  upon  them  any  right  to  fix  the  old  debts 
on  the  new  partner,  (o)  In  order  to  render  an  incoming  partner 
liable  to  the  creditors  of  the  old  firm,  there  must  be  some  agreement, 
express  or  tacit,  to  that  effect  entered  into  between  him  and  the 
creditors,  and  founded  on  some  sufficient  consideration.  If  there 
be  any  such  agreement,  the  incoming  partner  will  be  bound  by  it, 
but  his  liabilities  in  respect  of  the  old  debts  will  attach  by  virtue 

are  unconditional,  or  complete,  then  the  contracts,  it  seems  to  me  to  be  clear  that 

partners  give  to  each  ether  an  implied  he  is  not  bound  by  them,  on  the  simple 

authority  to  bind   the  rest  to  a  certain  ground   that   he   has    never  authorized 

extent.     But  if  a  person  agree  to  be-  them.' " 

come  a  partner  at   a   future  time  with  {m)  2  Car.  &  K.  828. 

others,  provided  other  persons  agree  to  {n)   Helsby  ?;.  Mears,  5  Barn.  &  C.  504, 

do    the   same,    and    advance   stipulated  is  another  case  turning  on  the  same  prin- 

portions   of    capital,    or    provided    any  ciple  as  is  explained  by  Lord  Denman 

other  previous  conditions  are  performed,  in  Beale  v.  Mouls,  10  Q.  B.  976. 

he  gives  no  authority  at  all  to  any  other  (o)  See    per   Parke,   J.,    in   Vera    v. 

individual,  until  all  those  contracts  are  Ashby,  10  Barn.  &  C.  298;    Ex  parte 

performed.   If  any  of  the  other  intended  Peele,  6  Ves.  602 ;  Ex  parte  Williams,. 

partners   in   the  mean  time  enter   into  Buck  10. 

330 


CHAP.  II.,  §  III.]  INCOMING    PARTNERS. 


208* 


of  the  new  agreement,  and  not  by  reason  of  his  having  become  a 
partner.  10 

Evidence  of  agreement  to  do  so. — An  agreement  by  an  incoming; 


10.  Incoming  partner  taking  debts 
on  himself — when  liable. — Incoming 
partners  may  assume  to  themselves  tlie 
debts  of  the  concern  with  which  tliey 
connect  themselves;  and  this  assump- 
tion may,  both  at  law  and  in  equity, 
either  be  proved  by  their  express  cove- 
nant or  contract,  or  be  inferred  from  the 
terms  of  it,  or  from  the  treatment  of 
such  debts  by  the  tirm,  to  the  knowledge 
of  the  incoming  partners,  as  the  debis 
of  the  new  firm.  Updike  v.  Doyle,  7 
K.  I.  446. 

Where  an  incoming  partner  adopts 
an  executory  contract  made  by  the 
other  partner,  he  becomes  liable  the  same 
as  if  he  had  always  been  a  member  of 
the  firm.     Lucas  v.  Coulter,  104  Ind.  81. 

Where  a  drawee  of  a  bill  of  exchange, 
before  its  acceptance,  enters  into  part- 
nership with  others,  all  agreeing  that 
the  goods  for  which  the  bill  was  given 
shall  be  used  in  the  business  and  be  paid 
for  by  the  firm,  and  the  drawee  partner 
accepts  the  bill  for  the  firm,  such  accept- 
ance is  binding  on  the  partners.  Mark- 
ham  V.  Hazen,  48  Ga.  570. 

Where  a  husband,  being  a  partner, 
dies,  and  the  wife  succeeds  him  in  the 
firm,  it  will  be  presumed  that  she  be- 
comes liable  for  his  partnership  debts, 
and  a  mortgage  executed  therefor  is 
founded  on  a  good  consideration.  Presser 
V.  Henshaw,  49  Iowa  41. 

While  a  special  promise  is  necessary, 
yet  an  assumption  by  an  incoming  part- 
ner of  the  prior  debts  of  the  firm  may  be 
proved  by  very  slight  testimony.  Cross 
V.  Burlington  Nat.  Bank,  17  Kan.  3o6. 

Where  a  party  purchases  an  interest 
in  a  commercial  house,  entitling  him 
"  to  an  equal  undivided  one-third  inter- 


est and  ownership,  and  to  all  stock  of 
merchandise,  bills  receivable,  and  debts  in 
book  accounts  on  hand,  due  or  owing  to 
the  firm  on  a  given  day  (over  and  above 
the  payment  of  the  liabilities  of  said 
firm),"  he  is  responsible  for  the  debts  of 
the  house  existing  at  the  time  of  pur- 
chase. Hughes  y.  Waldo,  14La.  Ann.  348. 

Illustrations. — Goods  were  purchased 
by  one  person  for  which  a  promissory 
note  was  given.  Afterwards  he  entered 
into  partnership  with  another,  and  by 
consent  of  both  partners,  and  of  the 
holder  of  the  note,  the  words  "  and  com- 
pany"' were  added  to  the  signature  of 
the  maker,  to  make  the  note  stand 
against  the  tirm.  Held,  that  the  note 
was  binding  on  the  partnership.  Crum 
V.  Abbott,  2  McLean  (U.  S.)  233. 

Defendant  entered  into  partnership 
with  a  party  who  was  indebted  to  plain- 
tiffs. Defendant  agreed  with  his  partner 
to  pay  one-half  of  this  indebtedness. 
Held,  that,  as  an  interest  in  the  assets 
to  which  plaintiffs  had  a  right  to  look 
for  the  satisfaction  of  their  claims  had 
been  transferred  to  defendant,  the  latter's 
promise  to  liis  partner  to  pay  one-half 
of  plaintiffs'  claims  was  a  promise  for 
plaintiffs'  benefit,  and  inured  by  an 
equitable  subrogation  to  plaintiffs,  enti- 
tling them  to  sue  defendant  thereon. 
Eingo  V.  Wing  (Ark.),  5  S.  W.  Rep.  787. 

Where  a  retiring  partner  sold  his  in- 
terest in  the  firm  to  A,  who  undertook 
to  be  responsible  for  the  firm's  tlebts  t» 
the  extent  of  the  vendor's  liability,  and 
he  became  a  member  of  the  firm,  and 
the  new  firm  did  pay  some  of  the  old 
firm's  debts,  and  the  assets  which  the  re- 
tiring partner  left  were  sufiicieut  to  pay 
all  the  firm's  debts,  it  was  held,  in  a  suit 

31 


•208^ 


COMMENCEMENT   OF   LIABILITY. 


[book  IL, 


partner  to  make  himself  liable  to  creditors  for  debts  owing  to  them 
before  lie  joined  the  iirm,  may  be,  and  in  practice  generally  is,  es- 
tablished by  indirect  evidence.     The  courts,  it  has  been  said,  lean 


by  the  retiring  partner,  to  compel  an 
application  of  the  firm's  assets  to  the 
payment  of  the  old  firm's  debts,  that  the 
undertaking  by  tlie  new  firm  to  pay  the 
old  firm's  debts  would  be  implied,  but 
as  no  fraud  was  proved,  that  the  com- 
plainant was  only  entitled  to  be  repaid 
that  whicii  he  had  been  compelled  to 
pay  as  partner.  Peyton  v.  Lewis,  12  B. 
Mon.  (Ky.)  356. 

F.,  by  an  agreement  in  writing,  pur- 
chased the  interest  of  S.,  in  the  firm  of 
S.  &  O.,  and  bound  himself  "to  assume 
all  the  debts  and  liabilities  of  said  S.  in 
the  late  firm,  and  to  save  him  harmless 
on  account  of  all  debts  whatever  of  said 
firm."  Held,  that  a  creditor  of  the  firm 
was  entitled  to  be  substituted  to  a  per- 
sonal judgment  against  F.,  on  his  agree- 
ment in  favor  of  S.,  the  latter  consent- 
ing thereto.  Francis  v.  Smith,  1  Duv. 
(Ky.)  121. 

A,  being  a  member  of  a  firm,  and  hav- 
ing contributed  to  the  stock  of  the  com- 
pany less  than  he  had  agreed  on  forming 
the  partnership,  sold  out  his  interest  to 
B,  with  the  assent  of  the  other  partners, 
and  was  released  by  them  from  all  lia- 
bility to  pay  any  of  "  the  debts  due  by, 
or  demands  which  might  be  brought 
against,  said  establishment."  Held,  that 
B,  succeeding  to  the  interest  of  A,  took 
upon  himself  the  liability  of  A  to  con- 
tribute to  the  other  members  of  the  firm. 
Cornwell  v.  Sandidge,  5  Dana  (Ky.)  210. 

Two  consignees  became  partners  for 
the  transaction  of  commission  business, 
and,  circumstances  tending  to  show  that 
they  turned  their  separate  consignments 
into  common  stock,  both  were  held  liable 
for  the  proceeds.  Dix  v.  Otis,  5  Pick. 
(Mass.)  38. 


When  not  liable. — -The  general  rule 
is  that  an  incoming  partner  does  not  be- 
come liable  for  antecedent  debts  of  the 
firm  without  an  express  undertaking  to 
that  effect  upon  a  sufficient  considera- 
tion. Meadorz).  Hughes,  14  Bush  (Ky.) 
652;  Wright  v.  Brosseau,  73  111.  381; 
Parmalee  v.  Wiggenhorn,  6  Neb.  322; 
Fagan  v.  Long,  30  Mo.  222 ;  Stenburg 
V.  Callanan,  14  Iowa  251. 

The  presumption  is  that  an  incoming 
partner  is  not  liable  for  previously  con- 
tracted debts.  Kountz  v.  Holthouse,  85 
Pa  St.  235.  The  rule  is  that  he  is  not 
so  liable.  Babcock  v.  Stewart,  58  Pa.  St. 
179;  Deere  v.  Plant,  42  Mo.  60;  Harp 
V.  Tomlinson,  2  Vt.  103 ;  Adkins  v. 
Arthur,  33  Tex.  431  ;  Atwood  v.  Lock- 
hart,  4  McLean  (U.  S.)  350. 

A  copartner  cannot  make  an  incoming 
partner  liable  for  the  pre-existing  debts 
by  giving  the  note  of  the  new  firm  there- 
for, but  the  debt  may  be  novated  with 
the  consent  of  all  parties.  Fagan  v. 
Long,  30  Mo.  322. 

Where  a  partnership  dissolves,  a  new 
firm  composed  entirely  of  a  portion  of 
the  members  of  the  old  partnership  can- 
not be  sued  jointly,  in  their  firm  name, 
for  a  debt  of  the  dissolved  firm.  Shorter 
V.  Highlower,  48  Ala.  526. 

An  incoming  partner  will  not  be  liable 
for  an  old  debt  of  the  firm,  unless  there  is 
a  novation  of  the  debt  by  a  new  promise 
by  the  entire  now  firm,  upon  a  valid  con- 
sideration, and  a  discharge  of  the  old 
firm  upon  the  old  debt.  Stenburg  v. 
Callanan,  14  Iowa  251. 

To  warrant  a  suit  by  creditors  against 
an  incoming  partner,  upon  a  previous 
debt  of  the  firm,  there  must  be  an  agree- 
ment  between    him   and   the   creditors 


332 


CHAP.  II.,  §  III.]  INCOMING   PARTNERS. 


208^ 


in  favor  of  such  an  agreement,  and  are  ready  to  infer  it  from  slight 
circumstances ;  {p)  and  they  seem  formerly  to  have  inferred  it  when- 
ever the  incoming  partner  agreed  with  the  other  partners  to  treat 
such  debts  as  those  of  the  new  firm,  (g)  But  this  certainly  is  not 
enough,  for  the  agreement  to  be  proved  is  an  agreement  with  the 
creditor,  and  of  such  an  agreement  an  arrangement  between  the 
partners  is  of  itself  no  evidence.  (7-) 

As  an  instance  where  an  incoming  partner  made  himself  liable 


founded  upon  sufficient  consideration. 
An  agreement  between  him  and  his  co- 
partners that  he  shall  be  liable  does  not 
give  the  creditors  a  right  to  sue.  More- 
head  V.  Wriston,  73  N.  C.  398. 

The  rule  that  entries  on  the  firm  books 
bind  the  firm  does  not  apply  to  the  lia- 
bility of  a  new  partner  for  debts  of  the 
old  firm  charged  to  th«  new  firm  on  its 
books,  where  he  has  not  had  access  to 
the  books  so  as  to  enable  him  to  know 
what  has  been  done.  But  his  consent 
to  be  bound  will  be  implied  if  he  fails 
to  object  when  he  first  has  notice  of  such 
entries.  Shoemaker  Piano  Mfg.  Co.  v. 
Bernard,  2  Lea  (Tenn.)  358. 

Illustrations. — Where  T.  bought  the 
interest  of  H.  in  the  firm  of  H.  &  W., 
and,  with  W.,  gave  H.  a  bond  of  in- 
demnity against  all  debts  of  the  old  firm, 
covenanting  to  pay  them,  the  creditors 
of  the  old  firm  had  no  right  of  action 
against  the  new,  upon  the  bond,  for  want 
of  privity  thereto.  Hicks  v.  Wyatt,  23 
Ark.  55. 

A  and  B  having  been  partners,  C  pur- 
chased the  interest  of  A  in  the  firm, 
agreeing  to  pay  one-half  of  the  partner- 
ship debts  of  A  and  B,  and  B  and  C  then 
formed  a  partnership.  Held,  that  the 
partnership  debts  of  A  and  B  did  not 
become  debts  of  the  firm  of  B  &  C  by 
the  terms  of  the  agreement  between  B 
and  C.     Hyer  r.  Norton,  26  Ind.  269. 

Where  the  purchaser  of  a  lot  of  mules 


upon  credit,  which  were  to  be  delivered 
to  him  at  a  future  time,  before  their  de- 
livery formed  a  partnership  with  another 
person,  with  the  agreement  that  the 
mules  were  to  be  put  into  the  joint  stock 
and  sold  on  joint  account,  and  they  were 
so  sold — Held,  that  the  surety  on  the 
notes  given  by  the  purchaser  for  the 
mules,  who  had  been  compelled  to  pay 
the  notes,  could  not  hold  the  partner 
liable  as  a  joint  purchaser.  Duncan  v. 
Lewis,  1  Duv.  (Ky.)  183. 

Where  a  partnership  between  attor- 
neys was  dissolved  after  a  suit  begun, 
and  a  new  partnership  formed  by  one  of 
the  former  partners  and  a  new  partner^ 
which  in  turn  was  dissolved  before  the 
money  in  the  suit  was  collected,  an 
action  for  detaining  the  amount  col- 
lected cannot  be  maintained  against  the 
new  partner,  the  other  alone  having  been 
attorney  of  record  in  that  suit.  Ayrault 
V.  Chamberlin,  26  Barb.  (N.  Y.)  83. 

(p)  Ex  parte  Jackson,  1  Ves.  Jr.  131  j 
Ex  parte  Peele,  6  Ves.  602.  See,  also, 
Rolfe  V.  Flower,  L.  R.,  1  P.  C.  27. 

{q)  See  Cooke's  Bank.  Law  (8th  ed.) 
534,  citing  Ex  parte  Bingham  and  Re 
Staples ;  Ex  parte  Clowes,  2  Bro.  C.  C. 
595. 

(r)  Ex  parte  Peele,  6  Ves.  602 ;  Ex 
parte  Parker,  2  Mont.,  D.  &  D.  511.  See, 
also.  Ex  parte  Freeman,  Buck  471 ;  Ex 
parte  Fry,  1  Glyn  &  J.  96 ;  Ex  parte  Wil- 
liams, Buck  13. 


333 


209*  COMMENCEMENT    OF    LIABILITY.  [boOK    II., 

for  debts  contracted  by  the  firm  ])efore  he  joined  it,  reference  may 

be  made  to  Ex  parte  Whitmore.  (s)     In  that  *ease  Warwick  ^ 

.  r*209 

and    Clagett    became  partners.     Warwick,   who    had    had  '- 

dealings  with  merchants  in  America,  informed  them  that  he  had 

taken  Clagett  into  partnership,  and  requested  them  to  make  up  their 

accounts  and  transfer  any  balance  due  to  or  from  him  (Warwick)  to 

the  new  firm.     These  instructions  were  repeated  and  confirmed  by 

Warwick  and  Clagett,  and  were  acted  on.     A  debt  owing  from 

Warwick  was  placed  to  the  debit  of  the  new  firm,  and  a  bill  was 

drawn  on  the  firm  for  the  amount  of  the  debt  and  was  accepted,  but 

was  dishonored.     On  the  bankruptcy  of  the  firm  it  was  held  that 

the  debt   in  question  had  become  the  joint  debt  of  Warwick  and 

Clagett,  and  not  only  so,  but  that  the  joint  liability  of  the  two  had 

been  accepted  in  lieu  of  the  sole  liability  of  Warwick,  li 

Bills  by  old  partners  for  old  debts  a  fraud  on  new  partner. — Be- 
fore leaving  this  subject  it  may  be  as  well  to  observe  that  as  an  in- 
coming partner  does  not,  by  the  fact  of  entering  the  firm,  take  upon 
himself  the  then  existing  liabilities  thereof,  if  after  he  has  joined 
the  firm  his  copartners  giv^e  a  bill  or  note  in  their  and  his  name  for 
a  debt  contracted  by  them  alone,  this  is  prima  facie  a  fraud  upon 
him,  and  consequently  he  will  not  be  liable  to  a  holder  with  no- 
tice, {t) 

Account  stated  in  respect  of  old  debt. — -For  similar  reasons,  an  in- 
coming partner  will  not,  it  is  apprehended,  be  liable  to  pay  a  debt 
contracted  before  he  became  a  partner,  merely  because  his  copartner 
has  afterwards  stated  an  account  with  the  creditor  and  thereby 
admitted  that  the  debt  in  question  is  due  from  the  firm,  {u)  But, 
as  will  be  seen  hereafter,  an  incoming  partner,  unless  he  takes  care, 
may  find  himself  liable  to  pay  the  balance  of  an  open  running 
account  commencing  before  he  joined  the. firm  and  continued  after- 

(s)  3  Deac.  365.     See,  also,  Rolfe  v.  persons   who   desire   to    establish   such 

Flower,  L.  E,.,  1  P.  C.  27,  which  was  a  contract.     Peters  v.  McWilllams,  78  Va. 

stronger  case.  567. 

11.  Evidence   of  agreement    to  be  (t)  See  Shirreff  v.  Wiiks,  1  East  48, 

bound  by  debts  of  old  firm. — A  newly  ante  p.  *173. 

admitted  partner  only  becomes  liable  for  (m)  See,  as  to  accounts  stated,  French 

the  debts  of  the  firm  by  a  special  con-  v.  French,  2  Man.  &  G.  644,  and  Lemere 

tract,  and  the  burden  of  proof  is  on  the  v.  Elliott,  6  Hurlst.  &  N.  656. 

334 


■CHAP,  ir.,  §  III. J  INCOMING    PARTNERS.  210=^ 

wards,  although  payments  have  been  made  since  he  joined  the  firm 
sufficient  to  liquidate  that  part  of  the  account  for  which  he  is 
directly  responsible,  (x) 

^     ^  *2.   Termination  of  liability. 

When  a  partner's  liability  ends. — Before  examining  the  circum- 
stances wiiich  put  an  end  to  a  partner's  liability  to  creditors  of  the 
firm,  it  is  necessary  to  draw  attention  to  the  distinction  between  a 
partner's  liability  for  what  may  be  done  after  his  copartners  have 
ceased  to  be  his  agents  and  his  liability  for  what  may  have  been 
done  whilst  their  agency  continued.  It  is  obvious  that  there  may 
be  many  circumstances  which  have  no  effect  upon  a  liability  already 
accrued,  but  which,  nevertheless,  may  prevent  any  liability  for  what 
is  not  yet  done  from  arising ;  and  in  order  to  determine  with  ac- 
curacy the  events  which  put  an  end  to  a  partner's  liability  to  cred- 
itors, it  is  necessary  to  distinguish  his  liability  for  the  future  from 
his  liability  for  the  past. 

a.    Termination  of  liability  as  to  future  acts. 

A  partner's  agency  ends  by  notice. — The  agency  of  each  partner 
in  an  ordinary  firm,  and  his  consequent  power  to  bind  the  firm,  i.  e., 
himself  and  his  copartners,  may  be  determined  by  notice  at  any 
time  during  the  continuance  of  the  partnership  ;  [y)  for  his  power 
to  act  for  the  firm  is  not  a  right  attaching  to  him  as  partner  inde- 
pendently of  the  will  of  his  copartners,  and  although  any  stipula- 
tions amongst  the  partners  themselves  will  not  affect  non-partners 
who  have  not  notice  of  them,  yet  if  any  person  has  notice  that  one 
member  of  the  firm  is  not  authorized  to  act  for  it,  that  person  can- 
not hold  the  firm  liable  for  anything  done  in  the  teeth  of  such 
notice,  (z) 

With  one  or  two  exceptions,  which  will  be  mentioned  presently, 

(x)  See  Beale  v.  Caddick,  2    Hurlst.  227;    Willis   v.   Dyson,    1   Stark.    164; 

&  N.  326,  and  Scott  v.  Beale,  6  Jiir.  (N.  Rooth  i-.  Quinn,  7  Price  193;  Galway  v. 

S.)  559,  noticed  infra,  under  the  head  of  Mathevv,  1  Camp.  402,  and  10  East  264. 

""Appropriations  of  Payments."  (z)  This  subject  has  been  already  dis- 

(y)  See  Vice  v.  Fleming,  1  You.  &  J.  cussed.     See  ante  p.  *170,  et  seq. 

335 


210*  TERMINATION   OF   LIABILITY  [bOOK   II., 

the  agency  of  each  partnei'  and  his  consequent  power  to  bind  his 
copartners  can  only  be  effectually  determined  by  giving  notice  of 
its  revocation.  The  authority  imputed  to  each  partner  must  con- 
tinue until  some  event  happens  to  put  an  end  to  it,  and  this  event 
ought  to  be  as  generally  known  as  that  wiiich  conferred  the  au- 
thoritv  upon  *him.     The  same  reason  which  leads  to  the  ^ 

'  •  r*2ii 

imputation  of  the  power  to  act  for  the  firm  at  all,  demands  ^ 

that  such  power  shall  be  imputed  so  long  as  it  can  be  exercised  and 

is  not  known  to  have  been  determined,  (a)  12 

To  this  principle  there  are  exceptions,  which  may  be  conveni- 
ently disposed  of  before  the  principle  itself  and  its  application  are 
discussed. 

1.  Efed  of  death. — When  a  partner  dies,  notice  of  death  is  not 
requisite  to  prevent  liability  from  attaching  to  the  estate  of  a  de- 
ceased partner,  in  respect  of  what  may  be  done  by  his  copartners 

(a)  As  to  the  liability  of  an  outgoing  partners  for  its  continuance,  either  dis- 

partner  for  the  acts  of  his  late  partners  solve  the  partnership  or  extricate  him- 

and  a  new  partner,  see  Scarf  v.  Jardine,  self  from  the  responsibilities  of  a  part- 

7  App.  Cas.  345,  noticed   ante  pp.  *46,  ner,  either  in  respect  to  his  associates  or 

*197.  to    third   persons  ;  but  the  partnership 

12.  Partner's   agency  ends  by  no-  may  be  put  an  end  to  by  the  act  of  God, 

tice. — Where  a  firm  is  formed  for  an  in-  or  by  operation  of  law — e.  g.,  by  death 

definite  time  either  partner  may  with-  or  bankruptcy,  see  Pearpoint  v.  Graham, 

draw  at  his  will,  provided  he  does  so  4  Wash.  (U.  S.)  232. 

without  fraudulent  purpose.     Fletcher  v.  Where  property  was  bailed  to  a  part- 

Eeed,  131  Mass.  312.  nership   for   no   definite  time,  and  the 

Where  a  partner  abandons  the  busi-  bailor   could   have    removed   it   at   his 

ness  and  property  of  the  firm,  and  writes  pleasure,  one  of  the  partners,  upon  retir- 

to  his  copartners,  refusing  to  join  in  a  ing  from  the  partnership,  may  give  the 

settlement  of  the  partnership  business,  bailor  notice  of  his  retiring  and  require 

and  telling  them  to  settle  as  they  please,  him  to  remove  the  property,  and  absolve 

and  they  form  a  new  firm,  and  transfer  himself  from   any  liability  for   loss  of 

the  property  of  the  old  firm  to  the  new,  property  occurring  after  his  retirement, 

the  dissolution  will  be  complete.     Blake  Winston  ».  Taylor,  28  Mo.  82. 

V.  Sweeting  (111.),  12  N.  E.  Rep.  67.  One  member  of  a  firm  gave  notice  to 

A  partnership  is  terminated  by  a  posi-  his  copartner   that   the   connection  be- 

tive  refusal  of  one  of  the  partners  further  tween  them  was  dissolved,  but  this  was 

to  recognize  it  or  to  do  anything  under  not  assented  to  by  the  copartner,  and  the 

it.     Ligare  v.  Peacock,  109  111.  94.  parties  did  not  afterwards  act  upon  it. 

That   one   partner   cannot,    by   with-  Held,  that  it  did  not  operate  a  dissolution 

drawing   himself   from  the  association  of  the  firm.     Sanderson  v.  Milton  Stage 

before  the  period  stipulated  between  the  Co.,  18  Vt.  107. 

336 


CHAP.  II.,  §  III.]  AS    TO    FUTURE    ACTS. 


211^ 


after  his  decease,  (6)  for,  by  the  law  of  England,  the  authority  of 
an  agent  is  determined  by  the  death  of  his  principal,  whether  the 
fact  of  death  is  known  or  not.  (c) 

The  death  of  one  partner  does  not,  however,  determine  an  au- 
thority given  by  the  firm  through  him  before  his  death,  and  conse- 
quently, if  after  his  death  such  an  authority  is  acted  on,  the  sur- 
viving partners  will  be  liable  for  it.  In  Usher  v.  Dauncey(d)  bills 
were  drawn  and  endorsed  in  blank  by  a  partner  in  the  name  of  the 
firm,  and  were  given  by  him  to  a  clerk  to  be  filled  up  and  negoti- 
ated as  occasion  might  require.  The  partner  in  question  died,  and 
after  his  death,  and  after  the  name  of  the  firm  had  been  altered, 
one  of  the  bills  was  filled  up  and  negotiated.  Lord  Ellenborough 
held  that  the  bill  was  bindi-Ag  on  the  surviving  partners,  consid- 
ering that  the  power  to  fill  up  the  bill  emanated  from  the  partner- 
ship, and  not  from  the  individual  partner  who  had  died.13  ^ 

(6)  Devaynesv.  Noble,  Hn-jlton's  case,    his  death.     Scholefield  v.  Eichelberger, 

supra.  S.  P.,  Burwell  v.  Mandeville,  2 
How.  (U.  S.)  560.  And  a  court  of  equity 
may  authorize  the  continuance  of  a 
partnership  after  the  death  of  a  partner, 
on  behalf  of  infants.  Powell  v.  North, 
3  Ind.  392. 

Contracts  for  the  services  of  attorneys 
who  are  partners  entitle  the  client  to  the 
service  of  each  partner,  and  are  deter- 
mined by  the  death  of  either  partner. 
McGill  V.  McGill,  2  Mete.  (Ky.)  258. 

Under  a  special  contract  to  that  effect, 


1  Mer.  616;  Johne's  Case,  Id.  619; 
Brice's  Case,  Id.  620 ;  Webster  i'.  Web- 
ster, 3  Swanst.  490 ;  See  Vulliamy  v. 
Noble,  3  Mer.  614 ;  Brown  v.  Gordon, 
16  Beav.  302,  as  to  the  power  of  surviv- 
ing partners  who  are  the  executors  of 
the  deceased  partner,  to  bind  his  estate. 

(c)  See  Blades  v.  Free,  9  Barn.  &  C. 
167  ;  Smout  v.  Ilbery,  10  Mees.  &  W.  1 ; 
Campanari  v.  Woodburn,  15  C.  B.  400. 

(c^)  4  Camp.  97. 

13.  Effect  of  death  or  marriage  to 
end  liability. — The  death  of  a  partner    a  commercial  partnership  will  continue 
dissolves  the  partnership,  unless  there  is    after  the  death  of  one  of  the  partners. 


an  express  stipulation  to  the  contrary. 
Scholefield  v.  Eichelberger,  7  Pet.  (U.  S.) 
586;  Knapp  v.  McBride,  7  Ala.  19; 
Goodburn  v.  Stevens,  5  Gill  (Md.)  1 ; 
Williamson  v.  Wilson,  1  Bland  (Md.) 
418  ;  Ames  v.  Downing,  1  Bradf.  (N.  Y.) 
321 ;  Gratzi'.  Bayard,  11  Serg.  &  R.  (Pa.) 
41  ;  Davis  v.  Christian,  15  Gratt.  (Va.) 


for  the  purpose  of  administration  and 
liquidation,  if  not  for  all  purposes.  Pow- 
ell V.  Hopson,  13  La.  Ann.  626. 

So,  also,  a  partnership  is  dissolved  by 
a  marriage  of  the  two  partners.  Bassett 
V.  Shepardson,  52  Mich.  3. 

In  Crawshay  v.  Maule  (1  Swanst.  495, 
509)    Lord  Eldon  said:  "The  doctrine 


11.     But  the  liability  of  a  copartner,  as  that  death  or  notice  ends  a  partnership 

well   as  his  interest  in  the  profits  of  a  has  been  called  unreasonable.     It  is  not 

concern,  may,  by  contract,  be  extended  necessary  to  examine  that  opinion ;  but 

against  and  in  favor  of  his  estate,  beyond  much  remains  to  be  considered  before  it 

337  22 


211*  TEKMINATION    OF    LIABILITY  [bOOK    IL, 

Contribution  after  death. — ]Moreover,  it  does  not  follow  that  be- 
cause a  creditor  has  no  remedy  against  the  estate  of  a  deceased 
partner  in  respect  of  debts  contracted  by  his  copartners  since  his 
death,  his  estate  is  not  liable  to  contribute  to  such  debts  at  the  suit 

-.  ^-,  of  the  *survivino;  partners.  That  is  a  diiferent  matter 
"-'  altogetiier,  and  depends  on  the  agreement  into  which  he 
entered  with  his  copartners,  as  will  be  seen  hereafter  when  the 
subject  of  dissolution  is  under  consideration,  (e)  14 

2.  Effect  of  bankruptcy. — When  a  firm  becomes  bankrupt,  the 
authority  of  each  member  to  act  for  the  firm  at  once  determines. 
If  one  partner  only  becomes  bankrupt,  his  authority  is  at  an  end, 
and  his  estate  cannot  be  made  liable  for  the  subsequent  acts  of  his 
solvent  copartners.  At  the  same  time,  if,  notwithstanding  the 
bankruptcy  of  one  partner,  the  others  hold  themselves  out  as  still 
in  partnership  with  him,  they  will  be  liable  for  his  acts,  as  if  he 

can  be  approved.  If  men  will  enter  14.  Contribution  after  death.— By 
into  a  partnership,  as  into  a  marriage,  the  general  rule  of  law,  every  partner- 
for  better  and  worse,  they  must  abide  by  ship  is  dissolved  by  the  death  of  one  of 
it;  but  if  they  enter  into  it  without  say-  the  partners;  but  a  partner  may,  by  his 
ing  how  long  it  shall  endure,  they  are  will,  provide  that  the  partnership  shall 
understood  to  take  that  course  in  the  ex-  continue,  notwithstanding  his  death,  and 
pectation  that  circumstances  may  arise  if  it  be  assented  to  by  the  surviving 
in  which  a  dissolution  will  be  the  only  partner,  it  becomes  obligatory.  Burwell 
means  of  saving  them  from  ruin;  and  v.  Mandeville,  2  How.  (U.  S.)  560. 
considering  what  persons  death  might  On  the  decease  of  a  partner,  his  inter- 
introduce  into  the  partnership,  unless  it  est  in  real  estate,  belonging  to  the  part- 
works  a  dissolution,  there  is  strong  reason  nership,  descends  to  his  heirs-at-law, 
for  saying  that  such  should  be  its  eflect.  subject  to  the  debts  of  the  partnership. 
Is  the  surviving  partner  to  receive  into  Piatt  i'.  Oliver,  3  McLean  (U.  S.)  27. 
the  partnership,  at  all  hazards,  the  ex-  The  estate  of  a  deceased  partner  is 
ecutor  or  administrator  of  the  deceased,  liable  for  partnership  debts,  if  the  sur- 
his  next  of  kin,  or  possibly  a  creditor  viving  partner  be  insolvent.  Caldwell 
taking  administration,  or  whoever  claims  v.  Stileman,  1  Eawle  (Pa.)  212. 
by  representation,  or  assignment  from  A  partner  dying,  and  leaving  in  his 
his  representative  ?"  administrator's  hands  partnership  and 
(e)  For  instances  where  the  estate  of  separate  property,  the  partnership  cred- 
a  deceased  shareholder  has  been  held  itors  and  the  separate  creditors  are  to  be 
liable  to  contribute  to  debts  incurred  paid  pari  passu  from  their  respective 
since  his  decease,  see  Baird's  Case,  5  Ch.  funds,  and  then  the  balance  of  the  sep- 
725  ; .  Blakeley's  Executor's  Case,  3  arate  property  is  to  be  equally  divided 
Macn.  &  G.  726 ;  Hamer's  Devisees'  among  them  pro  rata.  Bell  v.  Newman, 
Case,  2  De  G.,  M.  &  G.  366.  5  Serg.  &  R.  (Pa.)  78. 

338 


€HAP.  II.,  §  III.]  AS   TO    FUTURE    ACTS. 


212^ 


-and  they  were  partners,  (/)  and  although  the  estate  of  a  bankrupt 
partner  does  not  incur  liability  for  the  acts  of  the  other  partners 
done  since  the  bankruptcy,  yet  the  solvent  partners  have  power  to 
bring  the  partnership  transactions  to  an  end,  and  to  dispose  of  the 
partnership  property.  Tliis  subject  will  be  examined  hereafter  in 
the  chapter  on  ''Bankruptcy,"  to  which  the  reader  is  therefore  re- 
ferred, {g)  15 

3.  Eff'ect  of  retirement  of  dormant  ijartner. — Another  apparent, 
but  not  real,  exception  to  the  rule  is  that  if  a  dormant  partner, 
i.  e.,  one  not  known  to  be  a  partner,  (A)  retires,  the  authority  of 
his  late  partners  to  bind  him  ceases  on  his  retirement,  although  no 
notice  of  it  be  given.  But  this  is  because  he  never  was  known  to 
be  a  partner  at  all,  and  the  reason  for  the  general  rule  has  there- 
fore no  application  to  his  case.     The  following  decisions  illustrate 


(/)  See  Lacy  v.  Woolcott,  2  Dowl.  &    the  payment  of  his  debts  by  one  of  the 


H.  458. 

(g)  See  Fox  v.  Hanbury,  Cowp.  445  ; 
Morgan  v.  Marquis,  9  Ex.  145. 

15.  Effect  of  bankruptcy  or  insolv- 
ency.— The  mere  insolvency  of  a  co- 
partnership  is    sufficient    to    defeat   an 


partners  who  has  become. insolvent,  dis- 
solves the  partnership,  and  the  other 
partner  may  settle  up  the  partnership 
aflfairs.  Odgen  v.  Arnot,  29  Hun  (N.  Y.) 
146. 

Tiie  bankruptcy  of  one   partner  dis- 


attachment  made  by  a  creditor  of  one  of  solves -the  firm  only  so  far  as  to  prevent 

the  firm,  although  the  partnership  cred-  the  making  of  new  contracts  and  the  in- 

itors  have  commenced  n-o  action  for  the  curring    of  new    obligations,  confining 

recovery   of    their   debts.     Commercial  the  firm  to  the  completion  of  unfinished 

Bank  v.  Wilkins,  9  Me.  28.  business  necessary  to  the  winding  up  of 

An  assignment  of  partnership  prop-  its  affairs.  The  assignee  in  bankruptcy 
erty  for  the  benefit  of  creditors,  which  of  such  partner  becomes  a  tenant  in 
is  void  for  wan4;  of  conformity  with  common  with  other  partners,  entitled  to 
statute  requirements,  will  not  work  a  an  accounting  and  to  receive  the  bank- 
dissolution  of  the  partnership.  Sim-  rupt's  share  when  the  former  business  is 
mons  V.  Curtis,  41  Me.  373.  settled.      Such    accounting  may,  at  his 

Simple  insolvency,  without  stoppage  option,  include  profits  realized  from  new 

of  payment,  or  assignment,  or  any  judi-  business  carried  down  with   the   assets 

cial  process,  does  not  work  a  dissolution  of  the  firm.     King  v.  Leighton,  100  N. 

of  the  partnership  or  divest  tlie  partners  Y.  386. 

of  their  dominion  over  the  partnership        {h)  A  dormant  partner   known   to  a 

property.     Siegel  v.  Chidsey,  28  Pa.  St.  few  persons  to  be  a  partner  is  not  dor- 

279;  Arnold  v.  Brown,  24  Pick.  (Mass.)  mant  as  to  them;    see  the  cases  cited 

89.  infra,  note  {r). 

The  assignment  of   his  property  for 

339 


212*  TERMIXATIOX    OF    LlAl'.lLITY  [BOOK    II., 

this  exception :  In  Carter  v.  Whalley  (i)  the  defentlant  Saunders 
was  a  partner  in  the  "  Plas  Madoc  Colliery  Co.,"  but  there  was 
nothing  to  show  that  the  plaintiff  or  the  public  ever  knew  that 
such  was  tiie  case.  Saunders  withdrew  from  the  company,  but  no 
notice  of  his  withdrawal  was  given  either  to  the  plaintiff  or  to  the 
pui)li('.  After  his  withdrawal,  the  company  became  indebted  to 
*the  plaintiff,  and  it  was  held  that  Saunders  was  not  liable  r-^^^  ^ 
for  the  debt ;  because  the  name  of  the  company  gave  no 
information  as  to  the  parties  composing  it,  and  Saunders  himself 
was  not  known  either  to  the  plaintiff  or  to  the  public  to  have  be- 
longed to  the  company  before  he  withdrew. 

In  Heath  v.  Sansom  {k)  the  defendants,  Sansom  and  Evans,  carried 
on  business  as  partners  under  the  style  of  Philip  Sansom  &  Co.,  but 
Evans  was  not  known  to  be  a  partner.  They  dissolved  partnership 
by  mutual  agreement,  but  did  not  notify  the  fact.  After  the  dissolu- 
tion, Sansom  gave  the  plaintiff  a  promissory  note  on  which  he  sued 
Sansom  and  Evans.  The  court  decided  that  Evans  was  not  liable, 
for  when  his  right  to  share  profits  ceased  he  could  not  be  held 
responsible  for  the  subsequent  acts  of  his  copartner  unless  he  au- 
thorized those  acts  or  held  himself  out  as  still  connected  with  him, 
and  he  had  done  neither.  (/)  16 

Effect  of  lunacy. — With  the  three  exceptions  which  have  been 
noticed,  the  general  proposition  above  stated  holds  good.  Thus,  if 
a  partner  becomes  lunatic  and  his  lunacy  is  not  apparent  or  made 

{i)  1  B.  &  Ad.  11.  mitted  into  an  existing  firm  doing  biisi- 

{k)  4  B.  &  Ad.  172.  ness  under  a  fixed  firm  name,  in  which 

[1)  See,  too,  E.vans   v.  Drummond,  4  no  change  is  made,  such  new  partner  is 

Esp.  89.     This   doctrine   seems   not   to  to  be  deemed  a  dormant  partner,  unless 

apply  to  Scotland.     See  Hay  v.  Mair,  3  his  connection  with  the  firm  is,  in  some 

Ross'  Lead.  Cas.   on   Com.   Law.    639.  way,  by  publication  or  otherwise,  made 

The  case  of  the  Western  Bank  of  Scot-  known  to  the  public.     Phillips  v.  Nash, 

land  V.  Xeedell,  1  Fost.  &  F.  461,  seems  47  Ga.  218. 

at  first  sight  opposed  to  the  authorities  One  who  is  a  member  of  a  partnership 
in  the  text,  but  it  is  conceived  that  in  trading  under  the  firm  name  of  R.  M. 
that  case  there  must  have  been  evidence  &  Co.,  does  not  become  a  dormant  part- 
to  show  that  the  defendant  was  known  ner,  by  reason  of  the  creditor  being 
to  the  plaintifTs  to  have  been  a  partner  ignorant  of  the  name  of  the  copartner 
before  he  retired.  of  R.  M.     Deford  v.  Reynolds,  36  Pa. 

16.  Effect  of  retirement  of  dormant  St.  325. 
partner. — Wliere  a  new  partner  is  ad- 

340 


CHAP.  II.,  §  III.]  AS   TO    FUTUEE   ACTS. 


213* 


known,  his  power  to  bind  the  firm  and  his  liability  for  the  acts  of 
his  copartners  (??i.)  will  remain  unaffected. 17 

Effect  of  dissolution  of  which  no  notice  is  given. — So,  if  a  part- 
nership is  dissolved,  or  one  of  tl>e  known  members  retires  from  the 
jfirm,  until  the  dissolution  or  retirement  is  duly  notified,  the  power 
of  each  to  bind  the  rest  remains  in  full  force,  although,  as  between 
the  partners  themselves,  a  dissolution  or  a  retirement  is  a  revocation 
of  the  authority  of  each  to  act  for  the  others.  (?i)  Thus,  if  a  known 
partner  *retires  and  no  notice  is  given,  he  will  be  liable  to 


'214] 


be  sued  in  respect  of  a  promissory  note  made  since  his 


retirement  by  his  late  partner,  even  though  the  plaintiff  had  no 
dealings  with  the  firm  before  the  making  of  the  note,  (o)  And  in 
determining  whi^ch  was  first  in  point  of  time,  viz.,  notice  of  the  dis- 
solution or  the  making  of  the  note,  effect  must  be  given  to  the  pre- 
sumption that  the  instrument  was  made  and  issued  on  the  day  it 
bore  date,  unless  some  reason  to  the  contrary  can  be  shown,  (p)  18 


(m)  See   Molton  v.  Camroux,  2   Ex.  [p)  See  Anderson  v.  Weston,  6  Bing. 

487,  and  4  Id.  17 ;  and  Baxter  v.  The  N.  C.  296. 

Earl  of  Portsmouth,  5  Barn.  &  C.  170,  18.  Effect  of  dissolution  of  which 

and  the  cases  cited  post,  book  IV.,  ch.  1,  no  notice  is  given. — The  general  rule 

^  2,  to  show  that  the  lunacy  of  one- part-  is  that  where  no  notice  of  dissolution  is 

ner   does   not  dissolve   the   firm.      See  given,  the  persons  who   composed   the 

further  on  this  subject,  Story  on  Agency,  firm   continue  liable   to   creditors  who 

I  481,  and  note  there.     See,  also.  Drew  were  ignorant  of  the  change  in  the  firm. 

V.  Nunn,  4  Q.  B.  D.  661.  The  following  cases  fully  illustrate  this 

17.  Effect  of  lunacy. — An   inquisi-  principle:  Amidown  v.  Osgood,  24  Vt. 

tion  of  lunacy,  found  against  a  member  278;    Bradley  v.  Camp,  Kirby  (Conn.) 


of  a  partnership,  ipso  facto  dissolves  the 
partnership.  Isler  v.  Baker,  6  Humph. 
(Tenn.)  85. 


77 ;  Benjamin  v.  Covert,  2  N.  W.  Eep. 
(N.  S.)  625 ;  Buffalo  City  Bank  v.  How- 
ard, 35  N.  Y.  500 ;  Bernard  v.  Torrance, 


[n)  See  Mulford  v.  Griffin,  1  Fost.  &  5  Gill  &  J.  (Md.)    383;   Dickinson   v. 

F.  145;   Faldo  v.  Griffin,  Id.  147,  and  Dickinson,  25  Gratt.  (Va.)  321;  Grady 

the  cases  in  the  next  note.  v.  Robinson,  28  Ala.  289;  Heroy  v.  Van 

(o)  See  Parkin  v.  Carruthers,  3  Esp.  Pelt,  4  Bosw.  (N.  Y.)  60;  Hunt  v.  Hall, 

248  ;  Williams  v.  Keats,  2  Stark.  290 ;  8  Ind.  215 ;  Howell  v.  Adams,  68  N.  Y. 


Brown  v.  Leonard,  2  Chitty  120;  Dol- 
man V.  Orchard,  2  Car.  &  P.  104,  in 
which  last  three  cases,  however,  there 
was  a  continual  holding  out.  See,  as  to 
■ordering  such  a  bill  to  be  delivered  up, 
Byan  v.  Mackmath,  3  Bro.  C.  C.  15. 


314;  Kennedy  v.  Bohannon,  11  B.  Mon. 
(Ky.)  118;  Ketcham  v.  Clarke,  6  Johns. 
(N.  Y.)  144;  Lamb  v.  Singleton,  2  Brev. 
(S.  C.)  490;  Merritt  v.  Pollys,  16  B. 
Mon.  (Ky.)  355;  Newcomet  v.  Brotz- 
man,  69  Pa.   St.    185 ;    Princeton,  &c., 


341 


214=' 


TERMINATION   OF    LIABILITY 


[book    II., 


Torts  after  dissolution. — A  partner  who  retires  and  does  not  give 
sufficient  notice,  exposes  himself  to  the  risk  of  being  sued  for  torts 


Turnpike  Co.  v.  Gaiick,  1  Harr.  (N.  J.) 
161 ;  Price  v.  Tuvvset,  3  Litt.  (Ky.)  423  ; 
Scluirten  v.  Davis,  21  La.  Ann.  173; 
Southern  v.  Grim,  67  111.  106 ;  Spears  i'. 
Toland,  1  A.  K.  Marsh.  (Ky  )  203; 
Soutiiwick  V.  McGovern,  28  Iowa  533 ; 
Tabb  V.  Gist,  1  Brock.  (U.  S.)  33; 
Thurston  v.  Perkins,  7  Mo.  29.  See, 
also,  Woodruff?;.  King,  47  Wis.  261. 

To  establish  the  liability  as  partners 
of  defendants  who  have  dissolved  part- 
nership, it  must  appear :  1,  that  the 
plaintiff,  at  the  time  the  contract  was 
made  under  which  his  account  accrued, 
knew  that  the  defendants  had  been  in 
partnership  ;  2,  that  he  was  ignorant  of 
their  dissolution ;  and  3,  that  he  made 
the  contract  supposing  he  was  contract- 
ing with  the  defendants  as  partners,  and 
in  reliance  upon  their  joint  liability. 
Pratt  V.  Page,  32  Vt.  13;  Benton  v. 
Chamberlain,  23  Vt.  711. 

Its  scope  and  extent. — Where,  after 
dissolution,  one  of  the  partners  gives  a 
note  in  the  individual  names  of  both, 
for  goods  sold  to  him  on  the  credit  of 
the  firm,  the  note  binds  both  partners  if 
the  seller  of  the  goods  did  not  know  of 
the  dissolution.  Iddings  v.  Pierson,  100 
Ind.  418. 

Where  one  of  three  partners  retires 
from  or  a  new  partner  comes  into  the 
firm,  or  both,  and  notice  thereof  is  given, 
but  the  business  continues  to  be  carried 
on  in  other  respects  as  before,  those  part- 
ners as  to  whom  no  notice  was  given 
will  be  presumed  to  hold  the  same  rela- 
tion to  the  concern  afterwards  that  they 
did  before.  Howe  v.  Thayer,  17  Pick. 
(Mass.)  91. 

Where  notice  of  dissolution  has  not 
been  published  in  a  newspaper,  or 
brought  home  to  the  knowledge  of  the 


party  to  be  affected  by  it,  evidence  of 
the  mere  notoriety  of  the  dissolution  is 
not  admissible  to  prove  such  notice. 
Pitcher  v.  Barrows,  17  Pick.  (Mass.)  361. 

Where  it  is  material  to  know  the  ex- 
act time  of  dissolution,  evidence  that  one 
had  notice  of  such  dissolution  at  a  cer- 
tain time  is  not  admissible.  Shaffer  v. 
Snyder,  7  Serg.  &  K.  (Pa.)  503. 

Notice  of  dissolution  may  be  shown 
either  by  direct  or  circumstantial  evi- 
dence, sufficient  to  establish  the  fact  that 
the  person  seeking  to  enforce  the  part- 
nership liability  knew  of  the  dissolution. 
Laird  v.  Ivens,  45  Tex.  622.  See,  also^ 
Lovejoy  v.  Spafford,  93  U.  S.  430 ;  Cod- 
dington  v.  Hunt,  6  Hill  (N.  Y.)  595  ;. 
Mauldin  v.  Branch  Bank,  2  Ala.  502. 

Want  of  notice  of  a  dissolution  will 
charge  the  firm  on  a  subsequent  accom- 
modation endorsement,  the  holder  hav- 
ing had  previous  dealings  with  the  firm, 
in  the  same  manner  as  if  the  firm  eon- 
tinued  to  exist.  Dundass  v.  Gallagher, 
4  Pa.  St.  205. 

Its  limits  and  exceptions. — A  per- 
son who  takes  a  partnership  note,  know- 
ing that  the  partnership  articles  provide 
for  its  dissolution  in  case  of  the  with- 
drawal of  the  capital,  is  put  upon  in- 
quiry as  to  whether  such  dissolution  has 
taken  place.  Smith  v.  Vanderburg,  46 
111.  34. 

The  principle  that  after  a  partnership' 
is  dissolved,  one  partner,  dealing  with  a 
person  who  has  no  notice  of  the  dissolu- 
tion, may  bind  his  copartner,  applies 
only  to  transactions  in  the  usual  course 
of  business.  Whitman  v.  Leonard,  3- 
Pick.  (Mass.)  177. 

A  member  of  a  firm  who  retired  there- 
from without  publishing  notice  of  the 
dissolution,  is  not  liable  on  a  note  signed 

i42 


CHAP.  II.,  §  III.] 


AS    TO    FUTURE    ACTS. 


214^ 


committed  subsequently  to  his  retirement  by  his  late  copartners  or 
their  agents ;  and  in  the  absence  of  proof  of  the  true  state  of  things 
he  would  be  held  liable  for  them,  (g) 


in  the  firm  name  by  another  member, 
and  given  to  a  new  customer  eleven 
years  after  the  retirement.  Farmers', 
&c..  Bank  V.  Green,  1  Vr.  (N.  J.j  316. 

A  contract  by  a  customer  of  a  partner- 
ship, with  one  of  the  partners,  on  ac- 
count of  the  firm,  after  a  dissolution,  but 
without  notice  of  the  dissolution,  will 
not  bind  the  firm,  unless,  by  the  avoid- 
ance of  the  contract,  the  customer  would 
sufier  a  loss,  or  be  put  in  a  worse  situa- 
tion than  he  would  have  been  in  had  he 
been  advised  of  the  dissolution  before 
making  the  contract.  Brisban  v.  Boyd, 
4Paige(N.  Y.)  17. 

Notice  of  dissolution  is  necessary 
where  the  outgoing  partner  holds  him- 
self out  as  the  representative  of  the  firm, 
but  not  where  he  acts  exclusively  for 
himself.  Taylor  v.  Young,  3  Watts  (Pa.) 
339. 

One  who  has  notice,  at  the  beginning 
of  a  partnership,  of  the  period  at  which 
it  will  expire,  cannot  charge  the  firm 
with  goods  sold  to  its  agent  after  that 
period.  In  such  a  case  the  dissolution 
is  a  revocation  of  the  agent's  authority. 
Schalter  v.  Winpenny,  75  Pa.  St.  321. 

Various  illustrations  of  the  forego- 
ing principles. — A  party,  after  his  with- 
drawal from  a  firm,  suffered  his  name  to 
appear  in  the  firm  name  for  some  time 
after  his  withdrawal,  and  his  name  ap- 
peared before  his  withdrawal  in  the 
business  card  of  the  firm,  published  in  a 
newspaper,  to  which  he  was  a  subscriber. 
It  appeared   he   had  admitted   that  he 


still  had  an  interest  in  tiie  firm,  and 
that  his  name  was  used  as  before,  and 
that  he  was  liable  to  the  same  extent  he 
had  been.  He  continued  for  more  than 
a  year  after  his  withdrawal  at  his  place 
in  the  firm.  No  notice  of  dissolution 
was  given.  Held,  that  from  these  facts 
the  jury  were  fully  warratated  in  finding 
him  liable  as  a  member  of  the  firm. 
Ellis  V.  Bronson,  40  111.  455. 

Two  partners  in  a  mill  and  cotton  fac- 
tory, in  a  small  town,  dissolved  their 
partnership,  and  posted  up  written  no- 
tices of  the  dissolution  in  four  or  five 
places  in  the  town.  Soon  after,  one  of 
the  partners  gave  a  note  in  the  name  of 
the  firm,  to  a  bank  in  a  town  twelve 
miles  distant.  Held,  that  the  court 
could  not  say  that  the  notice  was  suffi- 
cient, nor  disturb  a  verdict  for  the  bank, 
which  implied  a  finding  that  it  was  in- 
sufficieJit,  as  being  contrary  to  evidence. 
Mitchum  v.  Bank  of  Kentucky,  9  Dana 
(Ky.)  166. 

Where  a  note  was  signed  by  one  of  the 
members  of  a  commercial  firm,  with  the 
addition  of  the  words  "in  liquidation," 
it  was  held  that  such  a  note  was  a  notice 
to  the  payee  that  the  firm  was  dissolved, 
and  that,  without  a  special  authorization 
to  the  partner  signing  the  note  from  his 
copartner,  the  note  was  not  binding  on 
him.  Speake  v.  Barrett,  13  La.  Ann. 
479. 

Plaintiff"  sued  defendants,  as  copart- 
ners, upon  an  account  for  work  and  labor. 
It  appeared  that  defendants  were  in  part- 


[q)  Stables  v.  Eley,  1  Car.  &  P.  614.  This,  however,  was  a  wrong  application 

In  this  case  such  proof  was  given,  and  of  that  doctrine.     See  ante  p.  *47,  and 

the   defendant    was    nevertheless    held  Pollock  Dig.  (3d  ed.)  25. 
liable,  on  the  ground  of    holding   out. 


343 


214* 


TERMIXATIOX    OF    LIABILITY 


[book  II., 


Case  of  dormant  pdrttier. — Moreover,  if  a  dormant  partner  is 

known  to  certain   individuals  to  have  been  a  partner,  he  is,  as  to 

them,  no  longer  in  the  situation  of  a  dormant  partner,  and  must 

nership  till  within  a  short  time  of  nlain-  ing  a  new  connection  when  the  new  firm 

tiff's  engagement;    that  at  the  time  of  occupied  the  old  store,  and  used  the  old 

such  engagement  the  defendant,  who  ap-  firm's  books  and  collected   their  debts, 

peared  and  defended  the  action,  showed  was  not  sufficient  evidence  of  a  dissolu- 

him  his  work ;  that  the  tools  and  appa-  tion,  as  the  old  firm   might  have  been 

ratus  of  the  partnership  remained  un-  continued  for  the  purpose  of  settling  its 

changed  ;  that  the  business  was  still  car-  afTairs.     Brown  v.  Clark,  14  Pa.  St.  469. 

ried  on  in  the  partnership  name;  and  A  firm  doing   business  in  A  was  dis- 

that  nothing  was  done,  until  after  plain-  solved,  but  no  notice  of  the  dissolution 

tifT  had  rendered  his  services,  to  notify  was  published   in  a  newspaper.     About 

third  persons  that  the  partnership  was  the  time  of  the  dissolution,  B,  a  member 

dissolved.     Held,  sufficient  to  support  a  of  the  firm,  gave  a  nole  in  the  name  of 

finding  of  a  continuance  of  the  partner-  the  firm  to  a  bank  at  C,  which  note  was, 

ship  as  to  third  persons.    Eeid  v.  Frazer  after  ,  the   dissolution,    renewed    by   an 

(Minn.),  35  N.  W.  Kep.  269.  agent  acting  under  a  sealed   power  of 

After  the  dissolution  of  a  firm,  and  an  attorney  given  by  B  in  the  name  of  the 

assignment  of  its  property,  a  debtwr  set-  firm.     Held,  that  the  notice  of  the  disso- 

tled    with  one  of  the   partners,  without  lution    was   insufiicient,   so   far   as    the 

actual  notice  of  the  assignment.     Held,  bank  at  C  was  concerned  ;  that  the  firm 

that  the  settlement  was  binding  on  the  were  liable  on  the  note,  whether  given 

assignee,  because   one   partner  has  au-  before  or  after  the  dissolution ;  that,  if 

thority  to  settle  firm  debts,  after  dissolu-  the  renewal  was  void,  the  bank  liad  the 

tion,  in  the  absence  of  an  agreement  to  right  to  recover  on   the  original  note, 

the  contrary  known  to  the  debtor,  and  which  it  had  retained ;   that  an  assignee 

because  the  dissolution  was  not  suflBcient  of  the  firm,  for  the  payment  of  the  debts 

to  put  the  debtor  on  inquiry  as  to  whether  thereof,  had  properly  paid  this  debt  to 

there  was  any  such  agreement  or  any  as-  the  bank,  although  he,  the  assignee,  may 

signment.      Huntington    v.    Potter,    32  have  had  the  requisite  notice  of  the  dis- 

Barb.  (N.  Y.)  300.  solution,   and   that   the   debt   was  con- 

A  brought  an  action  as  endorsee  on  a  tracted  afterwards.  Hammond  v.  Aiken, 
note  ma<ie  in  October,  1886,  in  renewal  3  Rich.  (S  C.)  Eq.  119. 
of  a  note  made  in  July,  1834,  by  the  A,  a  stage  proprietor,  engaged  B  to 
firm  of  B  &  C.  B  had  formed  a  part-  board  a  person  in  A's  employment.  Af- 
nership  with  D  in  January,  1834,  but  terwards  A  sold  half  his  interest  in  the 
the  new  firm  retained  the  books  of  B  &  stage  property  to  C,  and  A  and  C  be- 
C,  and  collected  their  debts.  Held,  that  came  partners.  The  person  so  in  the 
the  liability  of  a  member  of  the  firm  to  employment  of  A  continued  in  the  em- 
pay  the  note  depended  on  their  partner-  ployment  of  the  partners,  and  continued 
ship  when  the  first  note  was  given ;  that  to  board  with  B ;  but  no  notice  was  given 
to  show  their  dissolution,  so  as  to  take  to  B  of  the  terms  of  said  partnership, 
away  B's  rights,  some  notice  to  B  must  nor  was  B  informed  by  A  that  he  should 
be  clearly  proven  ;  that  the  fact  of  form-  not   pav  such  person's  board  after  the 

34-4 


•CHAP.  II.,  §  III.]  AS   TO   FUTURE   ACTS.  214* 

therefore  g-ive  them  notice  of  his  retirement  if  he  would  free  him- 
self  from  liability  in  respect  of  the  future  transactions  between 
them  and  his  late  partners,  (r)  19 


formation  of  said  partnership.  Held, 
that  B  might  recover  against  A  after  the 
formation  of  the  partnership  as  well  as 
before.     Taggart  v.  Phelps,  10  Vt.  318. 

Where  the  plaintiffs,  who  were  law- 
yers, drew  a  writ  in  favor  of  three  per- 
sons, who  had  been  partners,  describing 
one  of  them  as  late  partner  of  a  certain 
firm,  it  was  held  that  this  was  sufficient 
proof  that  the  plaintiffs,  at  the  time  of 
the  drawing  of  the  writ,  knew  that  the 
one  described  as  late  partner  had  ceased 
to  be  a  member  of  the  firm.  Gaboon  v. 
Hobart,  38  Vt.  244. 

A  partnership  in  Mobile,  Ala.,  was 
broken  up  by  violence,  which  was  noto- 
rious, and  public  notice  of  the  dissolu- 
tion was  given.  The  following  year  one 
of  the  partners  set  up  business  under  the 
same  firm  name,  which  indicated  by 
name  only  himself,  in  Milwaukee,  and 
dealt  with  persons  in  New  York  wlio 
had  formerly  dealt  with  the  old  firm  in 
Mobile ;  upon  one  of  his  notes  these 
New  York  dealers  strove  to  hold  his 
former  partners  in  Mobile  liable.  Held, 
ihat  the  circumstances  of  the  case  were 
such  as  to  put  the  New  York  dealers 
upon  their  inquiry,  and  that  they  could 
not  be  allowed  to  hold  the  defendant. 
"Clapp  V.  Upson,  12  Wis.  492. 

In  an  action  upon  a  partnership  note, 
it  was  shown  that  the  partnership  was 
dissolved  prior  to  the  execution  of  the 
note,  but  that  no  notice  of  such  dissolu- 
tion was  given  to  the  payee.  Held,  that 
in  the  absence  of  such  notice,  all  the 
members  of  the  firm  were  chargeable, 
notwithstanding  the  dissolution.  Clem- 
ent V.  Clement  (Wis),  35  N.  W.  Eep.  17. 

(r)  Farrar  v.  Defline,  1  Car.  &  K. 
580.     See,  too,  Evans  v.  Drummond,  4 


Esp.  89,  and  Carter  v.  Whalley,  1  B.  & 
Ad.  14. 

19.  Should  dormant  partner  give  no- 
tice of  dissolution  ? — A  dormant  part- 
ner is  not  bound  to  give  notice  of  disso- 
lution. Scott  V.  Colmesnil,  7  J.  J.  Marsh. 
(Ky.)  416;  MagiUt'.  Merrie,  6  B.  Mon. 
(Ky.)  168;  Deford  v.  Keynolds,  36  Pa. 
St.  325.  But  see  Park  v.  Wooten,  35 
Ala.  242. 

A  retiring  dormant  partner  owes  a 
duty  to  those  who  before  his  retirement 
had  some  knowledge  of  his  connection 
with  the  firm,  to  give  them  notice  of 
dissolution  ;  but  he  owes  no  such  duty 
to  strangers  who  are  ignorant  of  his 
connection  with  the  firm.  Nusstaumer 
V.  Backer,  87  111.  281 ;  Cregler  v.  Dur- 
ham, 9  Ind.  375;  Warren  v.  Ball,  37 
111.76. 

A  partner  who  was  known  to  be  a 
member  of  the  firm,  upon  retiring  from 
the  firm,  must  publish  notice  of  such 
retirement,  in  some  newspaper  where 
advertisements  are  inserted,  and  pub- 
lished in  the  place  where  the  business 
is  done,  in  order  to  shield  himself  from 
liability  for  the  future  debts  of  the  firm, 
to  those  even  with  whom  they  had  no 
previous  dealings.  Simonds  v.  Strong, 
24  Vt.  642 ;  Martin  v.  Searles,  28  Conn. 
43. 

A  partner  whose  name  has  not  ap- 
peared in  the  firm  will  be  liable  to  per- 
sons dealing  with  the  partnership  after 
his  retirement  from  it,  if  he  was  known 
to  such  persons  as  a  member  of  the  firm, 
either  by  direct  transactions  or  public 
notoriety,  and  they  have  not  been  noti- 
fied of  the  dissolution  of  the  connection. 
Davis  V.  Allen,  3  N.  Y.  168. 

Defendant  Newton  was  a  silent  part- 


345 


214* 


TERMINATION    OF    LIABILITY. 


[book  Il.y 


Importance  of  notifying  dissolution. — It  is  obvious,  therefore,  that 
on  the  dissolntion  of  a  firm  or  the  retirement  of  a  partner  it  is  of 
the  greatest  importance  to  notify  the  fact,  and  each  partner  has  a 
right  to  notify  it. 20 


ner  of  the  other  two  defendants,  who 
were  ostensible  partners.  September 
15th,  1882,  a  ninety  days'  note,  bearing 
the  firm  name,  was  given  to  the  plain- 
tifi"  for  $1500.  The  firm  name  was  com- 
posed of  the  names  of  the  two  ostensible 
partners.  October  2d,  1882,  defendant 
Newton  retired  from  the  firm,  and 
another  silent  partner  took  his  place, 
but  no  notice  of  the  change  was  given, 
and  the  firm  name  remained  the  same. 
December  16th  the  note  was  taken  up, 
marked  "  Paid  "  by  plaintiff's  cashier, 
and  a  new  note  given  therefor,  bearing 
the  firm  name.  The  cashier  testified 
that  the  new  note  was  received  in  pay- 
ment of  the  old  one.  Held,  in  the  ab- 
sence of  evidence  of  an  agreement  that 
the  new  note  should  be  accepted  in  pay- 
ment of  the  old  one,  the  members  of  the 
original  firm  were  liable  for  the  debt. 
First  Nat.  Bank  v.  Newton  (Colo.),  14 
Pac.  Rep.  428. 

Where  two  were  concerned  together 
in  business,  but  the  business  was  done  in 
the  name  of  one,  and  it  was  not  gener- 
ally known  that  they  were  partners — 
Held,  that  the  other  was  a  dormant 
partner,  and  therefore  not  liable,  to  a 
person  who  did  not  know  of  the  exist- 
ence of  the  partnership,  for  a  debt  con- 
tracted by  his  partner  after  the  dissolu- 
tion, though  no  notice  had  been  given. 
Kelley  v.  Hurlburt,  5  Cow.  (N.  Y.)  534. 

B.  having  been  a  dormant  partner 
with  T.,  under  the  style  of  "  The  Atlan- 
tic Forge  Company,"  the  firm  was  dis- 
solved, and  a  new  firm  was  formed  by 
T.  with  a  third  person,  under  a  different 
name,  to  conduct  the  same  business,  at 

3- 


the  same  place;  and  the  new  firm  sent 
notice  by  mail  to  all  persons  who  had 
transacted  business  with  the  old  firm» 
A  person  who  had  never  dealt  with  the 
old  firm,  sold  goods  nominally  to  T.,  and 
took  the  note  of  the  new  firm  therefor. 
The  jury  found  that  the  dissolution  and 
formation  of  the  new  firm  were  matter* 
of  public  notoriety.  Held,  that  the  re- 
tiring partner  was  not  liable  for  the 
goods  so  sold,  although  the  vendor,  at 
the  time  of  the  sale,  supposed  him  still 
to  be  a  partner.  Holdane  v.  Butterworth, 
5  Bosw.  (N.  Y.)  1. 

20.  Importance  of  notice  of  disso- 
lution.— The  acts  of  either  partner,  not- 
withstanding dissolution,  will  continue 
to  be  obligatory  upon  the  others  until 
due  notice  of  dissolution  is  given.  Price 
i:  Towsey,  3  Litt.  (Ky.)  423;  Ketcham 
V.  Clarke,  6  Johns.  (N.  Y.)  144;  Merritt 
V.  Pollys,  16  B.  Mon.  (Ky.)  355. 

A  partnership  once  formed  is  consid- 
ered as  continuing,  as  to  third  persons, 
until  notice  of  its  dissolution.  Thurs- 
ton V.  Perkins,  7  Mo.  29  ;  Princeton,  &c.. 
Turnpike  Co.  v.  Gulick,  1  Harr.  (N. 
J.)  161  ;  Bernard  r.  Torrance,  5  Gill  & 
J.  (Md.)  383. 

All  the  partners  may  be  bound,  after 
the  dissolution  of  the  partnership,  by  a 
contract  made  by  one  partner  in  the 
usual  course  of  business,  and  in  the 
name  of  the  firm,  with  a  person  who 
contracted  on  the  faith  of  the  partner- 
ship, and  had  no  notice  of  the  dissolu- 
tion.    Hunt  V.  Hall,  8  Ind.  215. 

Where  there  has  been  no  notice  of 
dissolution  and  one  partner  gives  the 
firm  note  to  one  who  has  no  knowledge 

16 


CHAP.  II.,  §  III.]         NOTICE    OF    DISSOLUTION. 


214^ 


[*215 


Each  partner  has  a  right  to  notify  it. — If  his  copartners  prevent 
him  from  exercising  that  right,  they  will  be  compelled  to  do  what 
may  be  necessary  to  enable  notice  to  be  given,  e.  g.,  to  sign  adver- 
tisements for  publication  in  the  "  Gazette."  (s) 

"^Effect  of  notice  of  dissolution. — Subject  to  two  excep- 
tions, which  will  be  examined  hereafter,  notice  of  dissolu- 
tion of  a  firm  or  the  retirement  of  a  partner  duly  given,  determines 
the  power  previously  possessed  by  each  partner  to  bind  the  others. 
Hence,  after  the  dissolution  of  a  firm  or  the  retirement  of  a  mem- 
ber and  notification  of  the  fact,  no  member  of  the  previously  exist- 
ing firm  is,  by  virtue  of  his  connection  therewith,  liable  for  ffoods 
supplied  to  any  of  his  late  partners  subsequently  to  the  notifica- 
tion ;  [t)  nor  is  he  liable  on  bills  or  notes  subsequently  drawn, 
accepted  or  endorsed  by  any  of  them  in  the  name  of  the  late  firm,  {u) 
even  although  they  may  have  been  dated  before  the  dissolution,  {x) 
or  have  been  given  for  a  debt  previously  owing  from  the  firm  [y)  by 
the  partner  expressly  authorized  to  get  in  and  discharge  its 
debts,  {z)  21 


thereof,  the  note  binds  the  firm.  Ewing 
V.  Trippe,  73  Ga.  776  ;  Holt  v.  Simmons, 
16  Mo.  App.  97. 

To  avoid  future  liability,  the  retiring 
partner  must  give  notice  of  his  retire- 
ment.    Strecher  v.  Conn,  90  Ind.  469. 

Partners  in  trade  who  continue  to  do 
business  in  the  name  of  the  firm,  and 
are  ostensibly  jointly  concerned,  are 
bound  by  the  contracts  of  either,  though 
a  private  article  of  dissolution  may  liave 
been  entered  into  between  them.  Spears 
V.  Tolaud,  1  A.  K.  Marsh.  (Ky.)  203. 

The  fact  that  suflBcient  time  to  give 
public  notice  had  not  elapsed  between 
the  dissolution  of  a  firm  and  the  subse- 
quent making  of  a  note  by  one  of  the 
late  partners,  will  not  excuse  the  part- 
ners from  their  liability  to  pay  such 
note  in  the  hands  of  a  bona  fide  holder. 
Bristol  V.  Sprague,  8  Wend.  (N.  Y.)  423. 

(s)  Hendry  v.  Turner,  32  Ch.  D.  355 ; 
Troughton  v.  Hunter,  18  Beav.  470. 


(0  Minnitt  r.  Whinery,  5  Bro.  P.  C. 
489. 

(m)  Paterson  r.  Zachariah,  1  Stark. 
71 ;  Abel  v.  Sutton,  3  Esp.  108;  Spence- 
ley  V.  Greenwood,  1  Fost.  &  F.  297. 

(x)  Wrightson  r.  PuUan,  1  Stark. 
375 ;  S.  C,  Wright  v.  Pulham,  2  Chitty 
121. 

(y)  Kilgour  v.  Finlyson,  1  H.  BL 
156;  Dolman  v.  Orchard,  2  Car.  &  P.. 
104. 

{z)  Kilgour  V.  Finlyson,  1  H.  Bl. 
156.     See  Lewis  v.  Reiily,  infra,  note  (c). 

21.  Effect  of  notice  of  dissolution. — 
The  general  rule  is  that  after  dissolu- 
tion neither  partner  can  make  a  new 
contract  or  incur  new  responsibilities  in 
the  firm  name  which  will  be  binding  on 
the  others  without  express  authority;, 
and  no  note,  draft  or  acceptance  so  exe- 
cuted in  the  firm  name  will  be  valid,  if 
the  party  with  whom  the  contract  is. 
made    had    notice   of   the    dissolution. 

47 


215*                              TERMINATION    OF    LIABILITY.  [bOOK    II., 

Cases  in  ivhich  notice  is  immaterial. — There  are,  it  is  true,  cases 
to  be  met  with  in  which,  notwithstanding  a  dissolution  and  notice, 
a  bill  or  note  in  the  name  of  the  firm  has  been  held  to  bind  those 

Curry  v.  White,  51  Cal.  530 ;  Brown  v.  nership  and  sent  to  an  agent  for  sale, 

Broach,  52  Miss.  536  ;  Maxey  v.  Strong,  but  sold  after  notice  to  the  agent  and  the 

53   Miss.    280 ;    Smith   v.   Shelden,    35  purciiaser  that  one  partner  has  retired, 

Mich.  42 ;  Floyd  v.  Miller,  61  Ind.  225  ;  binds  the  remaining  partner  only.    Robb 

Bacon  v.  Hutchings,  5  Bush  (Ky.)  595;  v.  Mudge,  14  Gray  (Mass.)  534. 

Montague  v.  Reakert,  6  Id.  393  ;  Gale  v.  That  a  partner,  after  dissolution  of  the 

Miller,  1  Lans.  (N.  Y.)  451 ;  Whitworth  firm,  with  notice  to  its  creditors,  cannot 

V.  Ballard,  56  Ind.   279;  Meyer  v.  At-  renew   a   partnership   note  of   his   late 

kins,  29  La.  Ann.  586 ;  Vaccaro  v.  Toof,  partnership,  see  Moore  v.  Lackman,  52 

9  Heisk.  (Tenn.)  194.  Mo.   323;    Haddock   v.   Crocheron,   32 

A   declaration,  alleging  that   a    note  Tex.  276.     But  compare  Taylor  v.  Hill, 

was  made  in  the  name  of  the  firm  by  36  Md.  494. 

one  of  the  partners  after  a  dissolution,  The   rule  that  after   dissolution    one 

except  for   the   purpose  of  settlement,  partner  cannot,  by  transferring  a  check 

and  given  for  a  pre-existing  debt  of  the  previously    signed,    create    a    liability 

firm,  does  not  show  a  partnership  lia-  against   the    firm,    applied   where    one 

bility,  but  does  show  the  liability  of  the  partner  drew  a  check  in  the  name  of  his 

partner  making  the  note  in  his  separate  firm,  retained  it  in  his  possession,  and, 

capacity.     Fontaine  v.  Lee,  6  Ala.  889.  after  the  dissolution,  transferred  it  to  a 

The  notice  of  dissolution,  and  that  creditor  in  payment  of  his  private  debt, 
one  of  the  members  would  thereafter  Gale  v.  Mitler,  54  N.  Y.  536. 
conduct  the  business,  is  evidence  of  the  After  dissolution,  a  note  made  in  the 
facts  therein  contained,  and  admissible  firm  name,  with  the  assent  of  the  part- 
on  the  question  in  whose  possession  the  ners,  for  a  debt  due  by  the  firm,  is  a 
firm  property  remained  after  the  disso-  valid  obligation.  The  debt  due  by  the 
lution.  Kelly  v.  Murphy  (Cal.),  12  Pac.  firm,  particularly  when  an  extension  of 
Kep.  467.  time  of  payment  is  secured  by  giving 

Where  the  facts  are  ascertained,  it  is  the    note,   is   a   sufficient   consideration 

a  question  of  law  whether   notice  of  dis-  therefor.     Randolph  v.  Peck,  1  Hun  (N. 

solution  is  reasonable  or  not.     Mowatt  Y.)  138. 

t.  Howland,  3  Day  (Conn.)  353.  Without  express   authority  from  the 

It  is  not  suflBcient  proof  of  authority  other  members  of  the  firm,  no  partner 

in  one  partner  to  execute  a  firm  note,  other  than  the  liquidating  partner  may, 

after  dissolution,  to  show  that  the  other  after  dissolution,  borrow  money  to  pay  a 

partners  have  paid  certain  other  notes  firm  debt  and  give  a  note  therefor.    Mc- 

60  executed  by  him  in  the  firm   name.  Cowin  v.  Cubbinson,  72  Pa.  St.  358.     In 

But  parol  authority  to  one  partner  who  other  cases  a  ratification  with  knowledge 

used  the  firm  name  after  dissolution  is  of  the  facts  must  be  shown.     McElroy 

suflScient;   written  authority  is   not  re-  v.  Melear,  7  Coldw.  (Tenn.)  140. 

quired.     Easter  i.  Farmers' Nat.  Bank,  Illustrations. — Where  one  of  the  sur- 

57  111.  215.  viving   members   of  a    partnership  an- 

A  bill  of  exchange  drawn  by  a  part-  swered  under  oath  to  a  suit  upon  a  due- 

348 


CHAP.  II.,  §  III.]         NOTICE    OF    DISSOLUTION.  215* 

who  were  members  thereof  prior  to  the  dissolution,  but  in  each  of 
these  cases  there  was  some  circumstance  taking  it  out  of  the  ordinary 
rule.  In  Burton  v.  Issitt  (a)  the  continuing  partner  had  authority 
to  use  the  name  of  the  retired  partner  in  the  prosecution  of  all  suits 
for  the  recovery  of  partnership  property.  This  was  held  to  au- 
thorize the  giving  of  a  promissory  note  for  sixpences,  payable  under 
the  Lords'  act,  and  the  retired  partner  was  therefore  held  bound  by 
a  note  given  by  his  late  partner  in  payment  of  those  sixpences.  In 
Smith  V.  Winter  (6)  the  continuing  partner  had  express  permission 
to  use  the  name  of  his  late  partner,  who  was  therefore  justly  held 
liable  on  a  bill  given  in  the  name  of  the  old  firm  after  his  retire- 
ment. The  only  case,  *indeed,  of  this  description  which 
-I  presents  any  difficulty,  is  Lewis  v.  Reilly.  (c)  There,  two 
partners  drew  a  bill  payable  to  their  own  order,  and  afterwards 
dissolved  partnership.  One  of  them  then  endorsed  the  bill  in  the 
name  of  both  to  the  plaintiff,  who  knew  of  the  dissolution.  It  was 
held,  in  an  action  by  him  against  both  partners,  that  he  was  entitled 

bill  signed  in  the  firm  name,  denying  name  of  the  firm,  payable  on  demand, 
its  execution  and  the  existence  of  such  in  lieu  of  a  note  given  by  the  firm  which 
a  firm,  a  reply  that  after  its  execution  had  not  become  payable,  with  a  view  to 
he  ratified  the  act  of  his  partner  in  sign-  enable  the  creditor  to  secure  his  debt  by 
ing  it,  was  held  to  be  good  on  demurrer,  an  attachment  of  property  ;  it  was  held 
Pattison  v.  Norris,  29  Ind.  165.  that  the  other  partner  was  not  bound  by 

Where  one  of  two  copartners,  after  the  transaction,  because  the  giving  of 
dissolution,  gave  a  note  in  the  name  of  the  new  note  was  not  in  the  usual  course 
the  firm  for  his  own  private  debt,  the  of  dealing,  and  that  the  attachment  was 
creditor  knowing  that  the  partnership  void  as  to  other  creditors.  Whitman  v. 
was  dissolved  ;  and  this  note  being  after-  Leonard,  3  Pick.  (Mass.)  177. 
wards  sued,  and  the  party  who  made  it  The  name  of  a  firm  was  changed  from 
having  become  bankrupt,  the  other  part-  "Davis  Creamery"  to  "  Beloit  Cream- 
ner  compromised  the  suit  by  giving  his  ery."  Held,  not  to  import  notice  that 
own  note  for  half  the  debt  and  all  the  D.  J.  Davis  had  retired  from  the  firm, 
costs,  part  of  which  note  he  afterwards  even  though  aided  by  the  fact  that  be- 
voluntarily  paid ;  it  was  held  that  the  fore  the  change  checks  were  signed 
making  and  acceptance  of  the  first  note  "Davis  Creamery,  by  W.  J.  Davis," 
was  a  fraud  upon  the  absent  partner,  while  after  the  change  they  were  signed 
and  that  the  second  note  was  therefore  simply  "  W.  J.  Davis."  Coggswell  v. 
void.     Stearns  v.  Burnham,  4  Me.  84.        Davis,  65  Wis.  191. 

Where  a  partner,  after  the  partner-        (a)  5  B.  &  A.  267. 
ship  had  been  dissolved  by  the  abscond-        (6)  4  Mees.  &  W.  454. 
ing  of  his  copartner,  gave  a  note  in  the        (c)  1  Q.  B.  349. 

349 


■216*  TERMINATION    OF    LIABILITY.  [bOOK    II., 

to  recover  on  the  bill,  and  that  it  was  immaterial  whether  he  knew 
of  the  dissolution  or  not.  The  precise  ground  of  this  decision  does 
not  distinctly  appear.  The  court  seems  to  have  proceeded  on  the 
supposition  that  an  endorsement  by  one  of  several  payees  in  the 
name  of  all  is  sufficient ;  but  the  writer  has  been  unable  to  find  any 
previous  authority  for  such  a  doctrine,  save  where  the  endorsers  are 
partners,  which  in  the  case  in  question  they  were  not,  as  the  plaintiff 
was  found  by  the  jury  to  have  known.  The  case  is  certainly 
anomalous  and  requires  reconsideration,  [dj  22 

Exceptions  to  rule. — The  exceptions  alluded  to  above  as  qualify- 
ing the  rule  that  the  agency  of  each  partner  is  determined  by  disso- 
lution (or  retirement)  and  notice,  are — 

When  a  partner  continues  to  hold  himself  out. — First,  where  a 
partner  who  has  retired  and  notified  his  retirement,  nevertheless 
■continues  to  hold  himself  out  as  a  partner ;  and  secondly,  where 
what  is  done  only  carries  out  what  was  begun  before. 

(d)  See  Story   on   Bills,    §   197,  and  not  bound  by  the  rigid  rules  as  to  notice 

Abel  V.  Sutton,  3  Esp.  108.     The  cases  of  dissolution  of  the  partnership,  appli- 

go  further  than  is  suggested  in  Garland  cable   to  the  withdrawal  of  a    partner 

V.  Jacomb,  L  R.,  8  Ex.  220,  for  the  no-  from  the  firm,  who  would  still  be  liable 

tice  of  dissolution  is  what  creates  the  if  he  permitted  his  name  to  remain  in 

difficulty.     See  ivfra,  p.  *220,  note  (s).  the  partnership.     Williams  v.  Mathews, 

22.  Cases  in  which  notice  is  imma-  14  La.  Ann.  11. 

terial. — If  one  partner  contracts  with  a  Persons   having  no   knowledge  of  a 

third  person,  in  the  name  of  the  firm,  partnership  are  not  entitled  to  notice  of 

after  dissolution,  but   that   fact   is   not  its  dissolution.     Chamberlin  v.  Dow,  10 

made    public  or  known   by  such  third  Mich.  319. 

person,  the  law  considers  the  contract  Entries  in  the  firm  books  in  the  na- 

as  being  made  with  the  firm,  and  upon  ture  of  admissions  of  indebtedness  on 

their  credit.     But   if  the  partner  deal  the  part  of  the  firm  are   not   binding 

with  another  in  his  individual   name,  upon   one   who   retired   from   the  firm 

and  upon  his  sole  responsibility,  with-  before    they   were   made,    whether    the 

out  even  an  allusion  to  the  partnership,  creditor  knew  of  his  retirement  or  not. 

it  was  unimportant  to  that  other  to  know  Pringle  v.  Leverich,  97  N.  Y.  181;  S. 

that  the  partnership  was  dissolved,  since  C,  49  Am.  Eep.  522. 

he  was  dealing,  not  with  the  firm,  and  Circumstances   such  as    leave  no   ra- 

upon  their  credit,  but  with  the  individ-  tional  doubt  on  the  mind  that  one  knew 

ual  with  whom  lie  was  contracting,  and  of  the  dissolution  of  a  partnership  are 

upon  his  credit.     Le  Roy  v.  Johnson,  2  as    satisfactory   as   direct   and    positive 

Pet.  (U.  S.)  186.  proof.      Irby  v.  Vining,  2   McCord  (S. 

The  heirs  of  a  deceased  partner  are  C.)  379. 

350 


€HAP.  II.,  §  III.]       noticp:  of  dissolution.  216* 

1.  If  a  partner  retires  and  gives  notice  of  Ills  retirement,  and  he 
nevertheless  allows  his  name  to  be  used  as  if  he  were  still  a  part- 
ner, he  will  continue  to  incur  liability  on  the  principle  of  holding 
out,  explained  in  an  earlier  part  of  this  treatise.  In  Williams  v. 
Keats,  (e)  after  a  partner  had  retired  and  after  notice  thereof  had 
been  given  by  advertisement,  a  bill  was  accepted  by  his  copartner 
in  the  names  of  himself  aud  late  partner.  The  names  of  both  still 
remained  painted  up  over  their  late  place  of  business,  and  Lord 
Ellenborough  held  that  the  partner  who  had  retired  was  liable  on 
this  bill  notwithstanding  the  advertisement,  for  there  was  no  evi- 
dence to  .show  *tliat  the  plaintiif  in  fact  knew  of  the  disso-  r^.^,-, 
lution.(/)23  L  "^ 

Efect  of  not  preventing  use  of  name. — Upon  this,  however,  it  is 
to  be  observed  that  the  only  evidence  that  the  retired  partner  au- 
thorized the  continued  use  of  his  name  was  the  fact  that  he  had  not 
prevented  it.  Xow,  authorities  are  not  wanting  to  show  that  if  a 
partner  retires  and  notice  of  his  retirement  is  given  by  advertise- 
ment, he  will  not  continue  to  incur  liability  by  the  acts  of  his  co- 
partners simply  because  they  continue  to  carry  on  business  in  the 
old  name  and  'he  does  not  take  steps  to  stop  them,  {g)  His  forbear- 
ance in  this  respect  does  not  necessarily  amount  to  an  authority  to 
use  his  name  as  before,  and  unless  his  name  is  used  by  his  authority 
he  is  not  liable  on  the  ground  that  he  holds  himself  out  as  a  part- 
ner, (h)     But  although  it  may  be  doubtful  whether  in  \Villiams  v. 

(e)  2  Stark.  290.     See,  too,  Dolman  v.  tice  "  that  the  business  of  the  late  firm 

Orchard,  2  Car.  &  P.  104 ;  Emmet  v.  But-  will  for  the  present  be  carried  on  in  tht, 

ler  7  Taunt.  600.  same  name,  under  the  charge  of  J.  H." 

(/)  See,  as  to  this,  Brown  v.  Leonard,  (one  of  the  partners),  "who  will  con- 

2  Chitty  120,  infra.  tinue,  and  who  is  duly  authorized   to 

23.  Holding  out  after  notice  of  dis-  adjust  and  settle  matters  relative  to  the 
solution.— Where  a  firm  is  sued,  it  may  same."  Held,  that  the  surviving  part- 
be  shown  in  evidence  that  after  the  with-  ners  held  out  to  the  world  that  they 
drawal  of  a  partner  and  a  change  in  the  would  continue  to  transact  business  un- 
firm  name,  the  partnership  had  remained  der  that  name,  and  that  a  note  given  by 
practically  the  same,  and  that  the  busi-  J.  H.  in  the  name  of  the  firm  was  bind- 
ness  had  been  conducted  by  the  same  ing  upon  both.  Casco  Bank  v.  Hills,  16 
persons  as  before  such  withdrawal  and  Me.  155. 

change  of  name.     Mellinger  v.  Parsons,  (g)  See  Newsome  v.  Coles,  2  Camp. 

51  Iowa  58.  617. 

Two  surviving  payrtners  published  no-  (h)  As  to  a  retiring  partner's  right  to 

351 


217* 


TERMINATION    OF    LIABILITY. 


[book  II.^ 


Keats  there  was  a  sufficient  liolding  out,  it  is  clear  tluit  if  a  partner 
retires  and  does  still  hold  himself  out  as  a  partner,  this  is  in  fact 
signifying  that  he  is  willing  to  incur  the  responsibilities  of  a  part- 
ner for  the  sake  of  those  with  whom  his  name  is  associated,  and, 
therefore,  he  will  continue  to  be  answerable  for  their  conduct,  even 
to  persons  dealing  with  them  with  knowledge  of  his  retirement. 
This  was  decided  in  Brown  v.  Leonard,  (i)  in  which  the  plaintiff 
sued  on  a  promissory  note  made  in  the  name  of  Spring,  Leonard  & 
Bush.  Before  the  note  was  made,  Bush  had  retired  from  the  firm, 
and  the  plaintiff,  before  he  took  the  note,  was  told  by  Bush  that  he 
had  ceased  to  be  a  partner  with  Leonard  and  Spring,  but  that  his 
name  was  to  continue  for  a  certain  time.  Bush  was  held  liable  on 
the  note ;  for,  notwithstanding  his  retirement,  his  name  was  con- 
tinued, and  with  it  his  responsibility,  [k)  24 


an  injunction  to  restrain  the  continuing 
partners  from  carrying  on  business  in 
the  old  name,  see  De  Tastet  v.  Borde- 
nave,  Jac.  516 ;  Webster  v.  Webster,  3 
Swanst.  490,  note ;  Lewis  v.  Langdon,  7 
Sim.  421. 

(i)  2  Chitty  120. 

{k)  Bush,  however,  seems  to  have  un- 
dertaljen  that  the  notes  should  be  pro- 
vided for.     See  the  judgment. 

24.  Effect  of  not  preventing  use  of 
firm  name. — A  retiring  partner,  who 
gives  notice  by  publication  in  a  news- 
paper that  he  has  ceased  to  be  a  partner, 
but  who  after  that  allows  his  name  to 
appear  in  the  firm  as  a  partner,  and  con- 
tinues in  its  employment,  is  liable  as  a 
partner  to  one  who  deals  with  the  firm, 
and  is  misled  by  the  appearances,  and 
has  no  notice  that  he  is  not  a  partner, 
althotigh  the  fact  is  generally  known  at 
the  place  where  tiie  contract  is  made. 
Wait  V.  Brewster,  31  Vt.  516. 

When  a  retiring  partner  consents  to 
the  continued  use  of  the  firm  name,  he 
cannot  deny  his  liability  to  one  who 
gives  credit  to  the  firm  in  ignorance  of 
the  change,  even  though  such  creditor 


had  no  transactions  with  the  firm  until 
after  the  change.  Richards  v.  Hunt,  65 
Qa.  342 ;  Richards  v.  Butler,  Id.  593. 

Creditors  of  a  partnership  need  not 
pay  any  attention  to  public  rumors  of 
dissolution  where  the  use  of  the  firm 
name  and  credit  is  continued.  Moline 
Wagon  Co.  v.  Rummell,  2  McCrary  (U. 
S.)  307. 

No  liability  can  be  created  on  the 
credit  of  a  firm  which  has  been  dissolved, 
unless  the  firm  name  is  used  in  making 
purchases.  Kirby  v.  Hewitt,  26  Barb. 
(N.  Y.)  607. 

Where,  after  the  retirement  of  a  part- 
ner, his  name  is  continued  in  the  style 
of  the  firm  with  his  sanction  and  ap- 
proval, he  remains  liable  on  the  con- 
tracts and  for  the  debts  of  the  firm  to 
the  same  extent  as  if  he  had  actually 
continued  a  partner  therein.  Freeman  v. 
Falconer,  44  N.  Y.  Super.  Ct.  132.  See, 
also,  Ellis  V.  Bronson,  40  111.  455 ;  Speer 
V.  Bishop,  24  Ohio  St.  598.  Compare 
Van  Doren  v.  Horton,  19  Hun  (N.  Y.)  7. 

The  mere  fact  that  a  partnership  name 
has  been  kept  over  the  door  after  the  dis- 
solution of  the   partnership,  is   not  of 


352 


CHAP.  II.,  §  ITI.]  NOTICE    OF    DISSOLUTION. 


217^ 


2.  Agency  continuing  for  purposes  of  icinding  up. — It  is  said  that 
a  firm,  notwithstanding  its  dissolution,  continues  to  exist  so  far  as 
may  be  necessary  for  the  winding  up  of  its  business.  {I)  This  doc- 
trine requires  consideration.  *Xo  doubt  after,  as  M'ell  as 
-I  before  dissolution,  each  partner  can  pay  or  receive  payment 
of  a  partnership  debt ;  for  it  is  clearly  settled  that  payment  by  one 
of  several  joint  debtors,  or  to  one  of  several  joint  creditors,  {m)  ex- 
tinguishes the  debt  irrespectively  of  any  question  of  partnership. 
So,  ^gain,  as  regards  dealing  with  the  partnership  assets,  it  has  been 
held  that  the  power  of  a  continuing  or  surviving  partner  to  sell  or 
pledge  partnership  assets  is  as  extensive  as  that  of  a  partner  in  a 
going  concern,  (n)  But  when  questions  of  a  different  sort  arise, 
considerable  difficulty  is  experienced,  and  this  difficulty  is  rather 
increased  than  diminished  by  the  loose  statement  that  a  partnership 
which  is  dissolved  is  nevertheless  deemed  to  continue  so  far  as  may 
be  necessarv  for  winding  up  its  affairs.  25 


itself  sufficient  to  authorize  one  who 
holds  a  note  signed  in  the  partnership 
name  to  recover  upon  it.  Boyd  v.  Mc- 
Cann,  10  Md.  118. 

The  fact  that  A  permits  the  firm  to 
use  his  name  as  their  firm  name  does 
not  authorize  the  firm,  upon  ils  dissolu- 
tion, to  confer  such  rigiit  upon  the  new 
firm.  Horton  Manufacturing  Co.  v.  H. 
M.  Co.,  18  Fed.  Rep.  816. 

A  copartnership  was  incorporated,  and 
transferred  their  property  to  the  corpo- 
ration, and,  by  a  by-law,  the  business 
was  to  be  carried  on  in  the  name  of  the 
copartnership.  Reld,  that  though  the 
partnership  was  thus  dissolved  the  mem- 
bers were  liable  as  partners  upon  con- 
tracts subsequently  made  with  third  per- 
sons having  no  notice  of  the  dissolution. 
Goddard  v.  Pratt,  16  Pick.  (Mass.)  412. 

(0  Ex  parte  Williams,  11  Ves.  5 ;  Pea- 
cock V.  Peacock,  16  Id.  57 ;  Crawshay  v. 
Collins,  15  Ves.  227,  and  2  Russ.  342; 
Wilson  t;.  Greenwood,  1  Swanst.  480 ; 
Crawshay  v.  Maule,  Id.  .507 ;  Butchart 
V.  Dresser,  4  De  G ,  M.  &  G.  542.     N. 


B. — The  dicta  of  Lord  Eldon  were  not 
made  in  any  case  in  which  the  power 
of  one  partner  to  bind  the  others  after  a 
dissolution  was  before  him  for  decision. 

(m)  /.  e.,  if  they  are  not  trustees. 
Payment  to  one  of  several  trustees  is  no 
discharge.  Webb  r.  Ledsam,  1  Kay  & 
J.  385. 

(n)  See  Fox  v.  Hambury,  Cowp.  445  ; 
Smith  V.  Stokes,  1  East  363;  Smith  v. 
Oriell,  Id.  368;  Harvey  v.  Crickett,  5 
Mau.  &  S.  336 ;  Morgan  v.  Marquis,  9 
Ex.  145 ;  Butchart  v.  Dresser,  4  De  G., 
M.  &  G.  542 ;  Re  Clough,  31  Ch.  D  324. 

25.  Agency  continuing  for  purposes 
of  winding  up — in  general. — Upon  a 
dissolution,  each  partner  has  a  right  to 
settle  the  affairs,  except  in  case  of  some 
agreement  or  order  of  court  to  the  con- 
trary. Granger  v.  McGilvra,  24  111. 
152;  Mayor  v.  Hawkes,  12  111.  298; 
Gannett  v.  Cunningham,  34  Me.  56; 
Milliken  t.  Loring,  37  Me.  408  ;  RufFner 
V.  Hewett,  7  W.  Va.  585 ;  Robbins  v. 
Fuller,  24  N.  Y.  570;  Heart  o.  Walsh, 
75  111.  200;  Nickels  v.  Mooring,  16  Fla. 

53  23 


218* 


TERMINATION    OF   LIABILITY, 


[book    XL, 


Doctrine  not  admitted  at  law. — Lyon  v.  Hayncs  (o)  is  a  strong  au- 
tliority  to  show  that  ^vhen  an  unincorporated  company  is  dissolved 


76;  Riddle  v.  Etting,  32  Pa.  St.  412; 
Ward  V.  Barber,  1  E.  D.  Smith  (N.  Y.) 
423 ;  Dowry  v.  Roberts,  2  Md.  Ch.  157  ; 
Hall  V.  Clagett,  48  Md.  225. 

Until  the  affairs  of  a  partnership  are 
settled,  and  outstanding  engagements 
made  good,  the  partnership  must,  in 
contemplation  of  law,  have  a  continu- 
ance so  far  as  respects  the  winding  up  of 
the  concern.  Brown  v.  Higginbotham, 
5  Leigh  (Va.)  583. 

The  remaining  partners,  after  a  disso- 
lution, are  entitled  to  the  possession  of 
the  effects  for  the  purpose  of  settling  up 
the  concern,  and  without  interference, 
unless  for  good  cause  shown,  on  the  part 
of  strangers  who  may  have  purchased 
the  shares  of  retiring  partners.  Reece 
t;.  Hoyt,  4  Ind.  169. 

The  fact  that  one  partner  remains  in 
possession  of  the  books  and  papers  of  the 
firm  after  dissolution,  does  not  make  him 
responsible  for  debts  which  he  neglects  to 
collect.  Wilder  v.  Morris,  7  Bush  (Ky.) 
420. 

A  firm  is  bound,  so  far  as  benefited  by 
a  loan  to  a  liquidator,  to  pay  his  debts. 
Prudhomme  v.  Henry,  5  La.  Ann.  700. 

The  Missouri  statute  regulating  the 
administration  of  partnership  estates 
does  not  prohibit  a  surviving  partner 
from  winding  up  and  settling  the  part- 
nership concerns,  unless  he  first  give 
bond  with  security  for  the  faithful  dis- 
charge of  his  duties.  Bredow  v.  Mutual 
Savings  Institution,  28  Mo.  181. 

Where  one  partner  dies  after  dissolu- 


tion but  before  the  firm's  afJairs  have 
been  settled,  the  other  partner  obtains 
the  rights  of  a  surviving  partner.  Ober 
V,  Indianai)olis,  &c.,  R.  R.  Co.,  13  Mo. 
A  pp.  81. 

A  solvent  partner  of  a  firm  which  has 
been  dissolved  by  the  separate  insolvency 
of  the  other  partners,  is  not  entitled  as 
of  right  to  administer  the  partnership 
assets  and  settle  his  affairs.  Hubbard  v. 
Guild,  1  Duer  (N.  Y.)  662. 

Where  one  of  two  copartners  sells  all 
his  interest  in  the  firm  property  to  the 
other,  who  assumes  the  firm  liabilities, 
this  confers  upon  the  latter  the  usual 
powers  of  a  liquidating  partner,  and 
among  others,  the  power  of  disposing  of 
claims  by  arbitration.  Becker  v.  Boon, 
61  N.  Y.  317. 

While,  as  a  general  rule,  each  partner 
has  the  right  to  apply  any  of  the  firm 
funds  in  his  hands  in  payment  of  the  firm 
debts,  yet  the  court  may,  in  its  discretion, 
direct  such  partner  to  pay  such  moneys 
into  court.  Carper  v.  Hawkins,  8  W.  Va. 
291. 

Carrying  out  contracts  made  pre- 
vious to  the  dissolution. — A  dissolu- 
tion of  partnership  revokes  the  author- 
ity of  one  partner  to  bind  the  other  in 
respect  of  any  new  contracts,  and  re- 
stricts it  to  the  settlement  of  the  part- 
nership concerns.  Bell  v.  Morrison,  1 
Pet.  (U.  S.)  351;  Neal  v.  Hassan,  3 
McCord  (S.  C.)  278 ;  Chase  v.  Kendall, 
6  Ind.  304;  Palmer  v.  Dodge,  4  Ohio 
St.  21;   Perrin  v.  Keene,  20  Me.  355; 


(o)  5  Man.  &  G.  504.     The  question  tion  made  after  the  company  had  been 

in   this   case    was    whether    an    action  dissolved.     It  was  held  that  such  action 

would    lie    by   a    shareholder    against  did  not  lie,  although  the  directors  had 

directors  for  not  applying  the  assets  of  assumed  to  wind  up  the  company  under 

the  company  as  prescribed  by  a  resolu-  the  authority  of  the  resolution. 

354 


CHAP.  TI.,  §  III.]  NOTICE   OF   DISSOLUTION. 


218* 


by  a  resolution  of  a  meeting  competent  to  dissolve  it,  the  power  of 
a  majority  of  shareholders  to  bind  the  minority  is  at  an  end,  and 


Ellicott  V.  Nichols,  7  Gill  (Md.)  85; 
Hurst  V.  Hill,  8  Md.  309;  Speake  v. 
White,  14  Tex.  364;  Bank  of  Port 
Gibson  v.  Baugli,  9  Sni.  &  M.  (Miss.) 
290;  Sutton  i'.  Dillaye,  3  Barb.  (N.  Y.) 
529;  Whitehead  v.  Bank  of  Pittsburg, 
2  Watts  &  S.  (Pa.)  172. 


ing  on  the  other  partners.  Wilson  v. 
Torbet,  3  Stew.  (Ala.)  296 ;  Chardon  v. 
Oliphant,  Treadw.  (S.  C.)  Const.  685; 
Yandes  v.  Lefavour,  2  Blackf.  (Ind.) 
371;  Brady  v.  Hill,  1  Mo.  315;  Ward 
V.  Howell,  5  Harr.  &  J.  (Md.)  60;  Shel- 
ton  V.  Cocke,  3  Munf.  ( Va.)  191 ;   White 


It  is  proper,  after  dissolution,  to  carry    v.  Union  Ins.  Co.,  1  Nott  &  M.  (S.  C. 


out  a  partly  performed  contract  made 
previously  thereto.  Holmes  v.  Shands, 
27  Miss.  40. 

For  fhe  purpose  of  carrying  out  a 
■contract,  intended  to  be  fulfilled  after 
dissolution,    the    prMnership   continues 


556 ;  Hackley  v.  Hastie,  3  Johns.  (N. 
Y.)  536 ;  Gleason  v.  Clark,  9  Cow.  (N. 
Y.)  57;  Brewster  v.  Hardeman,  Dud. 
(Ga.)  138  ;  Conery  v.  Hayes,  19  La.  Ann. 
325;  Chardon  v.  Oliphant,  3  Brev.  (S. 
C.)  183.     But  see  Simpson  v.  Geddes,  2 


after   the   dissolution.      Western    Stage    Bay  (S.  C.)  533;  Kendrick  i;.  Campbell, 
Co.  i;.  Walker,  2  Clarke  (Iowa)  504.  1    Bail.  (S.  C.)  522;  Vinal   v.   Burrill, 

It  is  not  necessary  that  each  partner  16  Pick.  (Mass.)  401.  But  the  admis- 
be  put  separately  in  default,  after  disso-  sions  of  a  partner,  made  after  dissolu- 
lution,  on  a  contract  made  before.  De-  tion,  are  competent  evidence  against  the 
livery  of  goods  sold  to  the  firm  may  be  firm  as  to  any  contract  made  prior  to 
accepted  by,  and  the  price  may  be  de-  such  dissolution.  Mann  v.  Locke,  11 
manded  of,  any  of  the  partners  in  such  N.  H.  246 ;  Taylor  v.  HiHyer,  3  Blackf. 
a  case.  White  v.  Kearney,  2  La.  Ann.  Ind.  433. 
539.  Entries  made,  after  dissolution,  in  the 

Admissions  made  after  dissolution,  partnership  books  may  be  given  in  evi- 
— The  admissions  of  a  partner,  made  dence  against  the  party  who  made  thera. 
after  the  dissolution  of  the  partnership,  Simonton  v.  Boucher,  2  Wash.  (U.  S.)  473. 
are  not  admissible  in  evidence  to  bind  The  admission  by  one  partner  of  the 
the  partnership.     Bispham  v.  Patterson,    satisfaction  of  a  debt  due  to   the  firm 

2  McLean  (U.  S.)  87 ;  Mercer  v.  Sayre,  will  bind  the  partnership,  although 
Anth.  (N.  Y.)  119;  Barringer  v.  Sneed,    made  after  dissolution,  unless  his  want 

3  Stew.  (Ala.)  201  ;  Lansing  v.  Gaine,  of  authority  be  proved.  Beckam  v. 
2  Johns.  (N.  Y.)  300 ;  Burns  v.  McKen-    Peay,  1  Bail.  (S.  C.)  121. 

2;ie,  23  Cal.  101 ;  Daniel  v.  Nelson,  10  In  an  action  to  recover  the  amount 
B.  Mon.  (Ky.)  316 ;  Hamilton  v.  Sum-  of  a  draft  drawn  on  the  plaintiff  by 
mers,  12  Id.  11 ;  Pope  v.  Risley,  23  Mo.  partners,  and  accepted  by  him,  the  ad- 
185 ;  Bank  of  Vergennes  v.  Cameron,  7  missions  of  one  of  the  partners,  made 
Barb.  (N.  Y.)  143;  Meggett  v.  Fitmey,    after  dissolution,  that  the  draft  was  ac- 

4  Slrobh.  (S.  C.)  220;  Berryhill  v.  Mc-    cepted  by  the  plaintiff  for  the  accom- 
Kee,  1  Humph.  (Tenn.)  31.     Thus,  the    modation  of  the  firm,  may  be  given  in 
admission  of  one  partner  as  to  the  ex-    evidence   to  charge  the  other   partner, 
istence  of  a  debt  against  the  firm,  made    Gay  v.  Bowen,  8  Mete.  (Mass.)  100. 
subsequentlv  to  <lissolution,  is  not  bind-        Making  bills  and  notes  after  disso- 

355 


218^ 


TERMINATION    OF    LIABILITY. 


[book  II.^ 


that  even  as  regards  the  mode  of  winding  up  the  concerns  of  the 
defunct  company,  the  majority  of  its  shareholders  cannot  bind 
either  a  dissentient  minority  or  absentees. 


lution. — After  dissolution,  one  partner 
has  no  power  to  bind  the  others  by  giv- 
ing a  note  in  the  name  of  the  late  lirm, 
even  though  it  be  given  for  a  partner- 
ship debt.  Draper  v.  Bissell,  3  McLean 
(U.  S.)  275;  Cunningham  v.  Bragg,  37 
Ala.  436  ;  Burr  v.  Williams,  20  Ark.  171 ; 
Chamberlain  v.  Bancroft,  24  Ga.  310; 
Eichardson  v.  Moies,  31  Mo.  430 ;  Lans- 
ing V.  Gaine,  2  Johns.  (N.  Y.)  300 ; 
Graves  v.  Merry,  6  Cow.  (N.  Y.)  701  ; 
National  Bank  «;.  Norton,  1  Hill  (N.  Y.) 
572;  Galliott  v.  Planters',  &c.,  Bank,  1 
McMuU.  (S.  C.)  209  ;  Bank  of  South 
Carolina  v.  Humphreys,  1  McCord  (S. 
C.)  388 ;  Loomis  v.  Pearson,  1  Harp.  (S. 
C.)470;  Foltzi).  Powrie,  2  Dessau.  (S.C.) 
40;  Isler  v.  Baker,  6  Humph.  (Tenn.) 
85 ;  Lange  v.  Kennedy,  20  Wis.  279 ; 
Conklin  v.  Osborn,  7  Ind.  553 ;  Lock- 
wood  V.  Comstock,  4  McLean  (U.  S.) 
383 ;  Long  v.  Story,  10  Mo.  636 ;  Lusk 
V.  Smith,  8  Barb.  (N.  Y.)  570;  Morri- 
son V.  Perry,  11  Hun  (N.  Y.)  33;  Van 
Valkenburg  v.  Bradley,  14  Iowa  108; 
W^oodworth  v.  Donner,  13  Vt.  522. 

After  dissolution,  one  of  the  partners 
has  an  implied  authority  to  pay  the  part- 
nership debts,  but  not  to  state  accounts 
on  their  behalf,  or  to  execute  notes  even 
on  account  of  a  pre-existing  liability. 
Woodworth  v.  Downer,  13  Vt.  522. 

A  note  made  during  partnership,  but 
not  delivered  until  after  dissolution, 
does  not  bind  the  partners  not  deliver- 
ing it.  Woodford  v.  Dorwin,  3  Vt.  82. 
H.  P.,  Scott  V.  Shipherd,  Id.  108. 

A  partner  authorized  to  settle  the  busi- 
ness of  his  firm  after  its  dissolution,  has 
no  authority  to  accept,  in  the  firm  name, 
a  draft  drawn  for  monev   borrowed  bv 


him  to  pay  the  debts  of  the  firm.  Ham- 
ilton V.  Seaman,  1  Ind.  185. 

A  bill  drawn  on  a  firm,  but  not  ac- 
cepted till  after  a  dissolution  of  the  part- 
nership publicly  announced,  binds  only 
the  partner  who  accepts.  Tombeckbee 
Bank  i'.  Dumell,  5  Mason  (U.  S.)  56. 

One  partner  may  bind  the  others  after 
dissolution,  by  a  note,  if  he  have  ex- 
press authority  so  to  do  from  the  other 
partners  standing  by.  Bower  v.  Douglass, 
25Ga.  714. 

The  settling  partner  of  a  firm  may 
give  the  note  of  the  firm  after  its  disso- 
lution, to  release  their  property  from  an 
attachment  for  a  just  debt,  and  a  surety 
signing  such  a  note,  with  notice,  is  re- 
sponsible.    Kemp  V.  Coffin,  3  Iowa  190. 

All  the  partners  are  bound  by  a  note 
given  by  one  of  them  after  dissolution, 
for  a  debt  contracted  before  dissolution, 
if  the  giving  of  notes  for  debts  of  the 
firm  was  customary  while  the  partner- 
ship continued,  and  the  creditor  had  no 
notice  of  dissolution.  Pecker  v.  Hall, 
14  Allen  (Mass.)  532. 

The  liquidating  partner  may  bind  the 
others  by  giving  a  note  for  money  bor- 
rowed and  used  for  the  purpose  of  pay- 
ing a  debt  of  the  firm.  Siegfried  v.  Lud- 
wig,  102  Pa.  St.  547. 

One  of  the  members  of  a  dissolved 
partnership  may  receive  back  a  promis- 
sory note,  which  they  have  wrongfully 
put  into  circulation  while  the  partner- 
ship existed,  and  bind  the  other  partners 
by  such  act.  Torrey  v.  Baxter,  13  Vt. 
452. 

Indorsing  notes  after  dissolution. 
— A  valid  title  to  a  negotiable  promis- 
sory note,   payable   to  a  copartnership 

56 


-CHAP.  II.,  §  III.]  XOTICE    OF    DISSOLUTION. 


218  = 


Other  cases,  which  have  been  ah-eady  referred  to,  (p)  clearly  show 
that  after  the  dissolution  of  an  ordinary  partnership,  no  *one 
aware  of  the  dissolution  is  entitled  on  any  y-round  of  im-  '- 


firm,  may  be  transferred  by  an  endorse- 
ment made  in  the  name  of  the  firm  by 
one  of  the  copartners,  though  after  dis- 
solution, if  such  dissolution  was  un- 
known to  the  endorsee.  Cony  v.  Whee- 
tock,  3S  Me.  366. 

Where  one  of  two  partners,  after  dis- 
solution, being  authorized  to  settle  the 
affairs  of  the  firm,  endorses,  "without 
•recourse,"  in  the  partnership  name,  a 
promissory  note,  payable  to  the  firm, 
such  endorsement  conveys  the  legal  title 
to  the  note.    Waite  v.  Foster,  33  Me.  424. 

Under  authority,  though  by  parol  only, 
given  to  one  partner  by  the  others  after 
dissolution,  to  sell  a  negotiable  note 
made  to  tiie  firm  before  dissolution,  he 
may  endorse  such  note  "without  re-- 
course,"  in  the  name  of  the  firm.  Yale 
V.  Earaes,  1  Mete.  (Mass.)  486. 

One  partner,  even  after  dissolution, 
may  endorse  the  note  of  the  firm,  paya- 
ble to  himself,  given  before  dissolution. 
Temple  v.  Seaver,  11  Ciish.  (Mass.)  314. 

After  dissolution,  one  partner  cannot, 
without  authority  from  the  others,  en- 
dorse a  note  belonging  to  the  firm.  Fel- 
lows V.  Wyman,  33  X.  H.  351 ;  Sanford 
V.  Mickles,  4  Johns.  (N.  Y.)  224  ;  Hum- 
phries V.  Chastian,  5  Ga.  166 ;  White  v. 
Tudor,  24  Tex.  639. 

Ordinarily,  during  the  existence  of  the 
partnership,  one  partner,  acting  within 
the  scope  of  the  partnership's  business, 
may  sell  and  dispose  of  the  entire  inter- 
est in  the  partnership's  effects  ;  but  when 
the  firm,  though  not  formally  dissolved, 
has  closed  its  business  and  reduced  all 
its  assets  to  the  shape  of  two  notes,  pay- 


able to  the  firm,  if  one  partner  fraudu- 
lently transfers  these,  the  purchaser  takes 
them  subject  to  the  other  partner's  equity. 
Halstead  v.  Shepard,  23  Ala.  558. 

A  partner  cannot  be  made  liable  on  a 
note  endorsed  by  his  copartner  with  the 
social  name,  after  Uie  dissolution  of  the 
partnership,  unless  it  is  shown  that  he 
was  benefited  by  the  transaction  or  au- 
thorized the  endorsement.  Bogerau  v. 
Gu^ringer,  14  La.  Ann.  478. 

One  partner  cannot  bind  his  copartners 
by  endorsing,  in  the  firm  name,  a  note 
given  after  the  dissolution  of  the  part- 
nership, to  renew  a  note  given  before 
the  dissolution.  Lumbermen's  Bank  v. 
Pratt,  51  Me.  563. 

Renewing  notes  after  dissolution. — 
After  dissolution,  the  partner  who  is 
authorized  to  settle  up  the  business  of 
the  partnership  cannot  renew  a  note  in 
in  the  partnership  name,  which  was 
given  before  the  dissolution,  so  as  to  bind 
the  other  partner.  Parker  v.  Cousins, 
2  Grait.  (Va.)  372 ;  Myatts  v.  Bell,  41 
Ala.  222. 

In  respect  to  their  creditors,  copart- 
ners, after  dissolution,  are  joint  debtors 
and  nothing  more.  What  the  joint 
makers  of  a  promissory  note  may  not  do 
to  enlarge,  prolong,  or  continue  existing 
liabilities,  or  to  create  a  new  one  in  re- 
gard to  the  debt,  copartners,  after  disso- 
lution, may  not  do.  Payne  v.  Slate,  39 
Barb.  (N.  Y.)  634. 

Where  a  plaintiff  in  a  judgment  given 
him  by  a  firm  composed  of  three  mem- 
bers, for  liabilities  incurred  upon  notes 
discounted  for  their  use,  continues  his 


(p)  Ante  p.  *215,  especially  Kilgour    Sutton,  3  Esp.  108.     See,  too,  Pinder  v. 
w.  Finlyson,  1  H.  Bl.  156,  and  Abel  v.    Wilks,  5  Taunt.  611. 

357 


219* 


TERMINATION    OF    LIABILITY. 


[book  II., 


plied  agency  to  hold  the  members  of  the  late  firm  responsible  for 
acts  done  by  each  otlier  subsequently  to  the  dissolution ;  and  every 
one  must  feel  the  force  of  Lord  Kenyon's  observation,  in  Abel  v. 


liability  as  accommodation  drawer  of 
new  notes  given  by  the  firm,  after  he 
knows  that  one  member  has  retired,  he 
cannot  in  a  sci.  fa.  to  revive  his  judg- 
ment, in  which  the  two  surviving  mem- 
bers of  the  old  firm  and  the  administra- 
tor of  the  retiring  partner,  who  died 
after  suit  brought,  are  defendants,  re- 
cover for  the  new  liabilities  assumed 
after  the  dissolution,  unless  they  are  re- 
newals of  the  notes  of  the  old  firm. 
Hartley  v.  Kirlin,  45  Pa.  St.  49. 

The  firm  having  endorsed  a  note,  one 
of  the  partners  may,  after  the  dissolution 
of  the  firm,  consent  to  the  holder's  com- 
pounding with  and  releasing  the  maker, 
and  his  consent  will  also  bind  the  other 
partner,  and  make  the  firm  liable  for 
the  balance  due.  Union  Bank  v.  Hall, 
Harp.  (S.  C.)  245. 

The  members  of  a  firm,  in  the  publi- 
cation of  notice  of  their  dissolution,  used 
the  following  language :  "  Either  of  the 
parties  are  authorized  to  use  the  name 
of  the  firm  in  liquidation  only  of  past 
business."  Held,  that  this  did  not 
authorize  the  parties  to  renew  a  note 
given  by  the  firm  for  a  partnership 
debt,  nor  confer  upon  any  of  the  parties 
powers  which  they  did  not  possess  by 
law.  Martin  v.  Kirk,  2  Humph.  (Tenn.) 
529. 

Waiving  notice  or  protest. — Where 
a  note  has  been  endorsed  by  a  partner- 
ship in  the  partnership  name,  one  of  the 
partners  has  authority  to  waive  demand 
and  notice  after  a  dissolution  and  before 
the  note  becomes  payable.  Darling  v. 
March,  23  Me.  184. 

A  liquidating  partner  who,  after  dis- 
solution, gives  a  bill  in  payment  of  a 
firm  debt,  cannot  waive  protest  so  as  to 


bind  his  former  partner,  especially  whert 
the  latter  was  only  a  dormant  partner. 
Mauney  v.  Coit,  80  N.  C.  300. 

Confessing  judgment  after  disso- 
lution.— A  confession  of  judgment  for  a 
partnership  debt,  after  a  dissolution^ 
binds  only  the  partner  making  it.  Her- 
rick  V.  Conant,  4  La.  Ann.  276  ;  Mitchell 
V.  Rich,  1  Ala.  228  ;  Bennett  v.  Marshall, 
2  Miles  (Pa.)  436;  Morgan  v.  Richard- 
son, 16  Mo.  409. 

A  judgment  note  given  by  a  surviving 
partner  in  the  name  of  the  late  firm  ij 
void  as  a  judgment,  both  against  the 
estate  of  the  deceased  and  the  surviving 
partner.  Castle  v.  Reynolds,  10  Walts 
(Pa.)  51. 

Other  acts  which  one  partner  may 
do  after  dissolution. — Presumptively, 
one  partner  has  power,  after  dissolution, 
to  dispose  of  an  article  belonging  to  the 
firm  and  left  in  his  possession,  either  for 
himself  or  for  the  firm.  Bach  v.  State 
Ins.  Co.,  64  Iowa  595. 

After  dissolution,  one  partner  can  com- 
promise and  settle  a  judgment  valid 
against  the  late  firm,  and  the  others 
must  contribute  to  the  amount  paid, 
though  they  did  not  assent  to  the  com- 
promise, and  claim,  but  fail  to  show  that 
they  could  have  settled  on  better  terms. 
Bass  V.  Taylor,  34  Miss.  342. 

After  dissolution,  one  of  the  partners, 
who  has  autliority  to  collect  the  debts, 
may  transfer  to  himself  a  debt  due  to  the 
firm.  Oxley  v.  Willis,  1  Cranch  (U.  S.) 
C.  C.  436. 

Where,  after  dissolution,  one  member 
of  the  firm  defended  and  appealed  from 
a  judgment  against  the  firm,  it  was  held 
that  the  other  members  were  likewise 
liable  to  a  surety  on  the  appeal  bond, 

58 


CHAP.  II.,  §  III.]  NOTICE   OF    DISSOLUTIOX.  219* 

Sutton,  that  if  the  contrary  doctrine  were  to  prevail,  a  man  could 
•never  know  when  he  was  to  be  at  peace  and  freed  from  all  the  con- 
cerns of  the  partnership. 


who  was  afterward  compelled  to  pay  the 
judgment.  Gard  v.  Clark,  29  Iowa  189. 
If  a  claim  is  placed  in  the  hands  of 
two  attorneys,  practicing  in  partnership, 
and,  before  any  steps  are  taken  in  the 
collection  of  the  claim,  the  firm  dissolves 
and  one  of  the  members  takes  charge  of 
the  claim,  and  renders  all  the  services 
in  its  collection,  and  sues  individually 
the  owner  of  the  claim  for  his  fees  in  so 
doing,  the  jury  will  be  justiiied  in  infer- 
ring that  it  was  part  of  the  contract  of 
dissolution  between  the  partners  that  the 
one  who  has  rendered  the  services 
should  attend  to  the  claim  and  receive 
the  compensation,  and  their  verdict  to 
that  effect  will  be  upheld.  Anderson  v. 
Tarpley,  12  Miss.  507. 

A  power  of  attorney,  executed  on  the 
dissolution  of  a  firm  by  two  partners  to 
a  third,  authorizing  him  to  ask,  demand, 
and  receive  the  debts  of  the  firm,  and 
declaring  the  appointment  irrevocable, 
does  not  operate  as  an  assignment  of 
such  debts,  and  consequently  does  not 
render  inoperative  a  release  subsequently 
executed  by  one  of  the  other  members 
of  the  firm  to  one  of  its  debtors.  Napier 
V.  M'Leod,  9  Wend.  (N.  Y.)  120. 

One  who  has  power  to  wind  up  a  part- 
nership in  which  he  was  concerned,  by 
selling  the  merchandise  belonging  to  the 
firm,  has  also  power  to  receive  payment, 
unless  restrained  by  some  special  terms 
of  the  agency.  Lamb  v.  Salters,  3  Brev. 
(S.  C.)  130. 

Various  acts  which  are  ultra  vires. — 
The  implied  power  to  settle  business 
after  dissolution,  does  not  authorize  the 
liquidating  partner  to  appear  for  his  co- 
partner in  an  action  against  the  firm 
even  though  founded   upon  a  firm  in- 


debtedness. Hall  V.  Lanning,  91  U.  S. 
160 ;  Haslet  v.  Street,  2  McCord  (S.  C.) 
311 ;  Loomis  v.  Pearson,  Harp.  (S.  C.) 
470. 

A  partner  cannot  acknowledge  service 
of  a  writ  for  his  former  partner,  after 
dissolution,  where  the  writ  is  sued  out 
against  both  on  a  partnership  liability. 
Demott  V.  Swain,  5  Stew.  &  P.  (Ala.) 
293. 

The  receipt  of  property  is  not  in  itself 
a  payment  of  a  debt,  and  can  only  be- 
come so  by  an  agreement  to  receive 
such  property  as  payment.  Such  an 
agreement  is  a  new  contract,  and  will 
not  be  binding  on  the  firm,  if  made  by  a 
former  partner  after  the  dissolution, 
without  the  consent  of  his  copartner. 
Kirk  V.  Hiatt,  2  Ind.  322. 

The  use  of  the  money  of  a  third  per- 
son  by  one  partner  will  not  render  the 
other  partner  liable  after  dissolution, 
when  he  has  derived  no  advantage  from 
such  use  and  has  not  ratified  the  act  of 
his  partner  in  using  such  money.  Dun- 
lap  V.  Limes,  49  Iowa  177. 

After  a  dissolution  and  pending  a 
liquidation,  a  partner  can  do  no  act,  still 
less  use  the  partnership  funds,  in  a  man- 
ner inconsistent  with  a  just  and  proper 
settlement.  Gridley  v.  Conner,  2  La. 
Ann.  87. 

A  liquidating  partner  who,  having 
obtained  judgment  for  the  firm,  becomes 
bankrupt,  and  at  the  assignee's  sale  buys 
in  his  interest  in  the  judgment,  cannot 
issue  execution,  without  showing  a  sub- 
sequent authority  from  his  former  co- 
partner. Florance  v.  Bridge,  5  La.  Ann. 
735. 

After  dissolution  and  an  assignment 
by  one  partner  to  the  other  of  all  his 


359 


219*                              TERMINATION    OF    LIABILITY.  [bOOK    IL, 

Extent  of  the  doctrine. — The  doctrine  now  in  question  cannot,  it 
is  submitted,  he  carried  further  than  this,  viz.,  that  notwithstand- 
ing dissoUition,  a  partner  has  implied  authority  to  bind  the  firm 

interest  in  the  book  debts  and  demands  cannot  <Iispose  of  the  partnership  chases 

of  the  firm,  with  power  to  collect  them  in  action  without  the  authority  or  assent 

for  his  own  benefit,  an  attempt  by  the  of  the  otlier,  so  as  to  make  him  liable 

I)artner  so  assigning  to  control  one  of  upon  any  covenants  or  obligations  which 

those  demands  against  himself,  and  to  he  assumes  on  such  transfer.     Bennett 

direct  that  it  should  not  be  allowed  in  i:  Buchan,  53  Barb.  (N.  Y.)  578. 

set-off,    can    have   no    eflect.     Davis   v.  A  promise  made  by  a  partner,  after 

Briggs,  39  Me.  304.  the  partnership  has  been  dissolved,  to 

Where  the  articles  of  copartneiship  pay  a  note  on  which  the  firm  are  en- 
provide  that  on  the  dissolution  of  the  dorsers,  no  notice  of  dishonor  having 
copartnership,  its  effects  shall  be  divided  been  given,  is  not  binding  upon  the 
among  the  partners,  the  partners  become,  other  members  of  the  firm.  Schoneman 
on  such  dissolution,  merely  tenants  in  v.  Fegley,  7  Pa.  St.  433. 
common,  and  no  one  of  them  can  set  ofi"  After  dissolution,  one  partner  cannot 
or  sell  the  share  of  the  other  without  discharge  the  debt  of  a  tliird  person  to 
his  consent.  Phillips  v.  Reeder,  18  N.  the  firm,  by  a  receipt  given,  for  the  re- 
J.  Eq.  95.  See,  also,  Hagendobler  v.  lease  of  his  individual  indebtedness,  to 
Lyon,  12  Kan.  276.  such    person,    particularly    where    the 

After  dissolution,  one  partner,  though  debtor  had  notice  not  to  pay  such  part- 
be  is  authorized  to  settle  the  partnership  ner.  Sims  v.  Smith,  11  Rich.  (S.  C.) 
concerns,  has  no  right  to  receive  goods  565. 

consigned  to  the  partnership  for  sale  During  the  existence  of  the  partner- 
prior  to  the  dissolution ;  and  a  purchase  ship  either  party  may  make  a  valid 
of  the  goods  by  a  person  having  knowl-  assignment  of  the  goods  of  the  firm  to 
edge  of  the  facts,  to  pay  a  debt  due  him  secure  debts  due  therefrom  ;  but  if  the 
from  the  partnership,  is  void.  Stierner-  partnership,  by  mutual  consent,  is  dis- 
mann  v.  Cowing,  7  Johns.  (N.  Y.)  Ch.  solved,  and  the  debts,  accounts  and  goods 
-75.  placed  in  the  hands  of  a  third  person,  to 

After  dissolution,  one  partner,  without  wind  up   and  settle  the  arm    business, 

the  consent  of  the  other,  cannot  assign  neither  partner  can  thereafter  make  a 

the  partnership  effects  for  the  benefit  of  valid  disposition    of    them.     Mygatt  v. 

preferred  creditors.     Egberts  v.  Wood,  McClure,  3  Head  (Tenn.)  495. 

3  Paige  (N.  Y.)  517  ;  Deckert  v.  Filbert,  One  partner,  after  dissolution  of  the 

3  Watts  &  S.  (Pa.)  454.  partnership,  cannot  bind  the  rest  with- 

After  the  death  of  one  partner,  an  as-  out  their  consent,   by  settling  accounts 

signment  of  the  partnership  funds,  by  with  or  allowing  credits  to  customers  of 

the  surviving  partner,  for  the  payment  the  firm.     Kootes  v.  Wellford,  4  Miinf. 

of  a  separate  debt  of  the  deceased  part-  (Va.)  215. 

ner,  in   preference   to   the   partnership  Ratification  or  previous  authority, 

debts,  is  void.     Hutchinson  v.  Smith,  7  —If  a  note,  made  payable  to  a  firm,  is 

Paige  (N.  Y.)  26.  endorsed   by  one  of  the  partners   after 

After  dissolution,  one  of  the  partners  dissolution,  and  without  authoritv  from 

360 


CHAP.  II.,  §  III.]  NOTICE    OF    DISSOLUTION.  219* 

SO  far  as  may  be  necessary  to  settle  and  liquidate  existing  demands 
and  to  complete  transactions  begun,  but  unfinished,  at  the  time  of 
the  dissolution,  (q)  Even  Butchart  v.  Dresser,  (r)  which  goes 
further  than  any  other  case,  does  not  carry  the  doctrine  beyond 
this.  In  that  case  two  persons  in  partnership  as  sharebrokers  con- 
tracted to  buy  shares.  Before  paying  for  them  they  dissolved  part- 
nership, and  that  fact  was  known  to  their  bankers.  After  the  dis- 
solution, one  of  the  partners  pledged  the  shares  to  the  bankers  for 
money  to  pay  for  their  purchase,  and  authorized  the  bankers  to  sell 
the  shares  to  indemnify  themselves.  The  other  partner  contended 
that  this  was  done  without  his  authority,  and  that  as  the  bankers 
knew  of  the  dissolution,  they  could  not  retain  the  shares  against 
him.  The  Vice  Chancellor,  how^ever,  held  that  the  partner  who 
pledged  the  shares  had  authority,  after  the  dissolution,  to  complete 
the  contracts  prev^iously  made  by  the -firm;  that  he  therefore  neces- 
sarily had  authority  to  raise  the  funds  to  pay  for  the  shares  in  ques- 
tion, and  that  he  had  not  gone  beyond  his  authority  in  raising  the 
money  by  pledging  them  with  the  bankers  as  he  had  done.  The 
Lords  Justices  took  the  same  view.  "  The  general  law,"  it  was 
said,  "  is  clear  that  a  partnership,  though  dissolved,  continues  for 
the  purjwse  of  winding  up  its  affairs.  Each  partner  has,  after  and 
notwithstanding  the  dissolution,  full  authority  to  receive  and  pay 
money  on  account  of  the  partnership,  and  has  the  same  authority  to 
deal  with  the  j)roperty  of  the  partner*ship  for  partnership 
-'  purposes  as  he  had  during  the  continuance  of  the  partner- 
ship. This  must  necessarily  be  so.  If  it  were  not,  at  the  instant 
of  the  dissolution  it  would  be  necessary  to  apply  to  this  court  for  a 
receiver  in  every  case,  although  the  partners  did  not  differ  on  any 
one  item  of  the  account." 

the  others,  their  subsequent  ratification  Eaton  v.  Taylor,  10  Mass.  54. 

will  supply  the  deficiency  of  authority.  (q)  See  in  Lyon  v.  Haynea,  5  Man.  & 

Leonard  v.  Wildes,  36  Me.  265.  G.    541,   and   in    Smith    v.    Winter,    4 

If,  after  dissohition,  one  of  the  part-  Mees.  &  W.  461,  462 ;  Pollock  Dig.  (3d 

ners  gives  a  note  in  behalf  of  the  former  ed.)  83.                                 . 

copartnership,  and  the  other  partner  pay  (t)  10  Hare  453,  and  4  De  G.,  M.  & 

a  part  of  the  note,  such  payment  is  prima  G.  542.     Re  Clough,  31  Ch.  D,  324,  was 

facie  evidence  of  an  existing  partner-  a  similar  case,  only  the  pledge  was  for 

ship,  or  of  an  authority  to  give  the  note,  an  old  debt. 

361 


220*  TKRMIXATION    OF    LIABILITY.  [bOOK    11.^ 

It  is  to  be  observed  that  in  Butcliart  v.  Dresser  nothing  was  done 
except  for  the  purpose  of  completing  a  transaction  unfinished  at  the 
time  of  the  dissolution.  The  case  did  not  require  the  statement  of 
so  general  a  proposition  as  that  until  the  affairs  of  a  partnership  are 
wound  up,  the  agency  of  each  partner  continues  to  be  as  extensive 
as  if  no  dissolution  had  taken  place.  At  the  utmost,  the  case  under 
consideration  decides  that  in  the  event  of  a  dissolution  it  is  compe- 
tent for  one  partner  to  dispose  of  the  partnership  assets  for  partner- 
ship purposes,  (s)  But  neither  Butchart  v.  Dresser  nor  any  other 
case  shows  that  a  person  who  knows  that  a  partnership  is  dissolved 
can  hold  one  partner  liable  for  acts  of  his  late  copartners  done  sub- 
sequently to  the  dissolution  and  wnthout  authority;  and  if  in 
Butchart  v.  Dresser  the  money  to  pay  for  the  shares  had  been  raised 
by  a  bill,  it  could  not,  consistently  with  prior  decisions,  have  been 
held  that  the  dissolved  firm  was  liable,  either  upon  the  bill  itself  or 
for  the  money  raised  by  its  means. 

Before  leaving  this  subject  it  is  necessary  to  notice  Ault  v.  Good- 
rich, [t)  which  is  sometimes  supposed  to  go  much  further  than  it 
really  does.  In  that  case  two  persons,  Wilcox  the  elder  and  Wil- 
cox the  younger,  partners  as  timber  merchants,  entered  into  a  joint 
speculation  with  the  plaintiff  and  another  in  the  purchase  and  sale 
of  some  trees.  Wilcox  the  younger  had  the  chief  management  of 
the  affair,  and  before  the  adventure  was  closed  the  two  Wilcoxes 
dissolved  partnership.  Wilcox  the  younger  seems  to  have  misap- 
plied some  of  the  moneys  received  by  him  on  the  joint  account,  and 
it  was  considered  clear  that  Wilcox  the  elder  was  responsible  for 
the  *dealinp;s  and  transactions  of  Wilcox  the  vounger  dur-  ^ 

.  .  .        "  r*22i 

ing  the  continuance  of  their  partnership.  It  was  also  con-  ^ 
sidered  that  as  there  was  no  evidence  of  any  new  agreement  between 
any  of  the  parties  upon  the  dissolution  of  partnership  between  the 
Wilcoxes,  the  other  parties  to  the  adventure  were  to  be  treated  as 
having  continued  to  rely  on  the  joint  responsi-bility  of  the  two  Wil- 
coxes in  respect  of  the  dealings  of  Wilcox  the  younger.     Wilcox 

(«)   Quaere,  if  Lewis  v.  Keilly,  1  Q.  B.  it.     But  see  Smith  v.  Winter,  4  Mees.  & 

349,  and  ante  p.  *216,  can  be  supported  W.  454. 
on    this    principle?      Lord    Denman's        (l)  4  Russ.  430. 
judgment  seems  to  have  proceeded  on 

362 


CHAP.  II. 


III.] 


NOTICE    OF    DISSOLUTION. 


221* 


the  elder  was  accordingly  declared  to  be  responsible  for  the  conduct 
of  Wilcox  the  younger  after  the  dissolution. 

Upon  this  case  it  may  be  observed,  first,  that  the  facts  are  not 
satisfactorily  stated  ;  and  secondly,  that  the  judgment  leads  to  the 
inference  that  the  resj)onsibility  of  Wilcox  the  elder  for  the  conduct 
of  Wilcox  the  younger  did  not  turn  upon  the  circumstance  that 
they  were  partners,  but  upon  the  circumstance  that  they  were  jointly 
entrusted  with  the  management  of  the  tree  speculation.  In  this 
view  of  the  case  it  was  obviously  immaterial  whether  the  Wilcoxes 
had  dissolved  partnership  or  not.  26 

What  amounts  to  notice  of  dissolution.  Notice  in  case  of  retire- 
ment of  dormant  partner. — It  has  been  already  seen  that  when  a 
dormant  partner  retires,  he  need  give  no  notice  of  his  retirement  in 
order  to  free  himself  from  liability  in  respect  of  acts  done  after  his 
retirement,  (it)  The  reason  is,  that  as  he  was  never  known  to  be  a 
partner,  no  one  can  have  relied  on  his  connection  with  the  firm,  or 


26.  Extent  of  the  doctrine. ^For  the 
purposes  of  liquidation  the  surviving 
partner  has  a  right  to  the  possession  of 
all  of  the  assets  of  the  firm.  Hoolev  v. 
Gieve,  9  Daly  (N.  Y.)  104.  Thus,  either 
partner  may  continue  to  use  trade-marks 
belonging  to  the  firm  unless  he  has  in 
some  manner  transferred  or  divested 
himself  of  the  right  so  to  do.  Hazard 
V.  Kasuell,  93  iN.  Y.  259  ;  S.  C,  45  Am. 
Kep.  198. 

If,  at  the  time  of  dissolution,  the  firm 
was  under  obligation  to  execute  a  guar- 
anty, and  one  partner  executes  it,  the 
firm  will  be  bound  thereby.  Star  Wagon 
Co.  V.  Swezy,  59  Iowa  609. 

When,  in  the  advertisement  of  disso- 
lution, power  is  given  to  the  continuing 
partner  to  settle  the  business  of  the  firm, 
and  for  that  purpose  to  use  the  partner- 
ship name,  the  jury  may  infer,  from  the 
transactions  of  trade,  and  the  usage  and 
custom  of  merchants,  as  well  as  from  the 
advertisement  itself,  whether  this  power 
extends  to  the  signing  of  the  partnership 


name  to  renewals  of  a  note  which  had 
been  discounted  in  bank  previous  to  the 
dissolution  ;  and  it  is  not  necessary  that 
the  authority  should  be  given  by  a 
special  power  of  attorney,  or  other 
written  instrument.  Myers  v.  Huggins, 
1  Strobh.  (S.  C.)  473. 

But  a  general  authority  to  settle  the 
business  does  not  warrant  the  giving  a 
note  in  the  name  of  the  firm  for  a  firm 
debt,  or  in  exchange  for  a  note  given 
before  dissolution.  Brown  v.  Chancellor, 
61  Tex.  437.  And  the  liquidating  part- 
ner cannot  bind  the  otliers  by  endorsing 
a  new  draft  and  substituting  it  for  any 
old  one,  and  the  creditor  taking  such 
draft  with  knowledge  of  the  facts,  can- 
not hold  the  other  partners  upon  it. 
Macon  Bank  v.  Ells,  68  Ga.  192. 

The  duty  of  surviving  law  partner  aa 
to  carrying  on  pending  litigations  for 
the  benefit  of  tire  estate  of  deceased 
partner,  pointed  out.  Sterne  v.  Goep, 
20  Hun  (N.  Y.)  396. 

(m)  Ante  p.  *212. 


363 


221* 


TERMINATIOX    f)F    LIABILITY. 


[book    II., 


truly  allege  that  when  dealing  with  the  firm  he  continued  to  rely  on 
the  fact  that  the  dormant  partner  was  still  connected  therewith. 

Notice  in  case  of  retirement  of  ostensible  partner. — But  when  an 
ostensible  partner  retires,  or  when  a  partnership  between  several 
known  partners  is  dissolved,  the  case  is  very  different ;  for  then 
those  who  dealt  with  the  firm  before  a  change  took  place  are  en- 
titled to  assume  that  no  change  has  occurred  until  they  have  notice 
to  the  contrary,  (x)  And  even  those  who  never  had  dealings  with 
the  firm  and  who  only  knew  of  its  existence  by  repute,  are  entitled 
to  assume  that  it  still  exists  until  something  is  done  to  notify  pub- 
licly that  it  exists  no  longer,  (y)  27 


(x)  See  per  Lord  Selborne  in  Scarf  v. 
Jardine,  7  App.  Cas.  349. 

(y)  Parkin  v.  Carruthers,  3  Esp.  348. 

27.  Notice  in  case  of  retirement  of 
ostensible  partner. — A  publicly  adver- 
tised partner  wlio  fails  to  give  notice,  on 
retiring  from  tlie  firm,  continues  liable. 
Stopping  a  newspaper  notice  of  his  con- 
nection with  the  firm  is  not  sufficient. 
Uhl  V.  Harvey,  78  Ind.  26.  But  actual 
notice  is  all  that  is  necessary ;  direct 
personal  notice  to  the  firm's  customers 
is  unnecessary.  The  retiring  partner 
escapes  liability  if  they  know  of  his  re- 
tirement in  any  way ;  but  the  burden  of 
proof  is  upon  him  to  show  his  with- 
■drawal.     Uhl  v.  Bingaman,  75  Ind.  365. 

The  liability  of  a  retiring  partner  for 
debts  contracted  in  his  name  subsequent 
to  his  retirement  attaches  to  a  merchant 
who  abandons  his  business,  leaving  it  to 
be  carried  on  in  his  name  by  a  relative. 
Nicholson  v.  Moog,  65  Ala.  471. 

A  retiring  partner  of  a  firm  is  not 
exonerated  from  responsibility  for  sub- 
sequent engagements  made  in  the  name 
of  the  partnership  with  persons  pre- 
viously in  the  habit  of  dealing  with  it, 
unless  special  notice  of  the  withdrawal 
be  given  them.  Denman  v.  Dosson,  19 
La.  Ann.  9;  Pope  v.  Risley,  23  Mo.  185. 

A  retiring  partner  must  use  proper 


diligence  to  inform  the  public.  The 
extent  of  diligence  must  be  measured 
with  a  reasonable  regard  to  circum- 
stances, and  ought  not  to  be  brought 
down  to  the  inflexible  standard  of  pub- 
lication at  the  partnership  domicile, 
where  such  standard  would  expose  the 
public  to  an  inequitable  risk.  Grinnan 
V.  Baton  Rouge  Co.,  7  La.  Ann.  638. 

Where  a  notice  of  a  change  of  firm 
name  is  relied  on  to  exonerate  one  who 
has  been  a  partner,  such  change  must 
indicate  that  ne  has  withdrawn  from  the 
business,  so  as  to  put  dealers  with  the 
concern  upon  inquiry.  American,  &c., 
Co.  V.  Wortendyke,  24  N.  Y.  550. 

Where  the  withdrawal  of  one  partner 
from  a  firm  is  concealed,  he  remains 
jointly  liable  upon  debts  contracted 
afterwards  to  parties  not  aware  of  such 
withdrawal.  Buffalo  City  Bank  v.  How- 
ard, 35  N.  Y.  500. 

A  commission  firm  sent  "  price-cur- 
rents" to  all  shippers  who  had  dealings 
with  it.  These  gave  the  firm  name  as 
well  as  the  names  of  the  individual  part- 
ners. Plaintiff  had  received  these  lists 
prior  and  subsequent  to  June,  1882. 
On  .June  5th,  1885,  he  made  them  a 
consignment.  One  of  the  partners  re- 
tired in  February,  and  another  in  No- 
vember, 1882,   and   the   third   about   a 


364 


CHAP.  II.,  §  III.]  NOTICE   OF    DISSOLUTION. 


221* 


Old  customers  entitled  to  special  notice. — An  old  customer,  how- 
ever, is  entitled  to  a  more  *specific  notice  than  a  person 
-I  who  never  dealt  with  the  firm  at  all ;  (z)  and  in  considering 


year  later.  The  business  was  continued 
under  the  old  name,  wilh  their  consent. 
After  November,  1883,  the  lists  sent 
plaintiff  no  longer  showed  the  indi- 
vidual names,  but  in  all  other  respects 
were  the  same.  The  partnership  was 
formally  dissolved  July  1st,  1884,  and 
on  that  date  notices  were  published  in 
the  local  papers  and  circulars  mailed  to 
correspondents.  Plaintiff  did  not  receive 
a  copy  of  the  circular,  nor  had  he  any 
knowledge  of  any  change  in  the  firm 
when  he  made  the  shipment  of  June 
5th,  1885.  Hdd,iha,t  plaintiff  was  en- 
titled to  notice  of  the  several  changes  in 
the  firm;  and  having  made  the  ship- 
ment in  good  faith,  and  on  the  credit  of 
the  firm,  he  was  entitled  to  a  recovery 
against  all  the  members  for  the  conver- 
sion of  the  proceeds  of  its  sale.  Bloch 
V.  Price,  32  Fed.  Rep.  562. 

In  Parkin  v.  Carruthers  (3  Esp.  248, 
249)  Mr.  Justice  Le  Blanc  said :  "  The 
principle  on  which  I  proceed  is  this : 
that  there  was  a  partnership  subsisting 
under  the  firm  of  Parkin,  Campbell  & 
Co.,  which  continued  after  the  retirement 
of  John  Campbell.  The  rule  of  law  is 
clear  that  where  there  is  a  partnership 
of  any  number  of  persons,  if  any  change 
is  made  in  the  partnership,  and  no 
notice  is  given,  any  person  dealing  with 
the  partnership,  either  before  or  after 
Buch  change,  has  a  right  to  call  upon  all 
the  parties  who  at  first  composed  the 
firm."  In  summing  up  to  the  jury,  the 
same  judge  laid  it  down  as  the  law  on 
the  subject "  that  if  the  plaintiff  advanced 
the  money,  even  after  the  time  that  one 
of  the  partners  had   retired,  if  he  did 


not  know  of  such  retirement,  he  had  a 
right  to  sue  all  who  before  constituted 
the  partnership.  In  point  of  fact,  in 
this  case,  John  Campbell  had  retired  ; 
but  still,  if  this  was  really  a  partner- 
ship, and  the  money  was  lent  to  the  per- 
sons carrying  on  trade  under  that  firm, 
all  were  liable." 

Again,  in  Carter  v.  Whalley  (1  B  & 
Ad.  11),  Mr.  Justice  Parke  said  :  "The 
plaintiff  was  bound  to  show  an  accept- 
ance by  four  parties  ;  that  is,  that  Vey- 
sey,  who  did  accept  the  bill,  was  author- 
ized to  do  so  by  the  three  others  named 
in  the  declaration.  Saunders  had  given 
no  direct  authority  ;  he  was  not  a  part- 
ner at  the  time.  But  he  may  by  his 
conduct  have  represented  himself  as 
one,  and  induced  the  plaintiff  to  give 
him  credit  as  such,  and  so  be  liable  ta 
the  plaintiff.  Such  would  have  been 
the  case  if  he  had  done  business  with 
the  plaintiff  before,  as  a  member  of  the 
firm,  or  had  so  publicly  appeared  as  a 
partner  as  to  satisfy  a  jury  that  the 
plaintiff  must  have  believed  him  to  be 
such ;  and  if  he  had  suffered  the  plain- 
tifl'  to  continue  in  and  act  upon  that 
belief,  by  omitting  to  give  notice  of  his 
having  ceased  to  be  a  partner,  after  he 
really  had  ceased,  he  would  be  respon- 
sible for  the  consequences  of  his  original 
representation,  uncontradicted  by  a  sub- 
sequent notice.  But  in  order  to  render 
him  liable  on  this  ground,  it  is  necessary 
that  he  should  have  been  known  as  a 
member  of  the  firm  to  the  plaintiffs, 
either  by  direct  transactions  or  public 
notoriety.  In  the  present  instance  that 
was  not  so.     The  name  of  the  company 


(2)  Graham  v.  Hope,  Peake  154. 


365 


222^ 


TER.^riNATIOX   OF    LIABILITY. 


[book  IL, 


whether  notice  of  dissokition  or  retirement  is  or  is  not  sufficient  a 
distinction  must  be  made  according  as  the  person  souo-ht  to  be 
affected  by  notice  was  or  was  not  a  customer  of  the  old  firm. 

When  a  known  partner  retires,  or  a  partnership  is  dissolved 
notice  of  the  fact  is  usually  given  to  the  world  at  large  by  adver- 
tisement, and  to  old  customers  by  some  special  communication. 28 


gave  no  information  as  to  tlie  parties 
composing  it,  and  the  plaintifl'  did  not 
show  that  Saunders  had  dealt  with  him 
in  the  character  of  a  partner,  or  liad 
held  himself  out  so  publicly  to  be  one 
as  that  the  plaintiff  must  have  known 
it.  Carter,  the  plaintiff,  lived  at  Bir- 
mingham ;  it  should  have  appeared 
that  there  had  been  such  a  dealing  at 
that  place  by  Sanmlers,  or  that  his  con- 
nection witli  the  iMiiiiiiny  had  been  so 
generally  known  ili.ie  tliat  a  knowledge 
of  it  by  Carter  must  have  been  pre- 
sumed. There  having  been  no  evidence 
for  the  jury  on  these  points,  I  think  the 
nonsuit  was  right." 

28.  Old  customers  entitled  to  special 
notice. — It  is  a  well-established  rule  that 
to  affect  the  rights  of  one  dealing  with  a 
partnership  firm,  actual  notice  of  its  dis- 
solution must  be  brought  home  to  him. 
Johnson  ■;;.  Totten,  3  Cal.  34.3 ;  Page  v. 
Brant,  18  111.  37;  Williams  v.  Bowers, 
15  Cal.  321 ;  Ennis  v.  Williams,  30  Ga. 
691 ;  Lowe  v.  Penny,  7  La.  Ann.  356 ; 
Skannel  v.  Taylor,  12  Id.  773 ;  Reilly  v. 
Smith,  16  Id.  31 ;  Zallar  v.  Janvrin,  47 
N.  H.  324 ;  Vernon  v.  Manhattan  Co., 
17  Wend.  (N.  Y.)  524;  VVardwell  v. 
Haight,  2  Barb.  (N.  Y.)  549 ;  Como  v. 
Port  Henry  Iron  Co.,  12  Id.  27 ;  Fel- 
bretch  v.  Armstrong,  5  Robt.  (N.  Y.) 
339  ;  Williams  v.  Birch,  6  Bosw.  (N.  Y.) 
299 ;  Schieffelin  v.  Stevens,  1  Winst.  (N. 
C.)  No.  1,  106;  Little  ;•.  Clarke,  36  Pa.  St. 
114;  White  v.  Murphy,  3  Rich.  (S.  C.) 
369;  Hutchins  v.  Hudson,  8  Humph. 
(Tenn.)  426;  Kirkman  v.  Snodgrass,  3 


Head  (Tenn.)  370;  Tudor  v.  While,  27 
Tex.  584 ;  Prentiss  v.  Sinclair,  5  Vt.  149 ; 
Austin  V.  Holland,  69  N.  Y.  571 ;  Bank 
of  Commonwealth  v.  Mudgett,  44  N.  Y. 
514;  Carmichael  v.  Greer,  55  Ga.  116; 
Davis  V.  Willis,  47  Tex.  154;  Dickin- 
son V.  Dickinson,  25  Gratt.  (Va.)  321; 
Denman  v  Dosson,  19  La.  Ann.  9  ;  Epps 
V.  Dillaye,  6  Barb.  (N.  Y.)  244  ;  Holland 
V.  Long,  57  Ga.  36 ;  Kenney  v.  Atwater, 
77  Pa.  St.  34 ;  Pope  v.  Risley,  23  Mo. 
185  ;  Polk  V.  Oliver,  56  Miss.  566 ;  Re 
Krueger,  2  Low.  (U.  S.)  66 ;  Stewart  v. 
Sonneborn,  51  Ala.  126 ;  Shamburg  v. 
Ruggles,  83  Pa.  St.  148. 

Publication  of  notice  of  dissolution  in 
a  newspaper,  at  the  place  where  the 
business  is  carried  on,  is  not  sufBcient  to 
relieve  a  retiring  partner  from  liability 
for  subsequent  transactions  in  the  firm 
name  with  one  having  dealings  with  the 
firm  prior  to  the  dissolution ;  in  such 
case  notice  must  be  brought  home  to  the 
dealer,  or  it  must  appear  that  facts  came 
to  his  knowledge  sufficient  to  advise 
him,  or  to  give  him  reason  to  believe 
that  a  dissolution  had  taken  place. 
Austin  V.  Holland,  69  N.  Y.  571.  575; 
Gilchrist  v.  Brande,  58  Wis.  184. 

To  dealers,  actual  notice  is  required  ; 
publication  in  a  paper  which  has  no 
circulation  in  the  creditor's  neighbor- 
hood is  not  suflScient.  Richards  v.  But- 
ler, 65  Ga.  593. 

Who  are  deemed  old  customers  or 
dealers. — The  retiring  partner  need  not 
notify  persons  who  deal  with  the  firm 
for  the  first  time  after  dissolution,  unless 


366 


€HAP.  II.,  §  III.]  NOTICE   OF    DISSOLUTION.  222* 

Fubllc  notices  by  advertisement. — Public  notice  given  by  adver- 
tisement in  the  "  Gazette  "  is  sufficient,  not  only  against  all  who  can 

he  permits  his  name  to  be  used,  or  so  of  the  note,  that  the  firm  was  dissolved, 
acts  as  to  induce  them  to  believe  that  he  is  inadmissible  to  prove  a  dissohition 
is  a  member  of  the  firm.  Gaar  v.  Hug-  when  no  notice  is  shown  to  the  plaintifi', 
gins,  12  Bush  (Ky.)  259.  the  payee.     Pursley  v.  Ramsey,  31  Ga. 

A  bank  with  which  a  firm  has  for  403. 
several  years  kept  an  account,  wherein  The  f\icts  that  plaintiff,  in  dealing 
the  firm  is  credited  with  the  amounts  with  a  partnership  of  which  defendant 
deposited  by  it,  and  charged  with  the  was  a  member,  did  not  know  that  defend- 
amounts  withdrawn,  is  a  dealer  with  the  ant  was  the  responsible  party  in  the  firm, 
firm,  within  the  meaning  of  the  rule  re-  and  that  the  firm  owed  plaintiff  nothing 
quiring  actual  notice  of  the  dissolution  at  the  time  of  its  dissolution,  do  not  re- 
of  a  firm  to  be  given  to  all  persons  who  lieve  defendant  of  the  necessity  of  giving 
had  previously  been  dealers  with  it.  plaintiff  actual  notice  of  the  fact  of  such 
This  is  especially  so  where,  on  the  dis-  dissolution.  Elkinton  v.  Booth  (Mass.), 
solution  of  the  firm  (Martin  Herz  &  Co.),    10  N.  E.  Rep.  460. 

Martin  Herz  retires,  and,  by  agreement,  Instances.— The  defendants  had  been 
his  former  partner  carries  on  the  busi-  partners  previous  to  March,  1857,  at 
ness  under  the  former  firm  name.  Nat.  which  time  they  dissolved  partnership, 
Shoe  and  Leather  Bank  v.  Herz,  24  Hun  and  advertised  the  dissolution  in  a  news- 
(N.  Y.)  260.  But  the  fact  that  a  bank  paper  published  in  the  town  where  they 
has  discounted  notes  bearing  the  names  had  done  business.  The  business  was 
of  a  partnership  does  not  constitule  them  continued  by  one  of  the  partners,  who, 
dealers,  so  as  to  require  actual  notice  of  in  the  fall  of  1857,  bought  coal  of  the 
dissolution  to  exonerate  a  retiring  part-  plaintiffs,  which  the  latter  sold  with  no 
ner.  City  Bank  of  Brooklyn  v.  McChes-  knowledge  of  the  dissolution,  and  on  the 
ney,  20  N.  Y.  240 ;  Same  v.  Dearborn,  credit  of  the  partnership.  The  plain- 
Id.  244.  But  see  Mechanics'  Bank  v.  tiffs  had  sold  coal  in  one  instance  to  the 
Livingston,  33  Barb.  (N.  Y.)  458.  defendants  before  the  dissolution,  which 

Where  a  notice  of  dissolution  is  not  was  the  only  dealing  they  had  had  with 
given  to  an  employee  of  the  firm,  the  them,  but  the  defendants  had  been 
retiring  partner  remains  liable  to  such  regular  customers  of  a  firm  which  sold 
employee  for  his  compensation.  Austin  coal  at  the  same  place,  and  to  which  the 
V.  Holland,  69  N.  Y.  511.     •  plaintiffs  had  succeeded,  the  former  firm 

A  client  who  gives  a  note  to  a  firm  of  having  consisted  of  one  of  the  plaintiffs 
attorneys  to  collect  may  hold  either  of  and  one  A,  and  the  present  firm  of  the 
them  for  the  proceeds,  notwithstanding  same  plaintiff  and  one  B,  who  had,  for 
a  subsequent  dissolution  of  the  firm  some  years,  been  a  clerk  of  the  former 
which  has  not  been  brought  to  his  firm.  Held,  that  the  plaintiffs  were  to 
knowledge.  Waldeck  v.  Brande,  61  be  regarded  as  having  had  "former 
Wis.  579.  dealings"  with  the  defendants,  and  that 

In  an  action  on  a  note  signed  by  a  they  could  be  affected  only  by  actual 
firm,  evidence  that  one  partner  told  notice  of  the  dissolution.  Held,  also, 
■several  persons,  prior  to  the  execution    that  the  lapse  of  time  between  the  disso- 

367 


222*                               TERMINATION  OF    LIABILITY.                    [BOOK    li., 

be  shown  to  have  seen  it,  l)ut  also  as  against  all  who  had  no  deal- 
ings with  the  old  firm,  whether  they  saw  it  or  not.  (a)  But  an  ad- 
vertisement in  any  other  paper  is  no  evidence  against  any  one  who 
cannot  be  shown  to  have  seen  it.  (6)  If,  however,  it  can  be  shown 
that  he  was  in  the  habit  of  taking  the  paper,  (c)  that  is  evidence  to 

lution  and  the  purchase  of  the  coal,  the  upon  the  note.  Bank  of  the  Common- 
fact  tliat  the  plaintiffs  were  doing  busi-  wealth  v.  Mudgett,  45.  Barb.  (N.  Y.) 
ness  in  the  same  town  with  the  defend-  663. 

ants,  and  the  fact  that  an  advertisement  Sufficiency  of  notice,  how  proved 
of  the  plaintiffs  stood  next  to  the  ad ver-  and  when  presumed.— It  matters  not 
tisement  of  the  dissolution  in  the  news-  hownoticeofdissolution  isgiven,  whether 
paper ;  although,  to  be  considered  in  by  the  retiring  partners  or  in  any  other 
determining  whether  the  plaintiffs  had  way,  provided  actual  notice  of  the  fact 
actual  notice,  were  of  no  avail  in  law  of  dissolution  is  brought  home  to  former 
against  the  fact  that  they  had  no  actual  customers  and  correspondents.  Holt- 
knowledge  of  the  dissolution.  Lyon  v.  greve  v.  Wilkner,  85  111.  471.  S.  P., 
Johnson,  28  Cortn.  1.  Young  v.  Tibbitts,  32  Wis.  79;  and  see 

Where  a  small  amount  of  goods  has  Ransom  v.  Loyless,  49  Ga.  47J. 

been  sold  to  a  partnership  without  any  To  charge  a  person  with  notice  of  dis- 

fixed  period  of  credit,  but  not  paid  for  solution  given  to  his  agent,  the  authority 

till    some    months    after   the    sale,    the  of  the  agent  to  act  for  his  principal  in 

vendors  of  the  goods  are  properly  dealers  receiving  such   notice   must  be   shown, 

with  the  partnership,  and  must  receive  St-ewart  v.  Sonneborn,  49  Ala.  178. 

actual  notice  of  the  retirement  of  a  mem-  Notice  of  dissolution  of  a  firm  to  one 

her  to  release  him  from  his  liability  to  of  its  customers  may  be  inferred  from 

them  as   a  partner,   upon   sales  to   the  circumstances.     Coddington  v.  Hunt,  6 

partnership    subsequent    to    his    retire-  Hill  (N.  Y.)  595;   Mauldin  v.  Branch 

ment.     Clapp  v.  Rogers,  12  N.  Y.  283 ;  Bank,  2  Ala.  502. 

S.  C,  1  E.  D.  Smith  549.  Where  the  facts  are  ascertained,  it  is 

Where  a  firm  had  been  dealers  with  a  question  of  law  whether  notice  of  dis- 

a  bank  in  their  copartnership  business,  solution  is  reasonable  or  not.     Mowatt 

and    their    character    as    partners    was  r.  Howland,  3  Day  (Conn.)  353. 

known  to  the  bank,  and   it  was  in  the  What  is  a  sufficient  notice  to  previous 

bank-book  of  the  firm  that  a  note  was  dealers  with  a  firm  of  its  dissolution  by 

entered   as  having  been  discounted  on  the  retirement  of  one  of  the  partners, 

their  behalf,  the  signature  of  the  firm  see  Hier  v.  Odell,  18  Hun  (N.  Y.)  314. 

being  endorsed  thereon— it  was  held,  in  (a)  Godfrey  v.  Turnbull,  1  Esp.  371  ; 

a  suit  to  charge  the  firm  as  endorsers  of  Wrightson  v.  Pullan,  1  Stark.  375 ;  God- 

the  note,  that  the  relation  of  the  firm  to  frey  v.  Macauley,  1  Peake  N.  P.  209 ; 

the  bank  was  such  as  to  require  notice  of  Newsome  v.  Coles,  2  Camp.  617. 

dissolution  to  be  given  to  the  bank  ;  and  (6)  Leeson  v.  Holt,  1  Stark.  186  ;  Boy- 

that  an  advertisement  of  dissolution  in  dell  v.  Drummond,  2  Camp.  157,  and  11 

a  newspaper  was  not  snflBcient  to  relieve  p]ast  144,  note, 

one  of  the  partners  from  his  liability  (c)  Showing  that  the  paper  circulated 

368 


CHAP.  II.,  §  III.]  NOTICE    OF    DISSOLUTION. 


222* 


go  to  the  jury  of  his  having  seen,  not  only  the  particular  paper  con- 
taining the  advertisement,  but  also  the  advertisement  itself;  (d)  and 
if  the  jury  are  satisfied  that  he  saw  the  advertisement,  that  will  be 
sufficient,  although  no  advertisement  was  inserted  in  the  "  Ga- 
zette." (e)  29 


in  his  neighborhood  goes   for  nothing  sign,   publication   in    a   newspaper,   or 

alone.     Norwich  and    Lowestoft  Co.  v.  oilierwise.      Private    notice    to   former 

Theobald,  Moo.  &  M.  153.  dealers  will  not  affect  subsequent  ones. 

(d)  See  Jenkins  v.  Blizard,  1  Stark.  The  sufficiency  of  the  notice  is  for  the 

418,  where,  however,  the  plaintiff  had  a  jury  to  determine.     Polk  v.  Oliver,  56 

verdict ;  Rowley  v.  Home,  3  Bing.  2.  Miss.  566. 


(e)  Rooth  V.  Quin,  7  Price  193. 

29.    Public    notices    by   advertise- 


Proof  of  the  notice  of  a  dissolution  in 
a  daily  newspaper  is  competent  on  the 


ment. — Notice  of  the  dissolution  of  a    question  whether  a   certain  individual 


partnership    by    publication    in     some 
newspaper    of    general    circulation    is 


was   aware   of    the   dissolution  or  not. 
Smith  V.  Jackman,  138  Mass.  143.     The 


conclusive  upon  all   persons  who  have  publication  of  the  notice  in  a  newspaper 

not  had  dealings  with  the  firRi.    Shurlds  taken    by    the   plaintiffs  is  a  fact  from 

V.  Tilson,  2  McLean  (U.  S.)  458 ;  Wat-  which  the  jury  may  infer  actual  notice, 

kinson  I'.  Bank  of  Pennsylvania,  4  Whart.  Treadwell  v.  Wells,  4  Cal.  260;  Page  v. 

(Pa.)  482  ;  Gallicott  v.  Planters'  and  Me-  Brant,  18  111.  37.    See  Hutchins  v.  Bank 

chanics'  Bank,  1  McMull.  (S.  C.)  209;  of  Tennessee,  8  Humph.   (Tenn.)  418. 

Mauldin  v.  Branch  Bank,  2  Ala.  502 ;  But  notice  of  dissolution,  published  in  a 

Lucas  V.  Bank  of  Darien,  2  Stew.  (Ala.)  newspaper  and  accidentally  reaching  a 

280  ;  Lansing  v.  Gaine,  2  Johns.  (N.  Y.)  bank  director,  will  not  affect  the  bank. 


300;  Prentiss  v.  Sinclair,  5  Vt.  149; 
Graves  v.  Merry,  6  Cow.  (N.  Y.)  701. 
And  to  those  who  had  such  dealings. 
Martin  v.  Walton,  1  McCord  (S.  C.)  16. 
To  avoid  liability  to  any  one  dealing 
with  the  firm  on  the  faiih  of  his  mem- 


National  Bank  v.  Norton,  1  Hill  (N.  Y.) 
572. 

Evidence  that  notice  of  the  withdrawal 
of  a  partner  was  published  in  a  news- 
paper of  the  town  in  which  the  firm  did 
business,  and  a  copy  of  the  paper  sent  to 


bership,  the  retiring  partner  must  give  a  customer  in  another  town,  with  a  red 

general  notice  to  the  public ;  notice  to  line   drawn    round   the   notice    to   call 

the  former  customers  only  is  not  enough,  attention  thereto,  is  insufficient  to  prove 

Backus  V.  Taylor,  84  Ind.  503.  actual    notice.     Hayues    v.    Carter,    12 

Publication   of  such   a   notice    as   is  Heisk.  (Tenn.)  7.     But  it  raises  a  pre- 

likely  to  make   the   fact  of  dissolution  sumption  of  notice,  but  one  which  may 

generally    known    in    the   locality    con-  be  repelled  by  proof  that  the  notice  was 

cerned,  and    to   those  who   have   dealt  not  in  fact  received.    Austin  v.  Holland, 

with  the   firm,  is   sufficient.     Solom   v.  69  N.  Y.  571. 

Kirkwood,  55  Mich.  256.  A  party  will  not  be  affected  by  notice 

The  notice  must  be  such  as  to  advise  of  the  dissolution  of  a  partnership  by 

the   public  of  the    fact   of  dissolution  the  certificate  merely  of  the  editors  of  a 

either   by  changing  the   name  on   the  newspaper  that  a  notice  of  the  dissolu- 

369  24 


222^ 


TERMIXATIOX    OF    LIABILITY 


[book    II., 


Such  notice  7iot  indispensable. — An  advertisement,  moreover,  is  not 
indispensable;  its  place  may  be  supplied  by  something  else.  Thus, 
a  change  in  the  name  of  a  firm  painted  on  its  counting-ho.;se,  ac- 
companied by  a  removal  of  the  business  of  the  old  firm  (for  the 
purpose  of  winding  up),  and  coupled  with  announcements  of  the 
change  by  circulars  sent  to  the  old  customers,  was  held  to  be  suffi- 
cient without  any  advertisement  as  against  a  person  who  had  not 


tion  was  published  in  it,  without  proof  was  admissible.    Lovejoy  v.  Spafford,  93 

that  the  party  sought  to  be  affected  took  U.  S.  430. 

or  read  the  paper.    Boyd  v.  McCann,  10        Two  partners  of  a  firm  resided  in  New 

Md.  118.  York,  and  the  third  resided  in  Norwich, 

Where,  in  an  action  on  a  book  account  in  Connecticut,  their  usual  place  of  doing 

against  two  copartners,  one  defended  on  business.     Upon  dissolution,  notice  was 

the  ground  of  a  dissolution  of  the  part-  given  for  several  weeks  successively  in 

nership  and    notice   to   plaintiff  before  two  newspapers,  one  printed  at  Norwich 

goods  bought,  proof  of  advertisement  of  and  the  other  at   New   London,  in  the 

dissolution,  in  a  paper  which  plaintiff  vicinity  of  Norwich.     One  of  the  New 

did  not  take,  or  of  defendant's  declara-  York  partners  afterwards  endorsed  a  bill 

tions  to  plaintiff  that  he  was  going  out  of  exchange  in  New  York  with  the  com- 

of  the  firm,  but  that  his  money  would  pany  name,   but   whether  the  entiorsee 

remain  in  it,  will  not  amount  to  notice,  had  or  had  not  actual  notice  of  the  dis- 

Williamson  v.  Fox,  38  Pa.  St.  214.  solution,  or  whether  he  had  ever  been  a 

An  act  of  Canada,  in  relation  to  the  correspondent  of  the  company,  did  not 

registration  of  notice  of  dissolution  of  a  appear.     Held,  that  these  facts  constitu- 

firm,  was  held  not  to  affect  the  rights  of  ted   reasonable   notice   to   him,  and    to 

the  Vermont  plaintiffs  in  a  suit  brought  every  person  not  a  correspondent  of  the 

in  that  state  against  members  of  a  Canada  company.     Mowatt  v.  Howland,  3  Day 

firm    on   a   note    payable  in  Montreal.  (Conn.)  353. 


Wait  V.  Brewster,  31  Vt.  516. 

Illustrations. — A,  having  had  no 
previous  dealings  with  a  firm,  but  hav- 
ing heard  of  its  existence,  and  who  com- 
posed it,  sold  goods  to  one  of  the  part- 


Father  and  son  bore  the  same  name, 
and  the  father  sold  out  his  business  to 
•the  son,  publishing  a  notice  of  his  retire- 
ment in  two  local  newspapers.  The  son 
continued  to  use  the  old   sign  and  his 


ners,  and  received  in   payment  therefor  father's  letter-heads,  and  bought  a  bill 

a  draft  by  him  drawn  upon  the  firm,  of  goods,  in  his  father's  presence,  from 

and  accepted  in  its  name.     At  the  time  a  drummer   whose  employer  knew  the 

of  the  transaction  the  firm  was  in  fact  father.     There  was  no  evidence  of  any 

dissolved ;  but  A  had  no  notice  thereof,  intention    to   deceive.      Held,   that   the 

Held,  that  in  order  to  protect  a  retired  father  was  not  liable  for  the  goods  so 

partner  against  such  acceptance  of  the  purchased.      Preston   v.   Foeliuger,    24 

draft  at  the  suit  of  A,  evidence  tending  Fed.  Eep.  680.     But  see  Lindmeier  v. 

to  show  a  public  and  notorious  disavowal  Monahan,  64  Iowa  24. 
of  the  continuance  of  the  partnership 

370 


CHAP,  ir.,  §  III.]  AS   REGARDS   PAST   ACTS.  222* 

been  an  old  customer,  and  who  was  not  proved  to  have  had  any- 
distinct  notice.  (/)  30 

^Special  notices. — A.s  against  persons  who  dealt  with  the  r-^nno 
firm  before  any  change  in  it  took  place,  an  advertisement,  ^ 
without  more,  is  of  little  or  no  value,  whether  it  be  in  the  "  Gazette  " 
or  elsewhere,  {g)  But  if  notice  in  point  of  fact  can  be  established, 
it  matters  not  by  what  means ;  for  it  has  never  been  held  that  any 
particular  formality  must  be  observed.  If  an  old  customer  can  be 
shown  to  have  seen  an  advertisement,  that  will  be  sufficient,  and 
evidence  that  he  took  in  a  certain  paper  is  some  evidence  that  he 
knew  of  a  dissolution  advertised  therein,  (/i)  Again,  general 
notoriety,  a  change  in  the  name  of  the  firm  and  advertisements, 
coupled  with  the  execution  of  powers  of  attorney  to  the  new  firm, 
were  held  (Bolland,  B.,  dissentiente)  to  warrant  the  jury  in  finding 
knowledge  by  an  old  customer  of  a  change  in  the  old  firm,  (i)  So, 
in  the  case  of  bankers,  a  change  in  the  name  of  the  firm  appearing 
on  the  face  of  the  cheques  used  by  their  customers  has  been  held 
sufficient  notice  to  an  old  customer  who  had  drawn  cheques  in  the 
new  form,  (k)  31 

Stamp  on  advertisements. — With  respect  to  advertisements,  it  may 
be  here  remarked  that  an  advertisement  of  an  agreement  to  dissolve 

(/)  M'lver  V.  Humble,  16  East  169;  office,  is   not  conclusive   evidence  that 

but  see  Gorham  v.  Thompson,  1  Peake  the  latter  received   it.     Eckerly  v.  Al- 

IST.  P.  60.  corn,  62  Miss.  228 ;  Austin  v.  Holland, 

30.  Such  notice  not  indispensable. —  69  N.  Y.  576.  The  presumption  that  a 
It  matters  not  how  the  creditor  learns  notice  duly  mailed  to  a  firm  creditor 
of  the  dissolution  of  the  partnership ;  was  received  by  him  may  be  rebutted 
and  it  is  error  for  a  judge  to  charge  in  by  proof  that  it  was  not  received,  and 
such  a  way  as  to  lead  the  jury  to  think  the  question  is  properly  left  to  the 
a  particular  kind  of  notice  necessary,  jury.  Meyer  v.  Krohn,  114  111.  574. 
Davis  V.  Keyes,  38  N.  Y.  94.  And  the  fact   that  a  firm   was   in   the 

(g)  Graham  v.  Hope,  Peake  154.  habit  of  making  "  monthly  reports  or 

{h)  Ante  note  [d).  returns  to  persons  consigning  goods  to 

{i)  Hart  v.  Alexander,  2  Mees.  &  W.  them "  does  not  show  notice  to  a  cred- 

484 ;  7  Car.  &  P.  746.  itor  of  a  change  in  the  firm.     Business 

(k)  Barfoot  v.  Goodall,  3  Camp.  147.  letters,  however,  written  to  him  by  the 

31.  Special  notices. — The  depositing  new  firm  are  admissible  in  evidence 
in  the  post-office  of  a  letter,  prepaid,  for  that  purpose.  Hall  v.  Jones,  66 
containing  a  notice  of  dissolution,  prop-  Ala.  493. 

erly    addressed   to   the   creditor's    post- 

371 


223*  TERMINATION    OF    LIABILITY.  [bOOK    IL, 

is  not  admissible  in  evidence  unless  stamped,  but  that  an  advertise- 
ment of  an  actual  dissolution  is  admissible  without  a  stamp.  (I) 

b.  Termination  of  liability  as  to  past  acts. 

Termination  of  partner^ s  liability  in  respect  of  past  transactions. — 
When  once  it  can  be  shown  that  liability  has  attached  to  any  part- 
ner, the  07ms  of  proving  that  such  liability  has  ceased  is  upon  that 
partner  or  those  representing  him.  (m)  The  events  which  have  to 
be  considered  with  reference  to  this  subject  may  be  reduced  to  four 
classes,  viz. — 

1.  Events  over  which  his  creditor  has  no  control,  e.  g.,  the  death 
or  bankruptcy  of  the  partner. 

2.  Dealings  and  transactions  between  tlie  creditor  and  the  part- 
ner whose  liability  is  in  question. 

*004"l       *'^'  ^salings  and  transactions  between  the  creditor  and 
-■  the  other  members  of  the  firm ;  and, 
4.  Lapse  of  time. 

The  second  of  these  classes  of  events  does  not  require  special 
notice.  The  effect  of  bankruptcy  and  death  will  be  examined  in  a 
subsequent  part  of  this  work.  There  only  remain,  therefore,  to  be 
considered  here  the  third  and  fourth  classes  of  events  alluded  to.  32 

U)  May  V.  Smith,  1  Esp.  283 ;   Jen-  v.  Furranet,  1  Conn.  60. 

kins  V.  Blizard,  1  Stark.  418.  Where  partners  in  trade  take  a  lease 

(wi)  See  3  Mer.  619.  of  a  store,  and  afterwards  dissolve  the 

32.  In  general. — Three  persons  be-  partnership,  the  lease  or  the  stock  in 

ing  sued   as  partners,  proof  that  after  trade  does  not  cease  to  be  partnership 

part   of    the    account    sued    upon    was  property    as    against     the    rent    notes, 

created,  and  the  partnership  dissolved,  Boone  v.  Sirrine,  38  Ga.  121. 

the  retiring  partner  paid  the  others  a  If  attorneys  who  are  copartners  ac- 

sum  of  money  to   cover   his    responsi-  ce[it  a  retainer,  it  is  a  joint  contract, 

bility  for  the  firm  debts,  is  irrelevant  continuing   to   the    termination    of   the 

and  inadmissible.     Gooden  v.  Morrow,  suit,  and  neither  can  be  released  from 

8  Ala.  486.  the  obligations  they  have  assumed,  so 

If  one  partner  withdraw  from  the  co-  far  as  their  clients  are  concerned,  by  a 

partnership,  thereby  causing  its  dissolu-  dissolution  of  their  firm,  or  any  other 

tion,  he  continues  liable   for  the  non-  act  or  agreement   between   themselves. 

performance   of  an   executory  contract  Walker  v.  Goodrich,  16  111.  341 ;  Smyth 

previously  entered  into  by  the  copart-  v.  Harvie,  sup-a;  Morgan  v.  Roberts,  38 

nership,  in  tlie  same  manner  as  if  no  111.  65. 

dissolution   had  taken   place.     Whiting  As  to  when  a  dissolution  of  a  firm  by 

372 


CHAP.  II.,  §  III.]    APPROPEIATION    OF   PAYMENTS. 


224^ 


Termination  of  joint  obligations. — The  nature  of  an  obligation 
which  is  joint,  or  joint  and  several,  is  such  that  although  each  per- 
son subject  to  the  obligation  is  responsible  for  its  performance,  yet 
each  is  not  bound  to  perform  it  without  reference  to  the  question 
whether  it  has  already  been  performed  by  the  others.  Whether  the 
obligation  be  j-oint  or  joint  and  several,  it  has  only  to  be  performed 
once,  and  performance  by  any  one  of  the  persons  obliged  is  available 
as  a  defence  to  a  second  demand  made  against  t'he  others,  (n)  And 
not  only  is  a  joint  or  joint  and  several  obligation  at  an  end  when 
performed  by  one  of  the  persons  in  whom  it  resides,  but  whatever 
extinguishes  the  right  to  demand  performance  of  that  obligation 
extinguishes  the  obligation  itself  and  discharges  all  the  persons  in 
whom  it  resided,  (o)  But  an  event  which  merely  disables  a  creditor 
from  suing  one  of  several  persons  jointly,  or  jointly  and  severally, 


the  withdrawal  of  a  member  and  the 
transfer  of  his  interest  to  the  other  will 
constitute  such  an  abandonment  of  a 
■contract  between  the  firm  and  a  creditor 
as  will  excuse  the  latter  from  the  further 
observance  of  the  contract,  see  Turk  v. 
Nicholson,  30  Iowa  407. 

If  merchandise  be  consigned  to  and 
received  by  a  firm  to  sell  on  commission, 
a  partner  afterwards  retiring  cannot,  by 
notice  of  that  fact  to  the  consignor, 
avoid  the  liability  which  attached  to 
him  as  a  partner  on  receiving  the  goods, 
and  refusing  to  admit  evidence  of  such 
notice  is  not  error  in  the  court  trying  an 
action  founded  on  such  liability.  Dean 
V.  McFaul,  23  Mo.  76. 

Where  the  retiring  member  of  a  law 
firm  collects  money  for  a  client  without 
authority,  the  other  partners  remain 
liable  for  such  money.  Bryany  v. 
Hawkins,  47  Mo.  410. 

The  dissolution  of  a  law  partnership 
does  not  dissolve  the  relation  to  the 
client,  and  the  client  may  look  to  both 
partners  for  the  performance  of  a  duty 
confided  to  the  firm.  McCoon  v.  Gal- 
Ln.il ii,  29  Pa.  St.  293. 


A.  an  attorney-at-law,  associated  with 
B,  received  from  C  a  demand  for  collec- 
tion. A  retired  from  practice  and  left 
the  claim,  with  B,  who  became  copartner 
with  D,  and  B  and  D  brought  suit  and 
recovered  judgment  on  the  demand,  and 
the  sheriff  collected  the  money  on  exe- 
cution, and  paid  it  over  to  D.  Held,  in 
an  action  by  C  against  A  to  recover  the 
money  collected  on  execution,  that  the 
sheriff  was  justified  in  paying  the  money 
to  D,  and  that  A  was  liable  therefor. 
Wilkinson  v.  Griswold,  20  Miss.  669. 

The  defendants,  who  were  copartners, 
doing  business  as  factors  in  Charleston, 
employed  the  plaintifl"  and  contracted 
to  give  him  all  their  draying ;  they  after- 
wards dissolved  thei'r  partnership,  and 
the  new  firm  did  not  employ  him.  Held, 
that  the  contract  terminated  with  the 
partnership.  Holmes  v.  Caldwell,  8 
Rich.  (S.  C.)  247. 

(?i)  See,  as  to  payment  by  one,  Wat- 
ters  V.  Smith,  2  B.  &  Ad.  889  ;  Thorne 
V.  Smith,  10  C.  B.  659;  Beaumont  v. 
Greathead,  2  Id.  494. 

(o)  See  Cheetham  v.  Ward,  1  Bos.  & 
P.  630 ;   Ex  parte  Slater,  6  Ves.  146 ; 


373 


224*  TERMINATION   OF    LIABILITY.  [bOOK    II., 

indebted  to  him,  does  not  necessarily  extinguish  the  debt.  For 
example,  if  one  of  the  persons  indebted  becomes  bankrupt  and  ob- 
tains his  discharge,  although  his  liability  is  thereby  at  an  end,  yet 
the  other  persons  indebted  are  not  discharged  from  their  obligation 
to  pay.  (p)  So,  a  covenant  by  the  creditor  not  to  sue  one  of  several 
persons  liable  jointly,  or  jointly  and  severally,  does  not  extinguish 
the  creditor's  right  to  obtain  payment,  its  effect  only  being  to  give 
the  covenantee  a  right  to  be  indemnified  by  the  creditor  against  the 
conse*quences  of  an  exercise  of  his  right,  (q)  So,  if  the  r^^^^p. 
creditor  receives  from  one  of  several  debtors  part  of  the 
debt,  this  does  not  discharge  the  others  from  their  liability  to  pay 
the  residue,  (r) 

In  order  to  show  the  application  of  these  principles  to  the  dis- 
charge of  a  partner  from  a  liability  already  incurred  by  him,  it  will 
be  convenient  to  consider  the  effect  of 

1.  Payment. 

2.  Release. 

3.  Substitution  of  debtors  and  securities. 

4.  Lapse  of  time. 

An  examination  of  these  subjects  will  involve  an  inquiry  into 
the  mode  in  which  retired  partners  and  the  estates  of  deceased  part- 
ners cease  to  be  liable  to  creditors  of  the  firm  to  which  they  be- 
longed. 

L  Payment. 

Payment  by  one  partner  of  partnership  debts. — Payment  of  a 
partnership  debt  by  any  one  partner  discharges  all  the  others  if  the 
object  of  the  partner  paying  was  to  extinguish  the  whole  debt,  or 
if  he  made  the  payment  out  of  the  partnership  funds,  (s)  But  if  a 
firm  is  unable  to  pay  a  debt,  and  one  partner,  out  of  his  moneys, 
pays  it,  but  in  such  a  way  as  to  show  an  intention  to  keep  the  debt 

Ballam  v.  Price,  2  Moo.  235  ;    Cocks  v.  [q)  See  Lacy  v.  Kinaston,  1  Ld.  Raym. 

Nash,  9  Bing.  341  ;  Wallace  v.  Kelsall,  688 ;   Dean  v.  Newhall,  8  T.  R.   168  ; 

7  Mees.  &  W.  264;  Nicholson  v.  Revill,  Walmesley  v.  Cooper,  11  Ad.  &  E.  216. 

4  Ad.  &  E.  675.  (r)  See  Walters  v.  Smith,  2  B.  &  Ad. 

( p)  46  and  47  Vict.,  c.  52,  I  30,  cl.  4.  889. 

Crosse  v.  Smith,  7   East  256;   Noke  i;.  (s)  See  the  cases  cited  ante  p.  *224, 

Ingham,   1   Wils.  89 ;    1  Wms.  Saund.  note  (n). 
207,  a. 

374 


CHAP.  II.,  §  III.]    APPROPRIATION    OF    PAYMENTS. 


225^ 


alive  against  the  firm  for  his  own  benefit,  this  payment  by  him  will 
be  no  answer  to  an  action  brought  against  the  firm  by  the  creditor 
suing  on  behalf  of  the  partner  who  made  the  payment,  (t)  33 

Imputation  of  payment  made  by  one  partner  loith  money  of  firm. — 
If  a  partner  is  indebted  on  his  own  account  to  a  person  to  whom 
the  firm  is  also  indebted,  and  that  partner,  with  the  moneys  of  the 
firm,  makes  a  payment  to  the  creditor  without  specifying  the  account 
on  which  it  is  paid,  the  payment  must  be  taken  to  have  been  made 
on  the  partnership  account  and  must  be  applied  accordingly,  (u)  34 
*  Payment  by  new  firm  discharges  old  firm. — Inasmuch  as 
"^  -^  a  payment  by  A  of  B's  debt,  on  behalf  of  B,  enures  to  the 
benefit  of  B  if  the  creditor  accepts  the  money  and  B  does  not 
repudiate  the  payment,  {x)  it  follows  that  if  a  firm  is  indebted,  and 
by  the  retirement  of  the  original  partners  and  the  introduction  of 


(t)  Mclntyre  v.  Miller,  13  Mees.  &  W. 
725  ;  infra,  note  (y). 

33.  Payment  by  one  partner  of  part- 
nership debts.— A  creditor  of  a  firm, 
receiving  from  one  of  the  partners,  after 


34.  Whether  such  payment  applies 
to  firm  or  private  debts. — Where  a 
surviving  partner  makes  a  payment 
from  the  firm  assets  to  one  who  is  a 
creditor  both  of  the  firm  and  of  himself 


the  firm  is  dissolved,  the  paper  of  third  without  stating  to  which   indebtedness 

persons  in  payment  of  his  partnership  he  wishes  tjie  money  applied,  the  cred- 

demand,  and  in  exchange  for  the  paper  itor  is  bound  to  apply  it  to  the  firm  in- 

of  the  firm,   thereby  releases  the  other  debtedness.     Wiesenfeld  v.  Byrd,  17  So. 

partners.     But  if  the  paper  received  in  Car.  106. 

exchange  be  forged,  then  the  transaction        Where   the   partnership   funds    of    a 

is  void,  and  the  original  liability  of  all  firm  have  been  misapplied  by  a  member 

the  partners  revives.     Pope  v.  Nance,  1  of  the  firm  towards   the  payment  of  a 

Stew.  (Ala.)  354.  judgment  holden  by  the  creditor  of  the 

Two  partners   having   dissolved,   the  firm  against  him  for  his  individual  debt, 

liquidating  partner  gave  a  receipt  to  a  such    creditor  may,  on  the   application 

firm  creditor  on  a  note,  acknowledging  of  the  other  member  of  the  firm,  apply 

the   receipt   of   securities    sufficient   in  the  payment  to  his  demand  against  the 

amount  to  pay  the  note,  and  promising  firm,    and    enforce   his   judgment,    not- 

to  deliver  them  on  a  surrender  of  the  withstanding  a  receipt  given,  applying 

receipt.    Held,  such  payment  of  the  note  the   payment  on   account  of  the  judg- 

as  to  discharge  the  other  partner  from  ment.     Campbell  v.  Matheus,  6  Wend. 


his  liability  as  surety.    Colgrove  v.  Tall- 
man,  2  Lans.  (N.  Y.)  97. 

(u)  Thompson  v.  Brown,  Moo.  &  M- 
40.  See,  also,  Nottidge  v.  Prichard,  2 
CI.  &  F.  379,  affirming  Prichard  i'. 
Draper,  1  Kuss.  &  M.  191. 


(N.  Y.)  551. 

{x)  Co.  Litt.  207,  a.  See  Belshaw  v. 
Bush,  11  C.  B.  191 ;  Jones  v.  Broad- 
hurst,  9  C.  B.  193,  &c. ;  Kemp  v.  Balls, 
10  Ex.  607;  Lucas  v.  Wilkinson,  1 
Hurlst.  &  N.  420. 


375 


226*  TERMINATION   OF    LIABILITY.  [bOOK    IL, 

other  partners  a  wholly  new  firm  is  called  into  existence,  a  payment 
by  the  new  firm,  expressly  or  impliedly,  on  behalf  of  the  old  firm, 
of  the  debts  contracted  by  the  old  firm,  will  extinguish  its  debt  as 
between  that  firm  and  its  creditor.  But  if  there  are  circumstances 
showing  that  the  money  was  paid,  not  on  behalf  of  the  old  firm 
and  in  discharge  of  its  liability,  but  as  the  consideration  for  a  trans- 
fer to  the  new  firm  of  the  creditor's  right  against  the  old  firm,  the 
right  of  the  creditor  to  sue  the  old  firm  will  not  be  extinguished, 
but  can  still  be  exercised  for  the  benefit  of  the  new  firm,  {y) 

As  regards  discharge  by  payment,  it  is  important  to  bear  in  mind 
the  general  rules  relating  to  the  appropriation  of  payments,  and 
especially  the  rule  in  Clayton's  Case.  The  general  rules  upon  this 
subject  are  as  follows  :  {z) 

General  rules  as  to  appropriation  of  2^(^y^nents. — 1.  Where  one 
person  is  indebted  to  another  on  various  accounts,  the  debtor  is  at 
liberty  to  pay  in  full  whichever  debt  he  likes  first,  (a) 

2.  But  a  debtor  has  no  right  to  insist  on  paying  a  debt  partly  at 
one  time  and  partly  at  another ;  (6)  although  if  he  does  pay  a  debt 
in  part  and  the  creditor  accepts  the  payment,  the  debt  is  extin- 
guished to  the  extent  of  the  payment  thus  made  and  accepted,  (c) 

3.  The  right  of  a  debtor  to  appropriate  a  payment  to  whichever 
of  several  debts  he  prefers  can  only  be  exercised  at  the  time  of  pay- 
ment, not  afterwards,  {d) 

*4.  An  appropriation  by  a  debtor  at  the  time  of  payment  p^o.^- 
need  not  be  express,  but  may  be  inferred  from  the  nature  ^ 
of  the  debt  and  from  the  mode  and  circumstances  of  payment,  (e) 

5.  Where  the  debtor,  having  the  opportunity  so  to  do,  (/)  makes 
no  appropriation,  express  or  tacit,  at  the  time  of  payment,  the 

{y)  See  Lucas  v.  Wil-kinson,  1  Hurlst.  Mitchell  v.  Cullen,  1  Macq.  190. 

&  N.  420 ;  Mclntyre  v.  Miller,  13  Mees.  (6)  Dixon  v.  Clark,  5  C.  B.  365. 

&  W.  725,  where  one  partner  paid  a  debt  (c)  As  to  payments  of  so  much  in  the 

due   from   the   firm,  but   had    the  debt  pound,  see  infra. 

transferred  to  a  trustee  for  himself.  {d)  Peters  v.  Anderson,  5  Taunt.  596. 

(z)  For  more  detailed  information  the  (e)  lb.,  and  see  infra,  rule  8. 

reader  is  referred   to  an  article  by  the  (/)  This  is  essential.     See  Waller  v. 

author  in  the  Law  Magazine  for  August,  Lacy,  1  Man.  &  G.  54 ;  Young  v.  English, 

1855  (vol.  54,  p.  21).  7  Beav.  10. 

(a)  Peters  v.  Anderson,  5  Taunt.  596 ; 

376 


CHAP.  II.,  §  III.]    APPROPRIATIOX   OF   PAYMENTS.  22 7"^ 

creditor  is  entitled  to  appropriate  the  payment  to  whichever  debt  he 
pleases,  {g) 

6.  And  the  creditor  may  exercise  this  right  at  any  time  he 
likes,  (A)  but  when  he  has  once  exercised  it  and  given  notice  of  such 
exercise  to  the  debtor,  no  different  appropriation  can  be  made,  {i) 

7.  The  creditor  may  exercise  his  right  in  appropriating  a  pay- 
ment to  a  debt  barred  by  the  statute  of  limitations  rather  than  to 
one  that  is  not  so  barred ;  {k)  to  a  simple  contract  debt  rather  than 
to  a  specialty  debt ;  (l)  to  a  new  rather  than  to  an  old  debt ;  {in) 
to  a  debt  not  guaranteed  rather  than  to  one  that  is ;  (n)  and  to  a 
debt  not  bearing  interest  rather  than  to  one  which  does,  (o)  But  the 
debt  must  be  one  which  is,  or  if  not  barred  by  time  would  be,  en- 
forceable by  legal  proceedings ;  (jj)  and  one  which  exists  at  the  time 
the  payment  was  made ;  (g-)  and  one  which  is  then  ascertained  in 
amount ;  (r)  and  one  which  is  owing  by  the  debtor  and  not  by  other 
persons,  (s) 

*8.  In  the  absence  of  evidence  to  the  contrary,  an  appro- 
-'  priation  by  the  debtor  is  inferred,  and  the  right  of  the 
creditor   to    appropriate    differently  is    excluded  in  the  following 
amongst  other  cases : 

a.  Interest  is  presumed  to  be  paid  before  principal.  {£)  ^ 

(g)  See  Simson  v.  Ingham,  2  Bam.  &  (n)  Kirby   v.   Duke  of  Marlboro',  2 

C.  65,  and  the  other  cases  cited  in  the  Man.  &  S.  18 ;  Williams  v.  Rawlinson, 

next  few  notes.  3  Bing.  71 ;  Pease  v.  Hirst,  10  Barn.  & 

(h)  Phillpotts  f.  Jones,  2  Ad.  &  E.  41 ;  C.    122;    Re   Sherry,  ,25   Ch.   D.   692. 

Mills  V.  Fowkes,  5  Bing,  N.  C.  455.  Compare  Kinnaird  v.  Webster,  10  Ch. 

(i)  Simson  v.  Ingham,  2  Barn.  &  C.  D.  139. 

65.     See,  as  to  representations  made  by  (o)  Chase  v.  Cox,  Freem.  261 ;  Man- 

the  creditor,  Wickham  v.  Wickham,  2  ning  v.  Westerne,  2  Vern.  606. 

Kay  &  J.  478.  (p)  Wright  v.  Laing,  3  Barn.  &  C. 

(^-)  Mills  V.  Fowkes,  5  Bing.  N.  C.  165. 

455 ;   Williams  v.  Griffiths,  5  Mees.  &  {q)  Hammersley  v.  Knowlys,  2  Esp. 

W.  300;   Nash  v.  Hodgson,  Kay  650.  666. 

Such   an   appropriation,  however,  does  (r)  Goddart  v.  Hodges,  1  Cromp.  & 

not   amount   to    an    admission   by    the  M.  33. 

debtor  that  the  barred  debt  is  due,  and  (s)  See  infra,  rule  8  (d). 

consequently  does  not  take  that  debt  out  (t)  Bower  v.  Marris,  Car.  &  P.  351 ; 

of  the  statute;  seethe  last  three  cafses.  Thompson  r.  Hudson,  10  Eq.  497  ;  War- 

(l)  Peters  v.  Anderson,  5  Taunt.  596.  rant  Finance  Co.'s  Case,  4  Ch.  643. 

(m)  lb. 

377 


228^ 


TERMINATION    OF    LIABILITY. 


[book        Il.y 


b.  The  earlier  items  of  one  entire  account  are  presumed  to  be 
paid  before  the  later  items  of  the  same  account,  (w) 

c.  Money  coming  to  the  hands  of  a  creditor  by  the  realization  of 
a  particular  security  is  presumed  to  be  appropriated  to  the  debt 
thereby  secured,  (x) 

d.  Money  belonging  to  one  person  is  presumed  to  have  been  paid 
in  discharging  his  own,  and  not  another  person's  debt ;  and  where  a 
person  fills  several  characters,  the  character  in  which  he  held  the 
money  which  he  -paid  prima  facie  determines  the  debt  to  which  the 
payment  must  be  appropriated,  (y) 

e.  A  dividend  of  so  much  in  the  pound  on  several  debts  is  pre- 
sumed to  be  paid  in  respect  of  them  all,  and  must  be  applied 
accordingly,  [z)  35 


(u)  Clayton's  Case,  1  Mer.  585,  noticed 
infra, 

(x)  Brett  V.  Marsh,  1  Vern.  168 ;  Young 
V.  English,  7  Beav.  10;  Pearl  v.  Deacon, 
24  Beav.  186,  and  1  De  G.  &  J.  461. 

(y)  Borland  v.  Nash,  2  Fost.  &  F.  687 ; 
Nottidge  V.  Prichard,  2  CI.  &  F,  379; 
Goddart  v.  Cox,  2  Str.  1194;  Thompson 
V.  Brown,  Moo.  &  M.  40 ;  Bowes  v. 
Lucas,  Andr.  55.  Compare  Sterndale  v. 
Hankinson,  1  Sim.  393,  and  Beale  v. 
Caddick,  2  Hurlst.  &  N.  326,  where  the 
rule  in  Clayton's  Case  also  applied. 

(z)  Thompson  v.  Hudson,  6  Ch.  320 ; 
Hobson  V.  Bass,  Id.  792  ;  Raikes  v.  Todd, 
8  Ad.  &  E.  846  ;  Thornton  v.  McKewan, 
1  Hem.  &  M.  525;  P.aley  v.  Field,  12 
Ves.  435. 

35.  General  rules  as  to  appropria- 
tion of  payments.— In  his  able  treatise 
on  Partnership,  Mr.  CoUyer  says,  at 
page  321  :  "  To  render  an  appropria- 
tion of  payment  by  the  act  of  the  party 
valid,  it  must  be  made  at  the  time  of 
payment,  if  made  by  the  payor;  and 
within  a  reasonable  time  after  payment, 
if  made  by  the  payee.  Sir  William 
Grant  was  inclined  to  hold,  according 
to  the  principles  of  the  civil  law,  that 

3^ 


the  appropriation,  even  if  made  by  the 
payee,  must  be  made  at  the  time  of  pay- 
ment. But  cases  might  be  stated  where 
such  a  rule,  if  strictly  adhered  to,  would 
be  productive  of  injustice;  and  it  is 
manifestly  at  variance  with  the  decisions 
on  this  subject  in  the  courts  of  common 
law.  On  the  other  hand,  those  courts 
have  been  inclined  to  favor  the  creditor 
too  much,  and  have  in  many  cases  'ex- 
tended the  proposition — that  if  the 
debtor  does  not  apply  the  payment,  the 
creditor  may  make  the  application  to 
what  debt  he  pleases — much  beyond  its 
original  meaning,  so  as  in  general  to 
authorize  the  creditor  to  make  his  elec- 
tion when  he  thinks  fit.'  In  a  recent 
case,  however,  the  Court  of  King's  Bench 
came  to  a  very  just  decision  on  this  im- 
portant subject.  Thus,  in  Simson  t. 
Ingham,  an  action  on  a  bond  was 
brought  by  Bruce  &  Co.,  bankers,  against 
the  heirs  and  devisees  of  Benjamin  Ing- 
ham. The  bond  was  given  by  Ingham 
and  another,  bankers,  at  Huddersfield, 
to  the  plaintiffs,  their  London  corres- 
pondents, conditioned  for  remitting 
money  to  provide  for  bills,  and  for  the 
repayment  of  such  sums  as  Bruce  &  Co. 


CHAP.  II.,  §  III.]    APPROPRIATION    OF    PAYMENTS. 


228^ 


Rule  in  Clayton's  Case. — Of  these  rules  the  most  important  with 
reference  to  the  subject  matter  of  the  present  treatise  is  that  which 


might  advance  on  account  of  persons 
constituting  the  Huddersfleld  Bank. 
The  damages  were  assessed  by  an  arbi- 
trator at  £13,845,  subject  to  the  opinion 
of  the  court  upon  the  following  facts : 
The  house  of  Bruce  &  Co.  were  in  the 
habit  of  sending  to  the  Huddersfleld 
Bank  monthly  statements  of  their  ac- 
counts. Benjamin  Ingham  died  in  Sep- 
tember, 1811.  The  last  statement  sent 
previously  to  his  death  was  for  the  month 
of  August.  The  balance  of  that  account 
was  greatly  in  favor  of  Bruce  &  Co.  No 
alteration  in  the  account  was  made  in 
the  books  of  Bruce  &  Co.  immediately 
on  the  death  of  Benjamin  Ingham  ;  but, 
during  the  residue  of  that  month  and  a 
part  of  October,  the  remittances  made 
by  the  Huddersfleld  Bank,  and  the  pay- 
ments made  for  them  by  Bruce  &  Co., 
were  entered  in  continuation-  of  the 
former  account.  Before,  however,  any 
account  was  transmitted  to  the  Hudders- 
fleld Bank,  subsequent  to  that  for  Au- 
gust, Bruce  &  Co.,  in  consequence  of  a 
communication  with  their  solicitor, 
opened  a  new  account,  and  in  that  in- 
serted all  the  remittances  and  payments 
made  subsequent  to  the  death  of  Benja- 
min ;  and  in  November  they  transmitted 
to  the  Huddersfleld  Bank  statements  of 
two  accounts.  The  first  of  these  accounts 
was  thus  entitled  :  '  Debtors,  Messrs.  B. 
&  J.  Ingham  &  Co.  (old  account),  in  ac- 
count with  Bruce  &  Co.,  creditors  ;'  and 
the  first  item  on  the  debit  side  was  the 
balance  of  August.  The  second  account 
was  in  the  same  form,  but  entitled  '  new 
account.'  This  account  began  on  the 
16th  September,  without  any  balance 
brought  forward,  and  contained  the  re- 
mittances and  payments  made  during 
that  month,  subsequent  to  the  death  of 

3 


Benjamin,  and   also  those  made  in  the 
month  of  October.     From  this  time  the 
Old  and  new  accounts  were  kept  separate 
in  the  books  of  Bruce  &  Co.     The  Hud- 
dersfleld Bank  did  not  appear  to  have 
ever  objected  to  the  accounts  being  kept 
separately  by  Bruce  &  Co.,  although  in 
their  own  books  they  only  kept  one  ac- 
count.    The  arbitrator  was  of  opinion 
that,  under  these  circumstances,  the  bal- 
ance due  on  the  death  of  Benjamin  Ing- 
ham was  not  discharged  by  subsequent 
payments  by  the  new  firm.  Accordingly, 
after  making  certain  allowances  for  dis- 
honored  bills,  he  assessed   the  damages 
at   the   sum    above   awarded ;    and    the 
Court  of  King's  Bench  held  the  award 
to  be  right.     In  the  preceding  case,  the 
court  proceeded  on  the  principle  that 
the  entries,  which  had  been  continued 
in  the  creditor's  books  immediately  on 
the  death  of  Ingham,  not  having  been 
communicated  to  the  debtors,  were  not 
conclusive  on   the  creditors,  and  conse- 
quently that   tlie   general    legal    appro- 
priation, of  which   such   entries  would 
otherwise  have  been  evidence,  was  in- 
complete.    It  is  clear  from  this,  as  also 
from  the  express  opinions  of  the  judges, 
that  they  did  not  consider  it  necessary, 
in  order  to  support  any  alleged   appro- 
priation on  the  part  of  the  creditor,  that 
he  should  prove  it  to  have  been  made  at 
the    time  of  payment.      On    the   other 
hand,  if  payment  be  made  to  the  cred- 
itor of  any  sum  in  respect  of  an  account 
current,  the  creditor  making  no  appro- 
priation at  the  time  of  payment,  and  if, 
after    such    payment,    the    debtor   and 
creditor  continue  their  mutual  dealings, 
or  do  any  other  mutual  act  in  respect  of 
the  same  account,  the  creditor  will  be 
barred  by  such  subsequent  transactions 

79 


228*  TERMINATIOX    OF    LIABILITY.  [bOOK   II., 

is  known  as  the  rule  in  Clayton's   Case,  [a]  that  where  there  is 

one  single  open  current  account  between  two  parties,  every  pay- 

*ment  which  cannot  be  shown  to  have  been  made  in  dis-  ^ ,  ^^ 

r  229 
charge  of  some  particular  item,  is  imputed  to  the  earliest  *- 

item  standing  to  the  debit  of  the  payer  at  the  time  of  payment.  If, 
therefore,  a  customer  of  a  firm  of  bankers  has  funds  standing  to  his 
credit  at  the  time  they  dissolve  partnership,  and  his  account  is  con- 
tinued by  their  successors,  they  taking  new  deposits  and  honoring 
his  drafts  as  if  no  change  had  occurred,  and  blending  the  accounts, 
then  the  payments  first  made  by  the  new  firm  will  oe  deemed  to 
have  been  made  in  liquidation  of  the  earliest  item  on  the  credit  side 
of  the  customer's  account,  viz.,  the  balance  due  to  him  at  the  time 
of  the  dissolution,  and  consequently,  if,  proceeding  on  this  prin- 
ciple, that  balance  is  liquidated,  tb.e  customer  has  no  claim  against 
the  old  firm  in  respect  of  his  account  with  them. 

This  doctrine  is  of  great  importance  in  questions  relating  to  the 
discharge  of  retired  and  deceased  partners.  36 

Efect  of  rule  in  the  ease  of  retired  and  deceased  partners. — The 
application  of  the  rule  in  question  will  discharge  from  liability  the 
estates  of  deceased  partners ;  (6)  the  estates  of  sole  traders  if  their 

from  establishing  an  appropriation  of  back  without  specific  appropriation — it 

the  payment."  was  held  that  such  repayment  should 

(a)  1  Mer.  572.     See,  in  addition  to  be  appropriated  in  the  order  of  time  of 

the  cases  cited  in  the  text  as  illustrating  his  embezzlement,  without  reference  to 

the  rule  in  question,  Ex  parte  Kandle-  the    time   of   the   giving  of   the    bond, 

son,  2  Deac.  &  C.534;  Copland  i>.  Tool-  Pardee  v.  Markle,  111  Pa.  St.  548;  S. 

min,  7  CI.  &  F.  349  ;  Brown  v.  Adams,  C ,  56  Am.  Rep.  299. 

4  Ch.  764  ;  Laing  v.  Campbell,  36  Beav.  A  partnership  was  dissolved,  and  one 

3.    And  as  to  the  application  of  the  rule  partner  continued  to  carry  on  the  pre- 

to  trust  moneys  mixed  with  other  moneys,  vious   business,  and   was   to   settle   the 

Ee  Hallett's  Estate,  13  Ch.  D.  696  ;  Pen-  partnership  business ;  such  partner  hav- 

nell  V.  Deffell,  4  De  G.,  M.  &  G.  372.  ing  subsequently  paid  to  a  creditor  of 

36.  Rule  in  Clayton's  Case. — Where  the  firm  the  amount  due  from  himself 

one  partner,  in  order  to  induce  another  separately,  as  well  as  from  the  firm,  it 

not  to  leave  the  firm,  gives  him  a  bond  was  held  that  the  retiring  partner  was 

indemnifying  him  against  acts  and  omis-  discharged  from  the  debt,  though  no  ap- 

sions  of  the  third  partner,  who,  both  be-  propriation   was    made  at  the   time  of 

fore  and  after  the  giving  of  the  bond,  payment.     Baker  v.  Stackpoole,  9  Cow. 

misappropriated  the  funds  of  the  firm,  (N.  Y.)  420. 

part    of   which   he    subsequently   paid  (6)  As  in  Clayton's  Case,  1  Mer.  572. 

380 


CHAP,  ir.,  §  III.]    APPROPRIATION   OF   PAYMENTS.  229* 

businesses  have  been  carried  on  by  others  without  any  break ;  (c) 
and  retired  partners,  whether  known  (cZ)  or  dormant,  (e)  Moreover, 
the  discharge  of  the  deceased  or  retired  partner  being  the  conse- 
quence of  the  payment  of  his  former  creditor,  the  discharge  does 
not  depend  on  the  knowledge  of  the  creditor  of  the  change  which 
has  taken  place  in  the  firm,  {e)  It  is  true  that  if  the  creditor  had 
known  of  the  change  he  might  have  objected  to  continue  to  deal 
with  the  continuing  or  surviving  partners  unless  the  old  and  new 
accounts  were  kept  distinct;  but  this  circumstance  does  not  entitle 
him  to  treat  his  old  debt  as  still  unpaid  when  he  has  in  fact  dealt 
on  the  footing  of  there  being  only  one  continuous  account,  and 
when  on  this  footing  he  has  been  paid  his  old  debt.  (/) 
^  -.  *AppUGatioii  of  rule  to  all  single  running  aoGounts.  Dis- 
-*  charge  of  surety. — Tiie  rule  in  Clayton's  Case  applies  to  all 
accounts  of  the  nature  of  one  entire  debit  and  credit  account,  with- 
out reference  to  any  question  of  partnership,  and  is  available  not 
only  by  a  firm  against  an  okl  creditor,  but  also  against  a  firm 
for  tlie  benefit  of  its  debtors.  For  example,  where  a  person  becomes 
surety  to  a  firm  guaranteeing  a  debt  owing  to  it  by  a  third  party, 
then,  if  the  debt  is  an  item  in  an  account  between  this  third  party 
and  the  firm,  and  is  liquidated  by  general  payments  with  which  he 
is  credited,  the  debt  guaranteed  will  be  extinguished  and  the  surety 
will  be  discharged,  although  upon  the  whole  account  there  may 
always  have  been  a  balance  owing  to  the  firm.  (^)  On  the  other 
hand,  if  the  guaranteed  debt  is  not  extinguished  by  the  rule  in 
question,  the  surety  will  not  be  discharged,  (h)     Moreover,  the  rule 

(c)  Sterndale   r.   Hankinson,    1    Sim.  berton  t).  Oakes,  4  Russ.  154  ;  Toulmin  d. 

393 ;  Smith  v.  Wigley,  3  Moo.  &  S.  174.  Copland,  3  You.  &  C.  Ex.  625,  and  Cop- 

(cZ)  Hooper  v.  Keay,  1  Q.  B.  D.  178.  land  v.  Toulmin,  7  CI.  &  F.  350 ;  Bank 

(e)  Brooke  v.  Enderby,  2  Brod.  &  B.  of  Scotland  v.  Christie,  8  CI.  &  F.  214; 

70 ;  Newniarch  v.  Clay,  14  East  239.  Medewe's  Trust,  26  Beav.  588.      Com- 

(/)  See  the  last  note.     The  creditors  pare  Ex  parte  Whitworth,  2  Mont.,  D. 

in    those   cases   did    not    know    of    the  &D.  164;  City  Discount  Co.  i'.  Maclean, 

changes  in  the  firms  with  which  they  L.  R.,  9  C.  P.  692,  where,  notwithstand- 

dealt.     See,  also,  Merriman   v.  Ward,  1  ing  the  mode  in  which  the  books  were 

Johns.  &  H.  371.  kept,  the  real  intention  was  to  keep  the 

(g)  See  Kinnaird  v.  Webster,  10  Ch.  second  debt  separate  from  the  others. 
D.  139 ;  Bodenham  v.  Purchas,  2  Barn.        (h)  Re  Sherry,  25  Ch.  D.  692 ;  Wil- 

&  A.  39;  Field  v.  Carr,  5  Bing.  11 ;  Pem-  liams  v.  Rawlinson,  3  Bing.  71. 

381 


230^ 


TERMINATION    OF    LIABILITY. 


[book    II., 


applies  even  as  between  persons  who  do  not  know  that  they  are 
being  affected  by  it,  and  who,  if  they  did,  might  take  care  to  exchide 
its  operation.  (/)  37 


(i)  Ante  note  (/) ;  Merriman  v.  Ward, 
1  Johns.  &  H.  371;  Scott  v.  Beale,  6 
Jur.  (N.  S.)  559. 

37.  Application  of  rule  to  all  single 
running  accounts. — Wliere  an  account 
with  tlie  debtor  of  the  firm  is,  with  his 
knowledge  and  consent,  continued  in  the 
surviving  partner's  name,  in  the  absence 
of  any  direction  from  the  debtor,  subse- 
quent payments  may  be  applied  in  satis- 
faction of  the  original  balance  due  to 
the  firm.     Boyd  v.  Webster,  59  N.  H.  89. 

In  Bodenham  v.  Purchas  (2  B.  &  Aid. 
39)  Mr.  Justice  Bayley  said  :  "  I  cannot 
distinguish  this  in  principle  from  Clay- 
ton's Case.  The  decisions  in  the  courts 
of  law  do  not  break  in  upon  the  distinc- 
tion there  taken.  The  principle  estab- 
lished by  those  decisions  is  this :  that 
where  there  are  distinct  accounts  and  a 
general  payment,  and  no  appropriation 
made  at  the  time  of  such  payment  by  the 
debtor,  the  creditor  may  apply  such 
payment  to  which  account  he  pleases. 
But  where  the  accounts  are  treated  as 
one  entire  account  by  all  parties,  that 
rule  does  not  apply.  In  this  case  the 
bond  was  given  in  1801  for  advances 
made  or  to  be  made  in  Havard's  life- 
time ;  at  his  death,  the  balance  due  was 
£4404.  The  surviving  partners  might 
then  have  called  for  payment  of  that 
sum,  or  they  might  have  treated  it  as  an 
insulated  transaction  and  kept  that  as  a 
distinct  and  separate  account.  But  in- 
stead of  that  they  blend  it  with  the  sub- 
sequent transactions ;  for  in  the  first 
account  delivered  after  Havard's  death 
are  included  several  items,  down  to  the 
30th  of  June,  and  the  payments  after 
his  death  reduce  the  balance  at  that  time 
to  £1420.     They  might  even  then  have 


treated  this  balance  as  a  distinct  account, 
and  as  money  due  on  the  bond,  if  they 
had  so  cliosen.  Do  they  do  so  ?  Look 
at  the  next  account ;  the  parties  balance 
tiieir  accounts  every  three  months;  and 
in  the  next  quarterly  account  they  bring 
forward  the  balance  of  £1420,  and  make 
it  an  item  in  one  entire  account  subsist- 
ing between  these  parties.  The  account 
goes  on  from  1810  'till  1813;  and  the 
then  balance  is  treated  as  one  entire 
balance  of  one  entire  account,  as  the  re- 
sult of  all  the  transactions  between  the 
parties  in  the  intermediate  time.  The 
plaintiffs  were  not  bound  to  have  so 
treated  it  at  Havard's  death  ;  but,  having 
done  so,  there  is  not  any  autliority  for 
saying  that  they  are  now  at  liberty  to 
apply  the  several  payments  in  reduction 
of  the  debt  incurred  by  the  subsequent 
advances  to  the  exclusion  of  the  bond 
debt.  It  certainly  seems  most  consistent 
with  reason  that  where  payments  are 
made  upon  one  entire  account,  such  pay- 
ments should  be  considered  as  payments 
in  discharge  of  the  earlier  items.  Clay- 
ton's Case,  where  all  the  authorities 
were  fully  considered  by  the  Master  of 
the  Rolls,  is  directly  against  the  plain- 
tiff's right  to  make  any  such  appropria- 
tion as  he  desires.  That  case  does  not 
break  in  upon  any  of  the  cases  at  law, 
and  ought  to  govern  our  decision  in  the 
present  instance ;  and  I  am,  therefore,  of 
opinion  that  there  ought  to  be  judgment 
for  tlie  defendant." 

In  Pemberton  v.  Oakes  (4  Russ.  154, 
168)  Lord  Lyndhurst  said  :  "  The  third 
question  is  whether  the  balance  due 
from  Stokes  to  the  bank  at  the  time  of 
Harding's  death  has  been  discharged  by 
his  subsequent  payments;  and  that 
9 


CHAP.  II.,  §  III.]    APPROPRIATION   OF    PAYMENTS. 


230^ 


Rule  applies  against  the  debtor  as  well  as  against  the  creditor. — 
Further,  as  a  creditor  has  no  right  to  take  the  account  subsisting 
between  him  and  his  debtor  backwards,  so  as  to  make  himself  ap- 
pear a  creditor  in  respect  of  the  earlier  rather  than  of  the  later 
items  of  the  account,  so,  on  the  other  hand,  a  debtor,  after  making 
general  payments  in  respect  of  one  entire  account,  is  not  at  liberty 


point  is  decided  by  Clayton's  Case,  and 
Bodenham  v.  Purchas.  It  is  true  tnat 
the  facts  here  are  not,  in  everj^  respect, 
precisely  the  same  with  the  circum- 
stances of  these  two  cases.  But  the  de- 
cisions in  them  proceeded  on  a  broad 
general  principle,  equally  applicable  to 
the  state  of  circumstances  existing  here. 
Where  divers  debts  are  due  from  a  per- 
son, and  he  pays  money  to  his  creditor, 
the  debtor  may,  if  he  pleases,  appropri- 
ate the  payment  to  the  discharge  of  any 
one  or  other  of  those  debts  ;  if  he  does 
not  appropriate  it,  the  creditor  may 
make  an  appropriation  ;  but  if  there  is 
no  appropriation  by  either  party,  and 
there  is  a  current  account  between  them, 
as  between  banker  and  customer,  the 
law  makes  an  appropriation,  according 
to  the  order  of  the  items  of  the  account, 
the  first  item  on  the  debit  side  of  the 
account  being  the  item  discharged  or  re- 
duced by  the  first  item  on  the  credit 
side.  Here  it  is  not  pretended  that  any 
distinct  appropriation  of  the  payments 
was  made  by  the  parties.  It  was  the 
practice  of  the  bank  to  settle  their 
accounts  with  Stokes  quarterly,  trans- 
ferring, at  the  end  of  each  quarter,  the 
balance  then  due  from  him  to  the 
account  of  the  next  quarter.  Harding 
died  in  the  middle  of  a  quarter,  but  on 
that  occasion  no  change  took  place  in 
the  mode  of  settling  the  accounts.  At 
the  end  of  the  then  current  quarter,  the 
balance  was  struck  exactly  as  if  Harding 
had  been  alive,  and  no  notice  was  taken 
of  his  death.     There  being  no  distinct 


appropriation  of  tlie  payments,  either 
by  the  one  party  or  the  other,  the  law 
makes  the  appropriation  with  reference 
to  the  order  of  the, items  of  the  account. 
If  so,  the  debt  which  Stokes  owed  to 
the  bank  at  the  time  of  Harding's  death 
has  been  discharged  by  the  subsequent 
payments.  In  Bodenham  v.  Purchas,  a 
court  of  law  confirmed  the  rule  which 
Sir  William  Grant  had  laid  down  in  a 
court  of  equity.  The  point  was  again 
brought  into  discussion  in  Simson  v. 
Ingham  (2  Barn.  &  C.  65),  and  the  prin- 
ciple was  again  confirmed,  though  the 
particular  circumstances  of  the  transac- 
tion produced  a  diflferent  decision.  In 
that  case,  two  accounts  were  formed  by  a 
London  bank  at  the  death  of  one  of  the 
partners  in  a  country  bank  which  dealt 
with  them — the  one  was  styled  the  old 
account,  tlie  other  the  new  ;  and  in  the 
latter  the  London  bank  entered  all  the 
payments  made  to  them  by  the  country 
bank  after  the  death  of  that  partner — so 
that  a  distinct  appropriation  was  made. 
The  same  question  arose  in  Brooke  v. 
Enderby,  before  the  Common  Pleas,  and 
there,  too,  the  principle  of  Clayton's 
Case  was  adopted.  Feeling  myself 
bound  by  the  force  and  authority  of 
these  decisions,  and  acquiescing  com- 
pletely in  the  reasoning  of  Sir  William 
Grant,  I  must  decide  that  there  was  no 
debt  due  to  Oakes  and  Willington  under 
the  indenture  of  the  4th  of  January, 
1802,  at  the  time  when  the  memorandum 
was  endorsed  on  the  bond." 


383 


230*  TERMINATION    OF    LIABILITY.  [bOOK    II., 

to  have  those  payments  applied   in  liquidation  of  the  subsequent 
rather  than  of  the  earlier  items,  (k) 

JEffect  on  incoming  partner. — This  has  an  important  bearing  on 
the  position  of  incoming  partners,  for  although  they  are  not  liable 
for  debts  contracted  before  they  joined  the  firm,  still  if  such  debts 
and  others  subsequently  contracted  are  allowed  by  an  incoming 
partner  to  *form  one  single  running  account  and  payments 
are  made  generally  in  respect  of  it,  those  payments,  ■- 
although  made  with  the  money  of  the  new  firm,  will  be  applied  to 
the  old  debt,  and  a  balance  will  be  left  for  which  the  incoming  part- 
ner will  be  liable.  {1}  But  the  rule  in  Clayton's  Case  cannot  be 
insisted  on  to  the  prejudice  of  a  new  partner  without  his  consent, 
express  or  tacit.  Without  such  consent  a  creditor  of  the  old  firm 
who  goes  on  dealing  with  the  new  firm  has  no  right  to  appropriate 
a  payment  made  by  a  new  partner  to  a  debt  owing  by  his  copart- 
ners, nor  to  run  two  distinct  accounts  together,  and  treat  a  general 
payment  as  made  in  respect  of  the  earliest  items.  Burland  v. 
Nash  (m)  may  be  referred  to  as  an  illustration  of  this.  In  that  case 
A  succeeded  B  in  business,  and  agreed  with  him  to  take  his  debts 
upon  himself;  A  then  contracted  debts  of  his  own  to  one  of  B's 
creditors,  and  A  afterwards  made  such  creditor  a  general  payment 
on  account ;  it  was  held  that  the  creditor  could  not,  without  A's 
consent,  apply  this  payment  in  discharge  of  the  debt  owing  by  his 
predecessor,  B.38 

(k)  Beale  v.  Caddick,  2  Hurlst.  &  N.  ence  that  the  two  accounts  had  been  run 

329.  into   one   with   the   consent  of  the  de- 

(/)  See  the  last  case,  and  also  Scott  v.  fendant. 
Beale,  6  Jur.  (N.  S.)  559.  This  case  is  38.  Effect  of  rule  on  incoming  part- 
badly  reported,  but  it  is  tolerably  plain  ner. — A  new  member  joined  a  firm 
that  the  incoming  partner  was  held  lia-  which  owed  money  on  a  running  ac- 
ble  to  pay,  not  the  debt  due  to  the  plain-  count,  which  account  was  continued  after 
tiff  when  the  partnership  commenced,  he  joined  the  firm,  and  payments  made 
but  the  balance  of  moneys  due  to  him  from  time  to  time.  Held,  that  these 
on  his  whole  account,  and  which  bal-  payments  could  not  be  applied  upon 
ance  consisted  of  moneys  received  by  that  portion  of  the  account  which  wa* 
the  defendants  after  the  partnership  be-  due  when  the  new  partner  became  a 
tween  them  was  created.  member  of  the  firm.     St.  Louis  Type 

(m)  2  Fost.  &  F.  687.    Quiere,  whether  Foundry  Co.  v.  Wisdom,  4  Lea  (Tenn.) 

the  evidence  did  not  warrant  the  infer-  695. 

384 


CHAP.  II.,  §  III.]    APPROPRIATION    OP    PAYMENTS.  231* 

Rule  incipplicahle  where  there  are  distinct  accounts.     Right  of  ap- 
propriation in  such  a  case. — The  rule  in  Clayton's  Case,  however, 
applies  only  to  an  entire  unbroken  account,  and  has  no  application 
to  cases  where  one  person  is  indebted  to  another  in  respect  of  sev- 
eral matters,  each  of  which  forms  the  subject  of  a  distinct  account. 
In  such  a  case,  if  the  debtor  does  not  appropriate  the  payment  when 
he  makes  it,  the  creditor  is  at  liberty  to  apply  the  payment  to 
whichever  account  he  thinks  proper,  (n)     Moreover,  when  a  change 
takes  place  in  a  iirm  by  the  retirement  or  death  of  a  member,  a 
creditor  of  the  firm  is  under  no  obligation  to  assent  to  a  carrying 
over  of  his  debt  so  that  it  shall  form  the  first  item  in  a  fresh  ac- 
count with  the  new  firm.     He  is  at  liberty  to  keep  the  accounts 
with  the  two  firms  distinct,  and  if  he  does  so,  payments  made  gen- 
erally bv  the  new  firm  will  not  necessarily  *go,  by  virtue 
"^  J  of  the  rule  in  Clayton's  Case,  in  liquidation  of  the  debt 
owing  by  the  old  firm.     A  remarkable  illustration  of  this  is  afforded 
by  the  well-known  case  of  Simson  v.   Ingham,  (o)     There,   two 
country  bankers,  Benjamin  and  Joshua  Ingham,  gave  a  bond  to  a 
London  bank  as  a  security  for  advances  which  it  might  make  on 
account  of  the  persons  constituting  the  country  bank,  or  either  of 
them,  associated  or  not  with  any  other  persons.     Benjamin  died, 
and  at  his  death  a  considerable  sum  was  due  to  the  London  bank 
for  advances  made  to  the  country  bank.     The  London  bank  was  in 
the  habit  of  sending  in  monthly  accounts  to  the  country  bank.     In 
the  month  following  Benjamin's  death  the  London  bank  received 
and  paid  considerable  sums  on  account  of  the  country  bank,  and 
the  sums  were  entered  by  the  London  bank  in  its  own  books  in  con- 
tinuation of  the  former  account  between  it  and  the  old  country 
bank.     No  account,  however,  was  sent  to  the  country  bank  until 
two  months  after  Benjamin's  death,  and  then  two  accounts  were 
sent,  one  of  them  being  an  account  of  receipts  and  payments  prior 
to  his  death,  and  the  other  being  an  account  of  receipts  and  pay- 
ments made  subsequently  thereto.     A  considerable  balance  was  due 
to  the  London  bank  on  the  first  of  these  accounts,  and  to  recover 
this  balance  an  action  was  brought  against  Benjamin's  representa- 
tives.    It  was  contended  that  his  estate  was  discharged  by  virtue  of 

(n)  Ante  p.  *227.  (o)  2  Barn.  &  C.  65. 

385  25 


232*  TERMINATION    OF    LIABILITY,  [bOOK    II., 

the  rule  in  Clayton's  Case,  the  London  bank  having  received,  since 
his  death,  much  more  than  sufficient  to  liquidate  that  balance;  but 
it  was  held  that  the  rule  in  question  did  not  apply.  The  judgment 
of  Mr.  Justice  Bayley  contains  such  an  admirable  statement  of  the 
principles  applicable  to  such  cases  that  no  hesitation  has  been  felt  in 
setting  it  out  at  length. 

"  The  general  rule  is  that  the  party  who  pays  money  has  a  right  to  apply  that 
payment  as  he  thinks  fit.  If  there  are  several  debts  due  from  him,  he  has  a  right 
to  say  to  which  of  those  debts  the  payment  shall  be  applied.  If  he  does  not 
make  a  specific  application  at  the  time  of  payment,  then  the  right  of  application 
generally  devolves  on  the  party  who  receives  the  money.  But  tliere  is  a  third 
rul-e,  viz.,  that  where  one  of  several  partners  dies,  and  the  partnership  is  in  debt, 
and  the  surviving  partners  continue  their  dealings  with  a  particular  creditor,  and 
the  latter  joins  tiie  transactions  of  the  old  *and  new  firms  in  one  entire  r*233 
account,  then  the  payments  made  from  time  to  time  by  the  surviving  part- 
ners must  be  applied  to  the  old  debt.  In  that  case,  it  is  to  be  presumed  that  all 
the  parties  have  consented  that  it  should  be  considered  as  one  entire  account,  and 
that  the  death  of  one  of  the  partners  has  produced  no  alteration  whatever.  In 
this  case,  the  partner  died  in  September,  1814.  If  in  the  ordinary  course  of  busi- 
ness, a  monthly  account  had  been  sent  in,  stating  the  transactions  before  and  after 
the  death  of  the  partner,  as  forming  part  of  one  entire  account,  and  the  balance 
is  due  from  the  survivors,  in  that  case  the  creditor  would  have  been  precluded, 
and  would  have  had  no  right  to  have  said  that  the  payments  made  subsequently 
to  the  death  of  the  partner  should  be  applied  to  any  but  the  old  account.  In 
fact,  the  bankers  in  London  did  not  send  in  any  account  after  the  death  of  the 
partner  until  November,  and  then  they  sent  in  two  distinct  accounts— one  made 
up  to  the  day  of  the  death  of  the  partner,  and  the  other  commencing  from  that 
period.  At  that  time,  therefore,  the  bankers  in  London  expressed  their  dissent 
from  making  the  whole  one  entire  account.  It  has  been  insisted  that  at  that 
period  of  time  they  had  no  right  so  to  do,  because  they  were  precluded  by  the 
entries  which  they  had  already  made  in  their  own  books  in  the  intermediate 
space  of  time.  If,  indeed,  a  book  had  been  kept  for  the  common  use  of  both 
parties  as  a  pass-book,  and  that  had  been  communicated  to  the  opposite  party, 
then  the  party  making  such  entries  would  have  been  precluded  from  altering 
that  account;  but  entries  made  by  a  man  in  books  which  he  kept  for  his  own 
private  purposes  are  not  conclusive  on  him  until  he  has  made  a  communication 
on  the  sabject  of  those  entries  to  the  opposite  party.  Until  that  time,  he  con- 
tinues to  have  the  option  of  applying  the  several  payments  as  he  thinks  fit.  For 
these  reasons,  I  am  of  opinion  that  the  plaintifis  were  not  precluded  from  apply- 
ing the  payments  to  the  new  account,  and  therefore  this  award  is  right." 

Right  to  blend  accounts. — The  case  of  Simson  v.  Ingham  was 
decided  upon  the  principle  that  a  creditor  of  a  firm  has  a  right, 

386 


CHAP.  II.,  §  III.]    APPROPRIATION   OF   PAYMENTS.  233* 

when  a  change  occurs  in  the  firm,  to  decide  for  himself  whether  the 
sum  due  to  him  from  the  old  firm  shall  or  shall  not  form  an  item  in 
his  account  with  the  new  firm.  This  principle  is  further  illustrated 
by  the  case  of  Jones  v.  Maund.  {p)  There,  three  persons,  A,  B  and 
C,  were  partners,  and  D  was  indebted  to  them  in  a  sum  secured  by 
a  covenant  and  a  mortgage.  A  and  B  died,  C  retired  and  assigned 
her  interest  to  E,  who,  with  F,  continued  the  business  of  the  old 
firm  under  the  old  name.  D  continued  to  deal  with  the  new  firm, 
and  he  made  it  several  payments,  more  than  sufficient  to  liquidate 
the  debt  above  mentioned  if  appropriated  thereto.  The  mortgage 
had  been  realized  and  the  sum  arising  from  it  had  been  applied  in 
part  discharge  of  *the  debt  secured  by  it.  There  was  noth- 
^  intr  to  show  that  D's  debt  had  been  made  an  item  in  the 
account  between  him  and  the  new  firm,  and  it  was  conliequently 
held  that  D  had  no  right  to  insist  that  the  payments  made  by  him 
generally  to  the  new  firm  should  be  applied  to  the  balance  due  from 
him  on  his  covenant,  (g) 

Transfer  of  debt  from  one  account  to  another. — It  should  be  borne 
in  mind  with  reference  to  cases  of  this  description,  that  one  partner 
can  bind  the  firm  by  assenting  to  a  transfer  of  a  debt  due  to  or  by 
it  from  one  account  to  another,  (s)  39 

Eide  in  Clayton's  Case  inapplicable  lohere  it  defeats  the  intentions 
of  the  parties. — The  rule  in  Clayton's  Case,  viz.,  that  in  current 
accounts  it  is  presumably  the  sum  first  paid  in  that  is  first  drawn 
out,  or,  in  other  words,  that  presumably  it  is  the  first  item  on  the 
■debit  side  of  the  account  which  is  discharged  or  reduced  by  the  first 
item  on  the  credit  side,  is  a  rule  based  on  the  presumed  intention  of 

(p)  3  You.  &  C.  Ex.  347.  with  the  debt  as  it  liked?     See  Pember- 

{q)  The  case  was  decided  on  demurrer,    ton  v.  Oakes,  4  Russ.  154. 
and  according  to  the  report  it  was  held        {s)  Ante    pp.   *230,   *231 ;    Beale   v. 
that  the  balance  due  on  the  covenant    Caddick,  2  Hurlst.  &N.  326. 
could    not  be  considered  as  liquidated,        39.  Transfer  of  debt  from  one  ac- 
unless  it  could  be  shown  that  it  had,    count  to  another.— Taking  an  account 
with  C's  assent,  been  made  an  item  in  the    of  stock,   and  transferring  the  amount 
account    between  D  and  the  new  firm,    due  to  one  partner  to  another  firm  of 
But  qucBi-e  what  C    had  to  do  with  it,    which  he  is  a  member,  does  not  of  itself 
she  having  assigned  all   her  interest  in    dissolve  the  partnership.     Russell  z>.  Le- 
the debt  to  the  new  firm  ?     Did  she  not    land,  12  Allen  (Mass.)  349. 
therebv  authorize  the  new  firm  to  deal 

387 


234*  TERMINATION    OF    LIABILITY.  [bOOK    II., 

the  parties,  (t)  It  is  not,  as  is  sometimes  represented,  a  rule  of 
law  obtaining  independently  of  their  will,  and  consequently,  if  it 
can  be  shown  that  some  other  appropriation  was  intended,  the  rule 
ceases  to  be  applicable.  An  intention  to  appropriate  a  payment  to 
a  later  rather  tiian  to  an  earlier  item  in  the  account  may  be  inferred 
from  the  usual  course  of  business  between  the  parties ;  {u)  from  the 
source  from  wliicih  the  money  was  obtained ;  (x)  from  the  security 
to  meet  which  the  payment  was  made ;  (y)  from  the  fact  that  the 
earlier  item  was  secured  and  intended  to  be  kept  separate  from  the 
*others;(2;)  from  the  fact  that  the  payment  was  a  dividend 
on  all  debts ;  (a)  from  the  representations  of  the  parties  ;  (6)  '-  "" 
and  from  other  circumstances,  (c) 

An  instructive  case  on  this  head  is  Wickham  v.  Wickham,  (d) 
which,  in  substance,  was  as  follows :  a  firm  of  Finch  &  Sons,  as 
agents  of  the  plaii-itiifs,  supplied  goods  to  the  firm  of  Smith  & 
AVilley  upon  the  terms  that  the  latter  should  become  debtors  to  the 
plaintiff  in  respect  of  such  goods.  Finch  &  Sons  also  supplied 
Smith  &  Willey  with  other  goods  on  their  own  behalf.  In  the 
accounts  between  Finch  &  Sons  and  Smith  &  Willey  no  distinction 
was  made  between  goods  supplied  by  Finch  &  Sons  on  their  own 
behalf  and  those  which  they  supplied  as  agents  of  the  plaintiffs. 
Smith  &  Willey  made  payments  generally  on  account,  and  applying 
the  rule  in  Clayton's  Case,  nothing  was  due  from  Smith  &  Willey 
in  respect  of  the  goods  supplied  to  them  on  behalf  of  the  plaintiffs. 
However,  Edward  Finch  was  a  partner  in  both  firms,  and  repre- 
sentations were  made  to  the  plaintiffs  by  the  firm  of  Finch  &  Sons 
to  the  effect  that  a  large  debt  was  due  to  the  plaintiffs  from  the  firm 
of  Smith  &  Willey,  and  Finch  &  Sons  undertook  that  Edward 

(t)  Ke  Hallett's  Estate,  13  Cli.  D.  696  ;        (y)  Newmarch  i'.  Clay,  14  East  240. 
Wilson  V.  Hurst,  4  Ba<-n.  A  Ad.  767,  per        (z)  City  Discount  Co.  v.  Maclean,  L. 

Lord  Denman.     In  Copland  v.  Toulmin,  R.,  9  C.  P.  692.     See  ante  p.  *230. 
7  CI.  &  F.  349,  there  was  evidence  to        (aj  Ante  p.  *228. 
show  an  agreement  for  a  different  appro-        (6)   Wickham  v.  Wickham,  2  Kay  & 

priation,  but  it  was  not  deemed  sufficient  J.  478 ;  IVIerriman  v.  Ward,  1  Johns.  & 

to  exclude  the  rule.  H.  371. 

(u)  Taylor  v.  Kymer,  3  Barn.  &  Ad.        (c)  See  Henniker  v.  A\lgg,  4  Q.  B. 

320  ;  Lysaght  v.  Walker,  5  Bli.  (N.  S.)  1.  792.     Compare  Re  Boys,  10  Eq.  467. 

(x)    Stoveld    V.   Eade,   4   Bing.   154;        {d}  2  Kay  &  .J.  478.     See,  too,  Merri- 

Thompson  v.  Brown,  Moo.  \-  M.  40.  man  v.  Ward,  1  Johns.  &  H.  371. 

388 


€HAP.  ir.,  §  III.]    APPROPRIATIOX    OF   PAYMENTS.  235* 

Finch  should  use  his  influence  as  a  partner  in  the  firm  of  Smith  & 
"Willey  to  secure  the  reduction  of  such  debt.  Upon  the  faith  of 
this  representation  and  undertaking,  the  plaintiffs  forebore  to  sue 
Smith  &  Willey.  It  was  held  that  the  firm  of  Smith  &  Willey 
was  precluded  from  treating  its  debt  to  the  plaintiffs  as  liquidated 
by  the  payments  made  by  it  to  the  firm  of  Finch  &  Sons ;  for  it 
was  not  competent  to  the  two  firms  so  to  arrange  their  accounts  as 
to  liquidate  a  debt  wbich  a  person  who  was  a  partner  in  both  firms 
represented  to  the  plaintiffs  as  still  owing  to  them. 

Application  of  the  rule  in  cases  of  fraud. ^-Upon  the  same  prin- 
■ciple,  viz.,  that  the  rule  in  Clayton's  Case  is  founded  on  the  pre- 
sumed intention  of  the  parties,  it  follows  that  it  cannot  be  applied 
*9-^fi1  ^^  against  a  person  who  is  a  *creditor  in  respect  of  a  fraud 
-'  committed  on  him  and  of  which  he  is  igi>orant.  This,  in 
fact,  was  determined  in  Clayton's  Case  itself.  For  Clayton,  in  ad- 
dition to  the  claim  which  was  held  to  have  been  discharged  by  the 
operation  of  the  rule  noticed  above,  (e)  had  another  claim  upon 
Devaynes'  estate  arising  out  of  a  breach  of  trust  committed  by  a 
fraudulent  sale  of  some  exchequer  bills,  and  of  which  sale  he  was 
kept  in  ignorance.  The  payments  made  to  Clayton  since  Devaynes' 
death  were  more  than  sufficient  to  satisfy  both  claims ;  but  it  was 
held  that  the  claim  arising  out  of  the  concealed  sale  of  the  bills  was 
not  affected  by  those  payments.  (/)  So,  if  one  partner  fraudulently 
overdraws  his  account  with  the  firm,  and  keeps  paying  money  in 
and  drawing  money  out,  so  that  his  fraudulent  overdrawing  is  never 
discovered,  it  will  not  be  treated  as  having  been  made  good  so  long 
as  there  is  a  balance  against  him.  [g] 

Imputation  of  payment  where  debts  are  owing  to  a  firm  and  to  a 
member  of  it. — Before  leaving  the  subject  of  appropriation  of  pay- 
ments, it  may  be  as  well  to  advert  to  a  question  of  some  difficulty 
which  arises  when  a  person  indebted  to  a  firm,  and  also  to  an  indi- 
vidual member  of  it,  pays  him  a  sum  of  money  under  such  circum- 
stances that  it  cannot  be  ascertained  on  account  of  which  debt  the 
payment  was  made.  In  such  a  case  ought  the  payment  to  be  ap- 
plied in  liquidation  of  the  debt  due  to  the  partnership  or  that  due 

(e)  Ante  p.  *228.  {g)  Lacey  v.  Hill,  4  Ch.  D.  537. 

(/)  See  Clayton's  Case,  1  Mer.  572, 580. 

389 


236*  TERMINATION    OF    IJAHIUTY.  [bOOK    II., 

to  the  iiulividnal  member?  Potlnei'(/i)  .says  that  good  faith  requires 
that  the  partner  receiving  the  money  .shcnild  apply  it  proportionally 
to  both  demands.  The  writer  is  not  aware  of  any  decision  on  this 
subject,  but  he  apprehends  that  as  between  the  partner  and  the 
debtor,  the  payment  might  be  applied  to  either  debt  at  the  option 
of  the  partner,  whilst,  as  between  the  partner  and  his  copartners, 
good  faith  would  require  that  the  payment  should  be  applied  wholly 
to  the  partnership  debt,  (i) 

*2.  Release. 

[*237 

Release  of  one  partner  is  a  release  of  the  firm.  Covenant  not  to 
sue  has  a  different  effect. — A  release  of  one  partner  from  a  partnership 
debt  discharges  all  the  others ;  (k)  for  where  several  persons  are  bound 
jointly  or  jointly  and  severally,  a  release  of  one  is  a  release  of  them 
all.  (I)  But  in  this  respect  a  covenant  not  to  sue  differs  from  a 
release ;  for  although  where  there  is  only  one  debtor  and  one  credi- 
tor, a  covenant  by  the  latter  never  to  sue  the  former  is  equivalent  to 
a  release,  it  has  been  decided  on  several  occasions  that  a  covenant 
not  to  sue  does  not  operate  as  a  release  of  a  debt  owing  to  or  by 
other  persons  besides  those  who  are  parties  to  the  covenant,  (m)  40 

(A)  Pothier,  "iSoci^t^,"  ^  121.  lease  of  the  firm. — A  sealed  release  of 

(i)  See  Thompson  v.  Brown,  Moo.  &  one  partner   discharges  his    copartners 

M.  40,  and  Nottidge  v.  Prichard,  2  CI.  &  also.      Gray   v.   Brown,    22    Ala.    262 ; 

F.  379.  Williugs  V.  Consequa,  Pet.  (U.  S.)  C.  C. 

(k)  Bower  v.  Swadlin,  1  Atk.  294 ;  Ex  307 ;  United  States  v.  Thompson,  Gilp. 

parte  Slater,  6  Ves.  146;    Cheetham  v.  (U.S.)  614;  Williamson  v.  McGinnis, 

Ward,  1  Bos.  &  P.  630  ;  Cocks  i;.  Nash,  11   B.    Mon.    (Ky.)   74;    Tudarman   v. 

9  Bing.  341.  Newball,     17     Mass.     581 ;     American 

(/)  See  the  last  note,  and  as  to  joint  Bank  v.  Doolittle,  14  Pick.  (Mass.)  126; 

and  several  obligations,  Co.  Lit.  233,  a ;  Brown  v.  Marsh,  7  Vt.  327  ;  Benson  v. 

Lacy  V.   Kinaston,    1   Ld.  Eaym.   690 ;  Kincaid,  3  Pa.  St.  57.     But  not  where 

Kiffin  V.  Evans,  4  Mod.  379.  the     instrument     otherwise     provides. 

(»i)  Clayton  v.  Kynaston,  2  Salk.  573 ;  Williams  v.  Hitchings,  10  Lea  (Tenn.) 

Lacy  V.  Kynaston,   1   Ld.  Raym.    688,  326. 

and  2  Salk.  575  ;  Hutton  v.  Eyre,  6  A  parol  agreement  to  release  one  part- 
Taunt.  289 ;  Dean  v.  Newhall,  8  T.  K.  ner  does  not  operate  to  discharge  a  debt 
168  ;  Walmesley  v.  Cooper,  11  Ad.  &  E.  as  against  the  other.  To  have  that  effect 
216  ;  and  see  Price  v.  Barker,  4  El.  &  B.  it  must  be  under  seal.  Evans  v.  Carey, 
760.  29  Ala.  99;  Shotwell  v.  Miller,  1  N.  J. 

40.  Release  of  one  partner  is  a  re-  L.  181 ;   Walker  v.   McCulloch,  4  Me. 

390 


CHAP.  II.,  §  III.] 


RELEASE. 


237* 


Releases  inform  held  to  he  covenants  not  to  sue. — If  a  release  is  so 
drawn  as  to  show  that  it  was  intended  to  enure  only  for  the  benefit 
of  the  releasee  personally,  and  not  to  avail  even  him  in  an  action 
by  the  releasor  against  the  releasee  jointly  with  other  people,  then 
persons  jointly  liable  with  hiiu  in  respect  of  the  debt  released  will 
not  be  discharged  therefrom.  In  such  a  case  the  deed  will  itself 
show  that  it  was  not  in  fact  intended  to  operate  as  a  release. 

In  Solly  V.  Forbes  (n)  the  defendants,  Forbes  and  Ellerman,  were 
partners,  and  were  indebted  to  the  plaintiffs,  and  had  stopped  payment. 
In  consideration  of  a  sum  paid  by  Ellerman,  the  plaintiffs  released 
him  from  all  further  demands,  but  it  was  declared  in  the  release  (to 
which,  however,  Forbes  was  not  a  party)  that  nothing  therein  con- 
tained should  affect  the  plaintiffs'  rights  against  Forbes,  either  sep- 


421;  Shaw  v.  Pratt,  22  Pick.  (Mass.) 
305 ;  Harrison  v.  Clare,  2  Johns.  (N.  Y.) 
449;  Kowley  v.  Stoddard,  7  Id.  207: 
Catskill  Bank  v.  Messenger,  9  Cow.  (N. 
Y.)  37;  De  Zeng  v.  Bailey,  9  Wend. 
(N.  Y.)  336;  Lunt  v.  Stevens,  24  Me. 
534. 


portion  of  a  copartnership  debt,  is  a  good 
consideration  for  an  agreement  on  the 
part  of  the  creditor  to  release  and  dis- 
charge the  maker  from  liability  for  the 
debt.  Ludington  v.  Bell,  77  N.  Y.  138  ; 
reversing  43  Super,  Ct.  557. 

A  creditor  who  has  accepted  his  pro- 


A  partner  cannot  avail  himself  of  a  portion  of  an  assignment  made  by  a  firm, 

promise  by  a  creditor  of  his  firm  to  re-  and  given  the  firm  a  release,  has  no  right 

lease  him  from  liability,  if  he  has  paid  of  action  against  a  former  partner  of  the 

the  creditor  nothing  and  has  not  parted  firm  who  retired  before  the  assignment 

with   any  security,  or  acted    upon    the  was  made,  and  received  from  the  firm  a 

faith  of  the  promise.     Fagg  v.  Hambel,  bond   of    indemnity    against    all    debts. 

21  Iowa  140.  Bank    of    Wilmington    v.    Almond,    1 

In  Missouri,  the  statute  (Rev.  Stat.,  §  Whart.  (Pa.)  169. 

666)  providing  that  two  or  more  joint  or  Where  a  judgment   is   recovered  in 

several  debtors  may  be  released  without  Pennsylvania  against  one  partner  only, 

discharging    the    others,  applies  to  co-  on  a  firm  debt  contracted  in  that  state, 

partners.     Grant  v.  Holmes,  75  Mo.  109.  and  a  release  is  executed  to  the  other 

The   release  of   a   judgment   against  partner  in   another  state,  the  effect  of 

one  of   two   joint  and   several  debtors,  such  release  upon  the  judgment  is  to  be 

obtained  without  service  of  process  upon  ascertained  by  reference  to  the  law  of 

the  other,  necessarily  releases  that  other,  Pennsylvania.     Greenwald  v.  Kaster,  85 


although  the  converse  of  the  rule  would 
not  be  true.  Coonley  v.  Wood,  36  Hun 
(N.  Y.)  559. 

The  giving  of  his  individual  promis- 


Pa.  St.  45. 

(w)  2  Brod.  &  B.  38.  See,  too,  Price 
V.  Barker,  4  El.  &  B.  760  ;  Thompson  v. 
Lack,  3  C.  B..540;  Willis  v.  De  Castro, 


sory  note,  by  one  of  the  members  of  a    4  C.  B.  (N.  S.)  216 ;  Bateson  v.  Gosling, 
copartnership,  after  its  dissolution,  for  a    L.  R.,  7  C.  P.  9. 

391 


237^ 


TERMIXATIOX    OF    LIABILITY. 


[bO(^K    II., 


aratcl.y  or  as  ])artiier  with  Ellerman,  or  against  the  joint  estate  of 
tlie  two,  and  timt  it  should  be  lawful  for  the  plaintiffs  to  sue  Eller- 
man, either  jointly  wi-th  Forbes  or  separately,  for  the  purpose  of 
^  obtain*ing  satisfaction  of  their  debt,  either  out  of  the  joint 

-*  estate  of  the  two  or  from  Forbes.  In  an  action  brought 
by  the  j)laintiffs  against  Forbes  and  Ellerman  to  recover  the  debt 
owing  by  them,  it  was  held  that  this  deed  was  no  bar  to  the  action. 
Again,  in  Hartley  v.  Manton,(o)  where  a  bill  was  drawn  by  a 
firm  on  and  was  accepted  by  one  partner,  it  was  held  that  a  release 
of  the  drawers  did  not  discharge  the  acceptor,  the  object  of  the 
release  being  to  discharge  the  joint  liability  of  the  firm,  but  not 
to  affect  the  several  liability  of  the  accepting  partner.4l 


(o)  5  Q.  B.  247.  creditor  in  trust   to  pay  certain   other 

41.  What  releases  are.  merely  cove-  creditors.     He  afterwards    assigned  all 

nants  not  to  sue. — Where  a  creditor  his   property   to   the   endorsee   for   the 

releases  a  surviving  partner  from  liabil-  benefit  of  all  his  creditors,  with  a  stip- 

ity  on  a  bond  and  mortgage  given   by  ulation  for  a  release  from    them.     The 

the  firm,  the  estate  of  the  deceased  part-  assignee,  in   his    private  capacity,  exe- 

ner  is  also  released    from  liability  on  cuted  such  release  to  the  debtor.     Held, 

the  bond,  whatever  the  intention  of  the  that  tiiis  did  not  release  his  claim  upon 

creditor  may  have  been.     But  as  to  the  the  other  members  of  the  partnership, 

mortgage,  such  estate  is  not  released,  as  as  endorsee  of  tiie  bill.     Hazelhurst  v. 

the  release  is  in  the  nature  of  a  cove-  Pope,  2  Stew.  &  P.  (Ala.)  259. 
nant  not  to  sue  the  surviving  partner.        Where   a   partnership  closed    up   its 

Murray  v.  Fox,  39  Hun  (N.  Y.)  108.  business,  and  all  the  goods,  effects  and 

The  fact  that  the  consideration  paid  credits  were  left  with  P.,  one  of  the 
by  one  of  several  partners,  upon  a  com-  partners,  for  the  purpose  of  paying  off 
promise  made  by  him,  for  his  release  the  debts,  and  this  partner  entered  into 
from  a  debt  owing  by  the  firm  under  the  an  agreement  with  some  of  the  credi- 
New  York  act  of  1838,  authorizing  an  tors  that  they  should  take  P.'s  notes,  en- 
individual  member  of  a  partnership  to  dorsed  by  E,.,  who  was  not  a  member  of 
compromise  his  individual  liability  in  the  firm,  for  forty  cents  on  the  dollar 
case  of  a  dissolution,  was  taken  out  of  of  their  indebtedness,  and  the  creditors 
the  copartnership  funds  which  he  had  thereupon  released  to  P.  all  right  to  re- 
in his  hands,  will  not  make  such  release  sort  to  any  of  the  goods  and  effects,  and 
enure  to  the  benefit  of  the  other  mem-  the  goods  were  mortgaged  to  R.  to  se- 
bers  of  the  firm,  or  deprive  the  creditor  cure  his  endorsement,  and  a  covenant 
of  the  protection  of  the  statute.  Stitt  was  entered  into  by  the  creditors  not 
V.  Cass,  4  Barb.  (X.  Y.)  92.  to  sue  P.  for  twenty  years,  and  P.  and 

Illustrations. — The  pa^eeof  a  bill  of  R.  afterwards  disposed  of  the  goods — 

exchange,  drawn  by  a  firm  of  which  he  it  was  held  that  tlie  other  partners  were 

was  a  member,  endorsed  the  same  to  hi-s  liable  to  the  creditors  to  tlie  amount  of 

392 


CHAP.  II.,  §  III.]  RELEASE.  238* 

Recitals  of  releases. — In  construing  releases,  particular  attention 
must  be  paid  to  the  recitals ;  for,  however  general  the  operative 
words  of  the  deeds  may  be,  they  will  be  confined  so  as  not  to 
effect  more  than  the  parties  appear,  from  the  deed  itself,  to  have 
contemplated,  (j)) 

Removing  seal. — If  several  persons  are  bound  by  a  bond  jointly, 
or  jointly  and  severally,  and  their  creditor  removes  the  seal  of  one 
of  them  from  the  bond,  all  the  others  are  discharged ;  but  if  the 
obligors  are  only  bound  severally,  then  the  removal  of  the  seal  of 
one  of  them  does  not  affect  the  liability  of  the  others,  (q) 

Arrest. — Before  arrest  for  debt  was  abolished  (as  it  now  is 
except  in  a  few  special  cases),  an  arrest  of  a  debtor,  followed  by 
a  discharge  of  him  by  the  arresting  creditor,  was  equivalent  to  a 
release  by  the  creditor  of  his  debt ;  whence  it  followed  that  if  a 
creditor  of  a  firm  obtained  judgment  against  it  and  arrested  the 
partners  and  then  let  one  of  them  go,  the  others  were  entitled  to 
be  discharged  from  custody.  (?•) 

Composition  in  bankruptcy. — If  a  creditor  accepts  a  composition 
in  bankruptcy  in  respect  of  a  joint  debt,  he  is  not  precluded  from 
suing  one  of  the  debtors  who  may  be  separately  liable  to  him  in 
respect  of  the  same  debt,  (s) 

^Receipt  in  full. — A  receipt  given  to  one  partner  in  sat-  r^o.^q 
isfaction  of  all  demands  against  him  will  not  discharge  his  ^ 
copartners  unless  that  also  was  intended,  (t) 

the  partnership  indebtedness  to  them,  (p)  See,  for  illustration  of  this  rule, 

less  the  notes  for  forty  per  cent.     Rob-  Lindo  v.  Lindo,  1  Beav.  496  ;  Payler  v. 

€rts  V.  Strang,  38  Ala.  566.  Homersham,  4  Man.  &  S.  423 ;  Simons 

The  plaintiff  and  defendant  were  part-  v.  Johnson,  3  Barn.  &  Ad.  175 ;  Boyes  v. 

ners,  and  the  defendant,  having  received  Bluck,  13  C.  B.  652  ;  Lampon  v.  Corke, 

money  on  the  partnership  account,  min-  5  B.  &  A.  606. 

gled  it  with  money  held  by  him  and  A  (g)  See  Collins  v.  Prosser,  1  Barn.  & 

in  trust,  and  allowed  it  to  pass  into  A's  C.  682. 

hands.    The  plaintiff  afterwards,  having  (r)  Ballam  v.  Price,  2  Moo.  235. 

been  wrongfully  kept  in  ignorance  by  (s)  Simpson  v.  Henning,  L.  R.,  10  Q. 

the  defendant  of  the  receipt  and  dispo-  B.  406 ;  Megrath  v.  Gray,  L.  R.,  9  C.  P. 

sition  of  the  money,  released  A.     Held,  216.    Wilson  v.  Lloyd,  16  Eq.  60,  co;i^ra, 

that  the  defendant  was  accountable  to  must  be  considered  as  overruled  on  this 

plaintiff  for  the  money  so  received,  not-  point ;  Cragoe  v.  Jones,  L.  R.,  8  Ex.  81, 

withstanding  the  release  to  A.    Mum-  was  a  case  of  a  surety, 

ford  V.  Murray,  6  Johns.  (N.  Y.)  Ch.  452.  (t)  Ex  parte  Good,  5  Ch.  D.  46,  where 

393 


239*  TERMINATION    OF    LIABILITY.  [bOOK    II., 

3.  Substitution  of  debtors  and  securities. 

A  liability  which  is  originally  joint,  or  joint  and  several,  may  be 
extinguished  by  being  replaced  by  a  liability  of  a  different  nature;. 
and  this  may  happen  in  one  of  two  ways,  viz.,  either  by  an  agree- 
ment to  that  effect  come  to  between  the  parties  liable  and  the  person 
to  whom  they  are  liable ;  (u)  or  by  virtue  of  the  doctrine  of  merger,, 
independently  of  any  such  agreement. 

(a)   Of  substitution  by  agreement. 

Extinction  of  liability  by  subditution  of  debtors. — In  order  that 
one  liability  may  be  extinguished  by  being  replaced  by  another  by 
agreement,  it  is  essential  that  the  person  in  whom  the  correlative 
right  resides  should  be  a  party  to  the  agreement,  or  should,  at  all 
events,  show  by  some  act  of  his  own  that  he  accedes  to  the  substi- 
tution. If  A,  being  indebted  to  B,  transfers  his  liability  to  C,  and 
B  does  not  assent  to  the  transfer,  his  rights  are  wholly  unaffected, 
he  will  neither  acquire  any  right  against  C  nor  lose  his  former  right 
against  A.  As  regards  B,  the  agreement  between  A  and  C  is  res 
inter  alios  acta,  and  it  does  not  in  any  way  benefit  or  prejudice  him. 
But  if  B  assents  to  the  arrangement  come  to  between  A  and  C,  and 
adopts  C  as  his  debtor  instead  of  A,  then  A's  liability  to  B  is  at  an 
end,  and  B  must  look  for  payment  to  C,  and  to  him  alone.  (.'c)42 

one  partner  was  a  nominal  partner,  and  partner  from  liability  for  the  debts  of  the 

not,  therefore,   liable  to  indemnify  the  old  firm.     Nixdorf  v.  Smith,  16  Pet.  (U. 

others.  S.)  132. 

(w)  Sometimes  called  "  novation,"  but  Where  a  creditor  of  the  firm  sties  a 

nothing   is  really  gained  by  using  this  retiring  partner,  the  burden  of  proof  is 

word.     See,  as    to    this    word,  1  Ch.  D.  on  the  defendant  to  show  his  discharge, 

322,  per  James,  L.  J.  either  by  express  agreement  or  by  facts 

(x)  See,   per  Buller,  J.,  in  Tatlock  v.  from  which  such  agreement  may  be  im- 

Harris,  3  T.  K.  180.  plied.     Hall  v.  Jones,  56  Ala.  493.    But 

42.  Substitution     of     debtors      by  such   agreement  need  not    be  made   in 

agreement. — Where  one   partner  sells  writing.     Hopkins  i;.  Carr,  31  Ind.  260; 

his  share  in  the  partnership  stock  to  a  Schwindler  v.  Euell,  45  How.  (N.  Y.) 

stranger,  and  receives  payment  therefor,  Pr.  33. 

and  the  purchaser  becomes  a  partner  in  The  introduction  into  the  firm  of  a 

the   concern,  such    purchase   and    pay-  new  member  is  a  dissolution  of  the  firm, 

ment  will  not  have  the  effect  to  relieve  Hatchett  v-  Blanton,  72  Ala.  423. 

the  share  of  the  stock  of  the  remaining  Whether  the  assumption,  by  an  in- 

394 


CHAP.  11.,  §  in. J       SUBSTITUTION    OF    DEBTORS. 


239^ 


Agreement  between  partners  does  not  affect  creditors. — To  apply 
this  to  cases  of  partnership,  let  it  be  supposed  that  a  firm  of  three 
members,  A,  B  and  C,  is  indebted  to  D ;  that  A  retires,  and  B  and 


solvent  firm,  of  the  individual  debts  of 
a  retiring  partner  can  in  any  case  be 
valid,  and  as  to  the  proof  required  to 
show  good  faitli  and  a  sufficient  consid- 
eration, see  Keith  v.  Fink,  47  111.  272. 

Under  Stat.  1865,  ch.  113,  a  creditor's 
proof  of  his  claim  and  acceptance  of  a 
dividend,  under  an  order  distributing, 
among  the  joint  and  several  creditors 
alike,  the  estate  in  insolvency  of  a  part- 
ner who,  on  the  dissolution,  had  agreed 
to  pay  the  partnership's  outstanding 
debts,  bars  any  right  of  action  on  the 
debt  against  the  other  jjartner,  although, 
after  the  dissolution,  he  has  changed  his 
domicile  to  the  creditor's  state.  Bucklin 
V.  Bucklin,  97  Mass.  256. 

Where  a  partnership  is  dissolved,  and 
the  partner  continuing  the  business 
assumes  the  liabilities  of  the  firm,  and 
publishes  notice  that  lie  will  pay  them, 
the  other  partners  are  nevertheless  liable 
to  a  creditor  who  did  not  present  his 
claim  in  the  manner  directed  by  the  no- 
tice. Umburger  v.  Plume,  26  Barb.  (N. 
Y.)  461. 

Illustrations. — On  the  dissolution  of 
a  partnership,  it  was  agreed  between  the 
partners  that  one  of  them  should  assume 
and  pay  the  partnership  debts.  A  cred- 
itor, on  being  afterwards  informed  of  the 
arrangement,  replied  that  he  was  satis- 
fied with  it.  Held,  that  such  reply  was 
not  such  evidence  as  would  warrant  the 
jury  in  finding  that  he  had  discharged 
the  other  partner.  Chase  v.  Vaughan, 
30  Me.  412. 

A  and  B  dissolved  partnership,  and 
by  the  agreement  of  dissohition  A  was 
to  pay  tiie  debts  of  the  concern.  C,  a 
creditor  of  the  firm,  assented  to  this  ar- 
rangement, and  promised  to  give  up  the 


partnership  note  and  take  that  of  A 
alone,  but  this  was  not  done.  Held, 
that  B  was  not  released.  Frentress  v. 
Markle,  2  Gr.  (Iowa)  .553. 

In  an  action  by  a  surviving  partner, 
where  the  declaration  contained  the 
usual  common  counts,  in  the  form  pre- 
scribed by  the  act. of  1856,  ch.  112,  and 
a  special  count  on  an  agreement,  the 
evidence  consisted  of  accounts  between 
the  original  firm  of  the  plaintiff'  and  its 
successors  noting  as  agents  of  the  de- 
fendant and  the  defendant,  and  the  writ- 
ten agreement.  Held,  that  the  accounts 
should  not  be  excluded  on  the  ground 
that  the  plaintiff  must  prove  an  ac- 
knowledgment of  indebtedness  on  the 
part  of  the  defendant;  and  that  it  was 
competent  for  the  jury  to  find,  from  the 
facts  proved,  whether  there  was  an  as- 
signment or  transfer  of  the  accounts 
from  the  old  firm  to  the  new,  and 
whether  the  defendant  assented  to  it, 
and  promised,  expressly  or  impliedly, 
to  'pay  the  balance  to  the  plaintilE 
Stewart  v.  Rogers,  19  Md.  98. 

Where,  after  the  dissolution  of  a  part- 
nership between  W.  &  C,  a  creditor  of 
the  firm  stated  an  account  in  which 
they  were  charged  with  certain  goods 
purchased  by  them,  and  at  the  same 
time  stated  a  separate  account  of  his 
dealings  with  W.,  who  had  assumed 
the  adjustment  of  the  partnership  con- 
cerns, in  which  account  W.  alone  was 
charged  with  another  partnership  debt, 
it  was  held  that  C.  was  not  discharged 
from  such  other  partnership  debt 
thereby;  but  that,  whether  he  was  dis- 
charged or  not,  no  one  but  C.  could 
avail  himself  thereof ;  and  a  note  given 
by  C,  either  by  way  of  security  or  satis- 


395 


240^ 


TERMINATION    OF    LIABILITY 


[book  II., 

C,  either  alone  or  together  with  a  *new  partner,  E,  take 
-'  upon  themselves  the  liabilities  of  the  old  firm.  D's  right 
to  obtain  payment  from  A,  B  and  C  is  not  affected  by  the  above 
arrangement,  and  A  does  not  cease  to  be  liable  to  him  for  the  debt 
in  question,  (y)  But  if,  after  A's  retirement,  D  accepts  as  his  sole 
debtors  B  and  C,  or  B,  C  and  E  (if  E  enters  into  the  firm),  then 
A's  liability  will  have  ceased  and  D  must  look  for  payment  to  B 
and  C,  or  to  B,  C  and  E,  as  the  case  may  be.     When,  therefore,  a 


faction  of  such  debt,  would  be  founded 
on  a  good  consideration.  Averill  v.  Ly- 
man, 18  Pick.  (Mass.)  346. 

A,  of  London,  gave  a  letter  of  credit 
to  B  &  C,  of  Boston  (partners  in  a  ship- 
ment), who  thereupon  drew  bills  on  A, 
wliich  he  accepted  and  paid.  B  had 
other  accounts  with  A,  in  which  C  had 
no  concern ;  C  had  funds  in  the  hands 
of  B,  and  requested  B  to  remit  to  A  and 
close  the  account  of  B  &  C.  B  after- 
wards made  a  remittance  to  A,  and  ad- 
vised him  by  letter  of  other  forthcoming 
remittances,  and  requested  him  to  apply 
the  sum  which  was  actually  remitted  to 
B's  account  generally,  and  place  the 
bills  which  A  had  accepted  and  paid 
for  B  &  C  to  B's  debit.  This  letter  -was 
shown  to  C  before  it  was  forwarded  to 
A.  A  replied  that  he  Jiad  received  B's 
letter  and  "noted  the  contents."  This 
letter  was  also  shown  to  C.  Before  this 
letter  was  received,  B  failed,  being 
largely  indebted  to  C;  and  in  about 
seventy  days  after  the  letter  was  writ- 
ten, A  suspended  payment,  not  having, 
in  his  correspondence,  again  alluded  to 
B's  request  to  debit  him  with  the  bills 
accepted  and  paid  for  B  &  C.  About 
four  and  a  half  months  after  said  letter 
was  written,  A  forwarded  his  account 
against  B  &  C,  »nd  it  was  put  in  suit. 
Held,  that  A  had  not,  by  the  terras  of 
his  letter  to  B,  agreed  to  discharge  C, 
and  look  for  payment  to  B  alone ;  that 


there  was  no  consideration  for  such 
agreement,  if  it  had  been  made ;  and 
that  A  was  entitled  to  recover  of  B  &  C. 
Wildes  V.  Fessenden,  4  Mete.  (Mass.)  12. 

A  &  B,  as  copartners,  gave  a  note  to 
C,  and  afterwards  the  copartnership  was 
dissolved,  B  agreeing  to  pay  all  the 
debts,  and  B  and  C  formed  a  copartner- 
ship. Held,  that  this  did  not  operate  as 
an  extinguishment  of  the  note,  unless  it 
was  so  expressly  agreed  between  B  and 
C  at  the  time  their  copartnership  was 
formed,  and  although  it  was  alleged 
that  this  note  was  to  form  a  part  of  C's 
stock  in  the  firm.  Mitchell  v.  Dobson, 
7  Ired.  (N.  C.)  Eq.  34. 

A  judgment  was  confessed  by  D,  in 
favor  of  a  firm  consisting  of  A,  B  and  C, 
to  secure  future  advances.  Three  years 
afterwards  C  withdrew  from  the  firm,  A 
and  B  purchasing  his  interest.  The  new 
firm  continued  to  make  advances,  charg- 
ing them  and  giving  credit  for  pay- 
ments, &c.,  as  before,  no  change  being 
made  in  the  books.  The  judgment  was 
entered  up  by  A  and  B,  and  was  the 
first  lien  on  D's  land.  Held,  that  the 
judgment  secured  the  advances  made 
by  the  old  and  the  new  firm.  Shenk's 
Appeal,  33  Pa.  St.  371. 

iy)  Smith  v.  Jameson,  5  T.  K.  601 ; 
Kodgers  v.  Maw,  4  Dowl.  &  L  66  ;  Dick- 
enson V.  Lockyer,  4  Ves.  36;  Cummins 
V.  Cummins,  8  Ir.  Eq.  723. 


396 


CHAP.  II.,  §  III.J       SUBSTITUTION    OF   DEBTORS. 


240^ 


partner  has  retired  and  a  creditor  of  tlie  firm  continues  to  deal  with 
the  continuing  partner  and  such  other  persons,  if  any,  as  may  have 
become  associated  with  them  in  partnership,  it  is  of  great  importance 
to  ascertain  whether  the  creditor  has  or  has  not  accepted  the  new 
firm  as  his  debtors  in  lieu  of  the  old  firm.  If  he  has,  the  retired 
partner's  liability  will  have  ceased,  whilst  if  he  has  not,  it  will  still 
continue.43 

Liability  not  got  rid  of  by  transferring  share. — Nothing  used  to 
be  more  common  than  for  promoters  of  companies  to  put  forward  a 
prospectus  in  which  it  was  said  that  all  liability  on  the  part  of  a 
shareholder  would  cease  on  a  transfer  of  his  share,  but  the  hope 
thus  held  out  was  as  false  and  delusive  as  that  intended  to  be  raised 


43.  Agreement  between  partners 
does  not  affect  creditors. — Equities 
between  the  partners  do  not  affect  cred- 
itors of  the  firm.  Bartles  v.  His  Cred- 
itors, 11  La.  Ann.  432. 

A  mere  change  in  the  name  or  style 
of  tlie  firm  does  not  affect  its  rights  or 
liabilities.     Gills  v.  Ferris,  82  Mo.  156. 

Where,  on  the  retirement  of  one  part- 
ner, the  others  agree  with  him  to  pay  a 
firm  debt,  which  is  known  to  the  cred- 
itor, the  retiring  partner  will  be  deemed, 
in  law,  a  surety  as  to  that  debt.  Wil- 
liams V.  Boyd,  75  Ind.  286. 

An  agreement  by  an  incoming  part- 
ner to  pay  the  firm  debts  in  considera- 
tion of  an  interest  in  the  firm,  is  not 
within  the  statute  of  frauds,  and  may  be 
enforced  by  creditors  who  were  total 
strangers  to  the  agreement.  Poole  v. 
Hintrager,  60  Iowa  180. 

Where  it  was  agreed  between  a  retir- 
ing partner  and  his  copartners,  who  were 
to  continue  the  business,  that  the  latter 
should  assume  the  old  firm's  debts,  and 
take  all  their  assets,  to  be  used  in  pay- 
ing those  debts,  the  agreement  constitu- 
ted the  new  firm  trustees  of  the  assets 
for  the  benefit  of  the  creditors  of  the  old 
firm,  and  the  interest  of  the  new  firm 


and  their  creditors  is  confined  to  what 
remains,  if  anything,  after  payment  of 
those  debts.  Bowman  v.  Spalding  (Ky.),. 
2  S.  W.  Kep.  911. 

Where  two  partners,  having  ordered  a 
piece  of  work  done  under  contract,  dis- 
solve partnership,  an  agreement  between 
one  of  them  and  the  contractor  that 
such  last-mentioned  partner  should  be 
discharged  from  his  liability  for  tiie 
work  already  done,  is  void  for  want  of 
consideration,  the  other  partner  not  hav- 
ing promised  to  assume  such  liability.  It 
would  be  otherwise  if  the  other  partner 
did  so  promise,  one  debt  being  substitu- 
ted, in  that  case,  for  the  other.  Col  Iyer 
V.  Moulton,  9  R.  I.  90. 

Where,  upon  the  dissolution  of  a  co- 
partnership, one  partner  assumes  a  lia- 
bility, he  does  it  prima  fade,  upon  suffi- 
cient consideration,  leaving  his  copart- 
ners liable  only  as  sureties ;  and  they 
may  take  measures  to  have  the  claim 
assigned  and  collected,  from  the  partner 
liable.    iEtna  Ins.  Co.  v.  Peck,  28  Vt.  93. 

As  to  the  liability  of  a  retiring  part- 
ner, to  one  whom  he  has  notified  to  "  go 
and  get  his  money"  from  the  continuing 
partner,  see  Maier  v.  Canavan,  8  Daly 
(N.  Y.)  272. 


397 


240* 


TERMINATrOX    OF    LIABILITY. 


[book  IL, 


by  the  assertion  that  the  liability  of  the  shareholders  would  be  lim- 
ited to  the  amount  of  their  shares,  (z)  It  cannot  be  too  often 
repeated  that  merely  by  retiring,  a  partner  or  a  shareholder  gets  rid 
of  no  liability  as  to  past  transactions,  unless  there  is  some  statutory 
enactment  applicable  to  his  case ;  and  the  same  observation  applies 
to  a  total  dissolution.  To  use  the  words  of  Mr.  Justice  Heath, 
"  when  a  partnership  is  dissolved,  it  is  not  dissolved  with  regard  to 
things  past,  but  only  witli  regard  to  tilings  future.  With  regard  to 
things  past,  the  partnership  continues  and  always  must  con- 
tinue." (a)  44 


(z)  See  Blimdell  u.  Winsor,  8  Sim.613.  of  the  payee  of  a  note  previously  exe- 

(a)  Wood  V.  Braddick,  1  Taunt.  104.  cuted   by  the  firm,  and  his  transfer  of 

Therefore,   partners  continue   liable  on  his  interest  to  the  other  partners,  who 

the  covenants  entered  into  by  them  in  a  assume   the    firm   debts,   does    not   dis- 

lease  of  the   partnership  premises,   al-  charge  the  retiring  partner  from  liabil- 

though   the   firm   may  have  been   dis-  ity  on  the  note.     Clark  v.  Billings,  59 

solved  since  the  lease  was  granted.     See  Ind.  508. 


Hoby  V.  Roebuck,  7  Taunt.  157 ;  Gra- 
ham V.  Whichelo,  1  Cromp.  &  M.  188. 

44.  Liability  not  got  rid  of  by  trans- 
ferring share. — A  relinquishment  by 
one  ostensible  partner  to  another,  of  all 


In  a  suit  on  a  note  made  by  one  of  the 
partners,  the  fact  that  one  member  of 
the  firm  had  transferred  all  his  interest 
to  his  copartners  may  be  shown,  as  tend- 
ing to  prove  a  dissolution.     Waller  v. 


his  interest  in  the  partnership,  does  not  Davis,  59  Iowa  103. 
discharge  him  from  liability  as  a  part-        Members  of  a  copartnership  associa- 

ner   to    third    persons,  who   afterwards  tion   who  have  assigned    their  interest 

deal  with  the  company  without  notice  therein   to   other  solvent   parties,  with 

of  such  relinquishment.    Grady  v.  Rob-  the  assent  of  their  copartners,  and  who 

inson,  28  Ala.  289.     But  the  sale  of  one  accept  such  assignees  as  copartners   in 

partner's  interest  to  an  outsider,  or  any  their  stead,  and  recognize  and  treat  them 

other  admission  of  the  new  partner  into  as  such,  as  between  themselves,  are  not 

the  firm,  works  a  dissolution.     McCall  liable  for  the  debts  of  the  copartnership 

V.  Moss,  112  III.  493.  existing  at  the  time  of  such  assignment, 

Where  a  partner  having  sold  his  in-  and  they  cannot  be  required  to  contri- 

terest  permits  his  name  to  remain  in  the  bute   for   t>heir  payment   to  those  cou- 

firm  in   consideration  of  an  agreement  tinning   partners   who    have    been    re- 

on  the  part  of  the  purchaser  to  pay  the  quired    to   pay   the   same.      Savage    v. 

firm  debts,  such  retiring  partner  is  liable  Putnam,  32  N.  Y.  501. 
on  a  note  given  by  one  of  his  former       If  a  partner,  after   a  dissolution  of 

partners,  in  the  old  firm  name,  to  one  the  partnership,  assign  all   his  interest 

who  has  no  notice  of  the  change  in  the  in  the  partnership  property  for  a  valu- 

firm.     Gammon  v.  Huse,  100  111.  234.  able  consideration,  and  take  a  covenant 

The  retirement  of  one  of  the  mem-  of  indemnity  against  all  liability  for  the 

bers  of  a  partnership,  with  the  consent  debts  of  the  partnership,  the  covenant 

398 


€HAP.  II.,  §  in.J        SUBSTITUTI.ON    OF    DEBTOES. 


241  = 


The  cases  which  bear  upon  the  question  of  discharge  by  virtue  of 

a  substitution,  by  a  creditor,  of  one  debtor  for  another  *will   r-„^ 

.  .  .  r  241 

be  found,  notwithstanding  some  conflict  between  them,  to   ^ 

be  all  professedly  based  on  the  foregoing  princi2)les  and  on  a  few 

simple  rules,  the  most  important  of  which  are  as  follows : 

1.  Creditors  not  presumed  to  discharge  outgoing  partners. — There 
is  no  a  priori  presumption  to  the  effect  that  the  creditors  of  a  firm 
do,  on  the  retirement  of  a  partner,  enter  into  any  agreement  to  dis- 
charge him  from  liability.  (6)  -15 

2.  Creditor  may  agree  to  look  only  to  continuing  partners. — An 
agreement  by  a  creditor  of  several  persons,  liable  to  him  jointly,  to 
discharge  one  or  more  of  them  and  look  only  to  the  others,  is  not 
necessarily  invalid  for  want  of  consideration,  (c)  46 


does  not  coyer  a  debt  wliich  does  not  made  without  consideration  to  release 
appear  upon  the  partnership  books,  and  the  retiring  partner  from  liability,  is 
was  not  made  known  to  the  assignee  at    nudum  pactum  and  not  binding.     Eagle 


the  time  of  the  contract  of  indemnity. 
Case  V.  Cushman,  3  Watts  &  S.  (Pa.)  544. 

(6)  Such  an  agreement  must  be  proved. 
See  Benson  v.  Hatfield,  4  Hare  37. 

45.  Creditors  not  presumed  to  dis- 


Manufacturing  Co.  v.  Jennings,  29  Kan. 
65  ;  S.  C,  44  Am.  Kep.  668  ;  Walstrom 
V.  Hopkins,  113  Pa.  St.  118. 

A  retiring  partner  may  be  discharged 
from  the  debts  of  the  partnership  by  the 


charge  outgoing  partners. — A  creditor  acceptance,  by  the  creditor,  of  new  notes 

who  takes  the  promissory  note  of  a  new  of  the  other  partners,  as  renewals  of  the 

■firm  in  payment  of  a  debt  due  him  from  notes  first  given,  provided  the  creditor 

the  old  firm,  in  ignorance  of  the  dissolu-  agrees  to  discharge  him  by  the  accept- 

tion  and  supposing  the  note  to  be  that  ance  of  such  new  notes,  which  is  a  ques- 

of  the  old  firm,  may  sue  on  the  original  tion   for  the  jury  ;   but   where  the  new 

indebtedness  without   showing  that  he  notes  are  signed   like  those  first  given, 

was    fraudulently   induced    to  take  the  and   the   creditor    is    ignorant   of    any 


note.    Buxton  v.  Edwards,  134  Mass.  567. 

(c)  Lyth  V.  Ault,  7  Ex.  669. 

46.  Creditor  may  agree  to  look  only 
to  continuing  partners. — Partners  can- 
not by  any  agreement  affect  the  rights 
of  creditors.     But  where,  after  the  disso- 


chnnge  in  the  partnership,  no  agreement 
to  discharge  can  be  inferred.  Bernard 
V.  Torrance,  5  Gill  &  J.  (Md.)  383. 

Where,  after  dissolution,  a  firm  cred- 
itor, with  knowledge  of  an  agreement 
between  the  partners  that  some  of  them 


iution    of    the    partnersliip,    a   creditor  should  assume  and  pay  the  debts  of  the 

takes  the  individual  note  of  one  partner  firm,  takes  the  negotiable  paper  of  the 

for  a  partnership  debt,  he  cannot  after-  latter  in  payment  of  his  debt,  this  will 

wards  hold  the  other  partners  responsi-  discharge  the  other  partners.    Millerd  v. 

ble.     Harris  v.  Lindsay,  4  Wash.  (U.  S.)  Thorn,  56  N.  Y.  402  ;  Stone  v.  Chamber- 

■98  ;  Id.  271.  lain,  20  Ga.  259 ;  Hoopers  v.  McCan,  19 

A  promise  by  a  creditor  of  the  firm.  La.  Ann.  201. 

399 


241*  TERMINATION    OF    LIABILITY.  [bOOK    II., 

3.  Effect  of  doctrine  that  a  release  of  one  partner  is  a  release  of 
all. — Except  under  special  circumstances,  a  creditor  who  releases 
one  partner  discharges  all.  (d)  Consequently,  if  a  creditor  dis- 
charges a  retired  partner,  and  acquires  no  fresh  right  to  obtain  pay- 
ment from  the  others,  either  alone  or  with  a  new  partner,  the 
creditor  will  be  altogether  remediless.  One  test,  therefore,  by  which 
to  determine  whether  a  retired  partner  has  been  discharged  is  to  see 
whether  the  creditor  has  obtained  a  new  right  to  demand  payment ; 
for  if  he  has  not,  no  discharge  can  possibly  be  made  out  by  any 
evidence  which  fails  to  establish  an  extinguishment  of  the  creditor's 
demand  altogether. 

Classification  of  cases. — It  is  proposed  now  to  examine  the 
cases  relating  to  the  liability  of  retired  partners  for  debts  incurred 
before  their  retirement.     They  may  be  conveniently  classified  thus  : 

A.  Cases  in  which  a  retired  partner  has  not  been  discharged. 

(a)  No  new  partner  having  been  introduced  into  the  firna. 

(b)  Although  a  new  partner  has  been  introduced  into  the  firm. 

B.  Cases  in  which  a  retired  partner  has  been  discharged. 

After  these  cases  have  been  examined,  the  analogous  cases  relating 
to  the  discharge  of  the  estate  of  a  deceased  partner  will  be  noticed. 


*242] 


*Class  a  (a). — Cases  in  which  a  retired  partner  has  not  been 

DISCHARGED,  J^O  NEW   PARTNER  HAVING  BEEN  INTRODUCED  INTO 
THE   FIRM. 


Promise  to  look  only  to  continuing  partners. — The  strongest  cases 
of  this  class  are  Lodge  v.  Dicas  (e)  and  David  v.  Ellice.  (/)  In 
each  of  these  a  partnership  had  been  dissolved,  one  member  retiring 
and  the  other  continuing  the  business  and  agreeing  to  pay  the  debts 

Where,  after  dissolution,  the  holder  of  to  accept  the  liability  of  a  new  firm,  for 

a  firm  note  accepts  the  note  of  one  of  the  the  debts  of  the  old  firm,  so  as  to  estop 

firm  payable  at  a  future  date,  retaining  him  from  maintaining  his  claim  against 

interest  by  way  of  discount,  and  agree-  the  outgoing   partners,  see   Kegester  », 

ing  to  release  the  other  partner,  this  is  a  Dody,  19  Blatchf  (U.  S.)  79. 

payment  of  the  firm  note.    Athens  Bank  {d}  Ante  p.  *237. 

V.  Green,  40  Ohio  St.  43L  («)  3  B.  &  A.  611. 

What  is  sufficient  evidence  to  show  (/)  5  Barn.  &  C.  196,  aud  1  Car.  & 

an  agreement  on  the  part  of  a  creditor  P.  369. 

400 


CHAP.  II.,  §  III.J       SUBSTITUTION    OF    DEBTORS.  242* 

of  the  old  firm.  In  each  case  the  plaintiff  knew  of  the  arrange- 
ment, and  his  debt  was  transferred,  with  his  consent,  to  the  books  of 
the  new  firm.  In  each  case,  moreover,  there  was  strong  evidence 
to  show  that  the  plaintiff  had  agreed  to  discharge  the  retired  mem- 
ber and  to  look  only  to  the  others.  But  in  each  case  it  was  held 
that  the  retired  partner  continued  liable  and  that  the  plaintiff  had 
done  nothing  to  discharge  him ;  and  the  fact  tliat  no  person  had 
become  liable  to  the  plaintiff,  who  was  not  so  originally,  was  relied 
upon  by  the  court  as  showing  that  there  was  no  consideration  for 
the  alleged  discharge,  {g) 

Observations  on  these  cases. — These  two  cases  have  been  much 
criticised,  {h)  and  they  certainly  went  too  far,  for  the  proposition 
that  a  creditor  of  a  firm  cannot,  for  want  of  consideration,  abandon 
his  right  against  a  retiring  partner  and  retain  it  against  the  others, 
unless  they  give  some  fresh  security,  has  been  shown  to  be  erroneous 
and  is  now  exploded ;  {i)  and  there  can  be  little  doubt  that  if  simi- 
lar cases  were  to  arise  again  and  the  jury  found  for  the  defendant, 
the  verdict  would  not  be  disturbed. 

This  appears  from  Thompson  v.  Percival,  {k)  In  that  case  .the 
defendants,  Charles  Percival  and  James  Percival,  had,  as  partners, 
become  indebted  to  the  plaintiff.  The  partnership  was  dissolved, 
and  it  was  agreed  that  the  business  should  be  carried  on  by  James, 
and  that  he  should  receive  and  pay  all  debts,  and  assets  sufficient  to 
pay  debts  of  the  firm  were  left  in  his  hands.  The  plaintiff,  on  ap- 
plying to  James  for  pay*ment  was  told  that  he  must  look  r^24Q 
to  him,  James,  alone,  and  the  plaintiff  accordingly  drew  a 
bill  on  James  and  the  bill  was  accepted  by  him.  The  bill  being 
afterwards  dishonored,  the  plaintiff  sued  both  James  and  Charles 
for  the  original  debt  and  obtained  a  verdict  for  the  full  amount ; 
but  the  defendants  had  leave  to  move  for  a  nonsuit  if  the  court 
should  be  of  opinion  that  Charles  had  been  discharged.  The  court, 
without  deciding  that  point,  held  that  the  question  ought  to  have 
been  left  to  the  jury,  and  a  new  trial  was  therefore  directed.  The 
court  held  that  the  facts  proved  raised  a  question   for  the  jury 

{g)  See,  too,  Thomas  v.  Shillibeer,  1    M.  623;  2  Mees.  &  W.  493. 
Mees.  &  W.  124.  (i)  Ante  p.  *241,  note  (c). 

{h)  See  5  B.  &  Ad,  933 ;  2  Cromp.  &        (k)  5  B,  &  Ad.  925. 

401  26 


243*  TERMINATION    OF    LIABILITY.  [bOOK    II., 

whether  it  was  agreed  between  the  })laintiff  and  James  that  the 
former  should  accept  the  latter  as  his  sole  debtor,  and  should  take 
the  bill  of  exchange  accepted  by  him  alone  by  way  of  satisfaction 
for  the  debt  due  from  both.  If  it  was  so  agreed,  the  court  thought 
that  the  agreement  and  receipt  of  the  bill  would  be  a  good  answer 
on  the  part  of  Charles  by  way  of  accord  and  satisfaction,  (l) 

It  is  not  unusual  to  represent  Lodge  v.  Dicas  and  David  v. 
EUice  as  altogether  overruled  by  Thompson  v.  Percival  and  other 
eases.  This,  however,  is  not  quite  correct.  The  three  cases  together 
establish  (1)  that  a  creditor  who  treats  the  continuing  partners  as 
his  debtors  does  not  necessarily  abandon  his  right  to  resort  to  a 
retired  partner  for  payment ;  (2)  that  whether  he  does  or  does  not 
is  a  mixed  question  of  law  and  fact  which  ought  to  be  submitted  to 
a  jury  ;  and  (3)  that  their  verdict  will  not  be  disturbed  by  the  court 
upon  the  grounds  acted  on  in  Lodge  v.  Dicas  and  David  v.  Ellice. 
Treating  continuing  partners  as  debtors. — That  a  creditor  who 
treats  the  continuing  partners  as  his  debtors  does  not,  without  more, 
discharge  a  retired  partner,  is  shown  by  other  cases,  and  especially 
by  those  in  which  the  continuing  ])artners  have  paid  interest  on  the 
old  debt  at  a  rate  or  in  a  manner  differently  from  that  previously 
adopted. 

An  old  case  on  this  head,  and  one  often  referred  to,  is  Heath  v. 
Percival,  (m)  in  which  two  partners,  indebted  to  the  plaintiff  on  a 
bond,  dissolved  partnership.  One  of  them  continued  to  *carry  on  the 
business,  and  took  upon  himself  the  partnership  debts,  and 
-^  public  notice  was  given  that  the  creditors  of  the  firm  were 
either  to  come  in  and  be  paid  their  debts  or  to  look  for  payment  to  the 
continuing  partner  only.  The  plaintitf  came  in,  but  instead  of 
being  paid  off,  he  kept  the  bond,  receiving  interest  at  six  per  cent, 
instead  of  five  per  cent.  It  was  held  that  he  did  not  thereby  dis- 
charge the  retired  partner  from  his  liability  to  pay  the  bond  with 
interest  at  five  per  cent.47 

(/)  In   Evans  v.   Drummond,  4  Esp.  47.  Treating    continuing    partners 

89,  and  Eeed  v.  White,  5  Id.  122,  a  re-  as  debtors.— A  note  given  in  the  firm 

tiring  partner  was  held  discharged  on  name,  after  dissohition,  for  a  firm  debt, 

the  ground  here  referred  to.     See  post  by  a  partner  without  authority  to  give 

J,.  *247.  it,   will    not   extinguish    the   firm    debt 

(m)  1  P.  Wms.  G82,  and  1  Str.  403.  thougli  both  the  creditor  and  the  part- 

402 


CHAP.  II.,  §  III.]       SUBSTITUTION    OF    DEBTORS. 


244^ 


Taking  a  new  security  from  them. — Moreover,  if  the  continuing 
partners  give  a  new  security  for  the  old  debt,  this  will  not  operate 
to  discharge  the  retired  partner,  unless  the  creditor  intended  that 


ners  believed  it  would  have  that  eflect. 
Oardner  v.  Conn,  34  Ohio  St.  187.  And 
see  Turnbow  v.  Broach,  12  Bush  (Ky.) 
455. 

In  Winter  v.  Innes  (4  Myl.  &  C.  101, 
108,  109)  Lord  Cotlenham  said  :  "  The 
question,  therefore,  is  whether  a  credi- 
tor of  a  firm,  who,  knowing  of  the  death 
of  one  of  the  firm,  continues  to  deal,  as 
before,  with  the  survivor  for  any  length 
of  time,  without  requiring  payment  of 
the  balance  due  to  him  from  the  firm  at 
the  time  of  the  death,  thereby  loses  the 
remedy  which  he  had  in  equity  against 
the  estate  of  the  deceased  partner,  par- 
ticularly in  a  case  in  which  there  is  not 
only  no  evidence  of  any  intention  to 
abandon  such  claim,  and  to  adopt  the 
individual  responsibility  of  the  surviv- 
ing partner  in  its  stead,  but  the  total 
absence  of  any  object  or  consideration 
for  so  doing,  and  conclusive  evidence 
that  the  principal  object  of  the  forbear- 
ance was  not  to  press  upon  or  prejudice 
the  estate  of  the  deceased,  of  whose  will 
the  creditor  was  himself  a  trustee  and 
executor,  though  he  did  not  prove.  It 
would,  I  think,  be  extraordinary  if 
there  were  authorities  to  be  found  in 
support  of  the  afiirmative  of  this  propo- 
sition. I  will  shortly  refer  to  some  of 
the  principal  cases  at  law  and  in  equity 
which  bear  upon  this  subject.  The 
cases  at  law  have  necessarily  arisen 
where  the  dissolution  of  the  partnership 
has  taken  place  by  arrangement  be- 
tween the  partners,  and  not  by  death. 
It  will  be  found  that  in  some,  even 
where  it  was  clear  that  the  creditor  in- 
tended to  take  the  separate  security  of 
the  continuing  partner  in  lieu   of  the 


joint  liability  of  the  dissolved  firm,  the 
retired  partner  was  held  not  to  be  dis- 
charged, as  in  David  v.  Ellice  and 
Lodge  V.  Dicas,  in  which  the  creditor, 
with  a  knowledge  that  the  continuing 
partner  had  agreed  to  pay  all  the  debts, 
took  his  personal  security  for  the  debt; 
but  it  was  held  that  he  had  not  thereby 
released  the  retiring  partner,  upon  the 
ground  of  want  of  consideration  for  his 
so  doing.  These  decisions  have  been 
considered  as  carrying  the  doctrine  very 
far,  and  undoubtedly  they  do  ;  and  the 
true  ground  appears  to  me  to  have  been 
acted  upon  in  Bedford  v.  Deakin,  and 
Thompson  v.  Percival.  In  the  former 
it  is  laid  down  that  to  discharge  the  re- 
tiring partner  it  must  appear  that  the 
creditor  accepted  the  separate  security 
of  the  continuing  partner  in  discharge 
of  the  joint  debt;  and  in  the  latter  case, 
although  the  creditor  knew  that  the 
continuing  partner  had  agreed  to  pay 
all  debts,  and  with  that  knowledge  had 
taken  a  bill  from  him,  for  the  payment 
of  which,  when  due,  he  afterwards  al- 
lowed two  months,  yet  the  court,  upon 
a  motion  for  a  new  trial,  ordered  it,  that 
it  might  be  put  to  the  jury  whether  the 
plaintiff  had  agreed  to  take,  and  did 
take,  the  bill  in  satisfaction  of  the  joint 
debt.  If,  therefore,  the  cases  in  equity 
of  clairrrs  against  the  estates  of  deceased 
partners  are  to  be  regulated  by  the 
same  principle,  there  can  be  no  doubt 
of  the  right  conclusion  in  the  present 
case,  for  there  was  no  new  security 
given,  and  instead  of  an  intention  ap- 
pearing, or  any  agreement  being  proved, 
to  release  the  estate  of  Mr.  Winter,  all 
the  evidence  proves  directly  the  reverse. 


403 


244^ 


TKIIMIXATIOX    OF    LIABILITY. 


[book  II.^ 


such  should  be  the  case,  or  unless  the  new  security  is  of  such  a 
nature  as  to  merge  the  original  debt.  In  Bedford  v.  Deakin  (?i) 
three  partners  were  indebted  to  the  plaintiff  on  bills  of  exchange. 
They  dissolved  partnership  and  arranged  between  themselves  that 
one  of  them  should  pay  the  plaintiff.  The  plaintiff  was  informed 
of  this  arrangement  and  took  from  one  of  the  partners  his  separate 
promissory  note,  endorsed  by  a  third  party,  for  the  amount  of  the 
debt,  but  expressly  reserved  his  right  to  look  to  all  three  partners 
for  payment,  and  the  plaintiff  retained  the  bills  already  in  his  pos- 
session. The  notes,  when  due,  were  taken  up  by  other  bills,  and 
they  in  their  turn  were  several  times  renewed.  Ultimately  the 
plaintiff  sued  all  the  three  partners  on  the  original  bills,  and  he 


It  cannot  be  disputed  now  that  the  es- 
tate of  a  deceased  partner  is  liable  in 
equity  to  the  creditors  of  the  firm,  al- 
though the  legal  remedy  exists  only 
against  the  survivors.  When,  and  by 
what  means,  is  that  liability  to  termi- 
nate? Sir  William  Grant,  in  Vulliamy 
V.  Noble  (and  he  had  much  considered 
the  question  in  Sleech's  Case  in  De- 
vaynes  v.  Noble),  has  answered  the 
question.  He  says :  '  The  deceased 
partner's  estate  must  remain  liable  in 
equity  until  the  debts  which  affected 
him  at  the  time  of  his  death  have  been 
fully  discharged.  There  are  various 
ways  in  which  the  discharge  may  take 
place,  but  discharged  they  must  be  be- 
fore his  liability  ceases.'  The  discharge 
may  be  by  direct  payment,  or  by  deal- 
ings with  the  continuing  partner  oper- 
ating as  payment  of  the  joint  debt,  or, 
in  the  terms  of  Thompson  v.  Percival, 
the  dealings  may  arise  from  the  credi- 
tors having  agreed  to  take,  and  taking, 
the  security  of  the  survivor  in  satisfac- 
tion of  the  joint  debt;  or  there  may  be 
an  equitable  bar  to  the  remedy,  for  (as 
Lord  Eldon  expresses  it  in  Ex  parte 
Kendall):  'As  the  right  stands  only 
upon  equitable  grounds,  if  the  dealing 


of  the  creditor  with  the  surviving  part- 
ners has  been  such  as  to  make  it  in- 
equitable that  he  should  go  against  the 
assets  of  the  deceased  partner,  he  will 
not,  upon  general  rules  and  principles, 
be  entitled  to  the  benefit  of  the  demand.' 
In  the  present  case  there  is  a  total  ab- 
sence of  any  such  equitable  defence  to 
the  claim  upon  the  estate  of  Mr.  Win- 
ter, as  there  is  of  any  intention  or  con- 
tract to  abandon  it.  The  more  modern 
cases  of  Cowell  v.  Sikes,  Wilkinson  v. 
Henderson,  and  Braithwaite  v.  Britain, 
in  addition  to  the  former  authorities,, 
leave  no  doubt  that  in  this  case  nothing 
has  taken  place  which  can  bar  Mr^ 
Baillie's  claim  (admitted  to  have  at  one 
time  existed)  to  compel  payment  of 
so  much  of  the  debt  due  to  him  from 
the  firm  as  remains  unpaid." 

(n)  2  B.  &  A.  21-0.  See,  too,  Swire  v. 
Redman,  1  Q.  B.  D.  536,  where  the 
plaintiff  had  not  expressly  reserved  his- 
rights  against  the  retired  partner.  See, 
also,  Featherstone  r.  Hunt,  1  Barn. 
&  C.  113;  Spenceley  v.  Greenwood,  1 
Fost.  &  F.  297.  Compare  Evans  v. 
Drummond,  4  Esp.  89,  noticed  ir^ra,  p. 
*247. 


404 


CHAP,  ir.,  §  III.]       SUBSTITUTION    OF    DEBTORS.  244* 

was  held  entitled  so  to  do,  never  having  discharged  any  of  them, 
either  intentionally  or  other\vise.48 

48.    Taking    a    new    security   from  Taylor,  12  La.  Ann.  773. 

continuing    partners. — A    note    given  Where   a   partnership  was  dissolved 

by  one  partner  after  dissolution,  for  a  and  a  new  firm  was  formed,  consisting 

debt  of  the  firm,  is  not  an  extinguish-  in  part  of  the  same  members,  a  creditor 

ment  or  satisfaction  of  the  original  debt,  of  the  old  firm  with  notice  of  the  dis- 

so  as   to  discharge   the  other    partner,  solution,  taking,   in    liquidation  of  his 

unless   such    was    the   agreement  when  claim,  drafts  of  the  old   firm  upon   the 

the  note  was  given ;  and  this  is  a  fact  new,  accepted  by  the  latter  and  drawn 

for  the  determination  of  a  juiy.    Mason  by  a  member  of  both,  cannot,  upon  lail- 

V.  Wickersham,  4  Watts  &  S.  (Pa.)  100;  ure  of  the  new  firm,  claim  payment  of 

Bernard  v.  Torrance,  5  Gill  &  J.  (Md.)  the  members  of  the  old,  unless  he  can 

383  ;  Davis'  Estate  v.  Desauque,  5  Whart.  show  their  assent  to  the  making  of  the 

(Pa.)  530 ;  Leabo  v.  Goode,  67  Mo.  126  ;  drafts.     Paterson  v.  Camden,  25  Mo.  13. 

Folk  V.  Wilson,  21  Md.  538.     See,  also.  Illustrations.— A  drew  a  bill  on  B,  C 

Tyner  v.  Stoops,  11  Ind.  22;  Bowyer  v.  &  Co.,  which  was  accepted,  and  by  him 

Knapp,  15  W.  Va.  278;   In  re  Parker,  negotiated  to  a  bank.     At  maturity  the 

19  Bank.  Reg.  340 ;  Hill  v.  Marcy,  49  draft  was  paid  by  a  like  bill  drawn  on 

N.  H.  265 ;  Townsends  v.  Stevenson,  4  B  alone,  the  firm  in  the  meantime  hav- 

Rich.  (S.  C.)  59;  Landolfo  v.  Appleton,  ing  been  dissolved,  which  last  bill  A,  as 

40  N.  Y.  533.     The  rule  is  the  same,  endorser,   was   compelled    to   take    up. 

even   though  such  note  is  signed  by  a  Held,  that   he  could    not   maintain  an 

surety.     Varnell  v.  Anderson,  14  Miss,  action  against  the  firm  to  reimburse  the 

619.  amount  tlius  paid.     Springer  v.  Shirley, 

Where  a  firm  consists  of  one  active  11  Me.  204. 

and  one  or  more  dormant  partners,  and  The  firm  of  F.  &  S.  having  dissolved, 

a  note  is  given,  the  taking  of  a  renewal  a  creditor  refused  to  accept  the  note  of 

of  such   note  from   the  active  partner,  S.  and  thereby  discharge  F.     Held,  that 

after  dissolution,  and  without  any  intent  his  receiving  and  retaining  what  pur- 

to  discharge  the  dormant  partners,  does  ported  to  be  a  note  of  the  late  firm  of  F. 

not  release  the  firm   from   the  original  &   S.,    without  knowledge    that    it   was 

claim.    Parker  v.  Canfield,  37  Conn.  250.  signed  by  S.  alone,  without  authority,  in 

Where  a  creditor  of  the  former  part-  the  firm  name,  will  not  discharge  F.,  the 

nership  drew  on  those  persons  who  con-  creditor  not  having  unduly  delayed  in 

tinned  the  social  style  of  the  late  firm,  enforcing  this   claim.     Adler  v.  Foster, 

for  account  of  a  balance  due  him  by  the  39  Mich.  87. 

former  partnership,  and  his  drafts  were  A    &    B,    being    partners,    purchased 

protested  for  non-payment,  and  paid  by  goods  of  C  for  the  partnership,  and  gave 

the  drawer  supra  protest,  a  member  of  each  his  separate  note,  with  his  separate 

the  former  partnership,  who  is  sued  for  surety,  for  a  moiety  of  such  goods.     A 

Buch  balance,  cannot  maintain  that  there  afterwards  went  out  of  the  concern,  and 

was  a  novation  of  the  debt.     The  drafts  B  agreed  to  pay  both  notes.     A's  was 

are  to  be  held  as  having  been  drawn  on  therefore  canceled,  and  B  gave  a  new 

his  agents  by  his  authority.     Skannel  v.  note,  with  the  surety  who  was  on   his 

405 


244*  TERMINATION   OF    LIABILITY.  [bOOK    II., 

Liability  same  in  equity  as  at  law. — Nor  was  there  any  difference, 
in  such  cases  as  these,  between  the  liability  of  a  retired  partner  at 
law  and  in  equity.  In  Oakford  v.  European  and  American  Steam- 
ship Company,  (o)  a  partner  retired,  and  the  continuing  partners  in- 
demnified him  against  all  claims  that  might  be  made  against  him  as 
a  member  of  the  firm.  Disputes  afterwards  arose  between  the  con- 
tinuing partners  and  a  company  respecting  a  contract  entered  into 
before  the  retirement.  These  disputes  were  *partly  ad-  r^^n^r 
justed.  Those  unadjusted  were  referred  to  arbitration,  pur- 
suant to  a  clause  in  the  contract.  The  reference  was  afterwards 
revoked,  and  an  action  upon  the  contract  wa.s  then  brought  against 
the  continuing  partners  and  the  retired  partner.  The  retired  part- 
ner sought  to  have  this  action  restrained  by  injunction,  upon  the 
ground  that  his  retirement  and  indemnity  had  placed  him  in  the 
position  of  a  surety  only  for  the  due  performance  of  the  contract, 
and  that  what  had  taken  place  since  the  retirement,  which  was  known 
to  the  company,  had  discharged  him.  But  it  was  held  that  his 
liability  continued,  and  his  bill  was  dismissed,  with  costs. 

Position  of  dormant  partners. — The  principle  of  the  above  cases 
applies  to  dormant  partners  even  more  strongly  than  to  others,  for 
a  creditor  who  has  a  security  of  which  he  is  unaware,  cannot  inten- 
tionally give  up  that  security.  Therefore,  if  A  and  B  are  partners, 
and  the  two  become  indebted  to  a  creditor  who  knows  only  of  A, 
and  then  B,  the  dormant  partner,  retires,  no  dealings  between  the 
creditor  and  A  will  discharge  B  from  his  liability  to  be  sued  when 
discovered,  unless  those  dealings  extinguish  the  original  debt,  not 
only  as  against  B,  but  also  as  against  A.  {p) 

other  note.     Subsequently,  B,  failing  to  of  the  "debt  originally  contracted  by  A 

pay  these  debts,  received  the  surety  on  &  B  with"  C.     Held,  that  this  applied 

his  note  into  partnership  in  the  business,  to  both  the  original  notes  and  the  note 

and  entered  into  articles  of  agreement  substituted  for  A's.     Gordon  v.  Joslin,  4 

with  him,  by  which  the  surety  was  to  Hayw.  (Tenn.)  115. 

receive  all  debts  due  to  B  and  the  former  (o)  1  Hem.  &  M.  182. 

partnership,  and  all  produce  taken  in  dis-  (p)  Robinson  v.  Wilkinson,  3  Price 

charge  of  debts ;  and  the  surety  agreed  538. 
to  appropriate  the  same  to  the  payment 

406 


CHAP.  II.,  §  III.]       SUBSTITUTIONS    OF    DEBTORS.  245* 

Class  A  (6). -Cases  ix  which  a  retired  partner  has  not  been  dis- 
charged. ALTHOUGH  A  NEW  PARTNER  HAS  BEEN  INTRODUCED  INTO 
THE  FIRM. 

Effect  of  introduction  of  new  partner  on  the  liability  of  a  retired 
paHner. — The  introductiou  of  a  new  partner  has  no  effect  on  the 
h'ability  of  a  retired  partner,  unless  the  liability  of  the  former  is 
substituted  by  the  creditor  for  that  of  the  latter,  which  cannot  be 
the  case  unless  the  creditor  can,  as  of  right,  hold  the  new  partner 
liable  for  the  old  debt.  This,  moreover,  he  cannot  do  by  virtue  of 
any  agreement  between  the  partners  themselves ;  and  even  if  the 
new  firm  adopts  the  old  debt  and  pays  interest  on  it,  this  is  prima 
facie  only  in  pursuance  of  some  agreement  between  the  partners 
themselves,  and  a  creditor  who  does  no  more  than  allow  the  part- 
ners to  carry  out  that  agreement  does  not  debar  himself  of  his  right 
to  look  for  payment  to  those  originally  iudebted  to  him. 
^  -|  *A  leading  case  on  this  head  is  Kirwan  v.  Kirwan.  [q) 
^  There,  three  partners,  C,  M.  and  iST.,  were  indebted  to  the 
plaintiff.  C.  retired,  and  M.  and  N.  continued  in  partnership 
together,  and  agreed  to  discharge  the  debts  of  the  old  firm.  M. 
afterwards  retired,  and  I*^.  took  in  a  new  partner.  The  plaintiff's 
account  was  transferred  from  the  books  of  the  old  to  the  books 
of  the  new  partnership,  and  interest  was  paid,  and  accounts  were 
rendered  to  him  as  before.  The  plaintiff  was  informed  of  the 
dissolution,  and  had  stated  to  one  of  the  retired  partners  that  he 
was  aware  he  had  no  further  claim  upon  him.  But  it  was  held 
that  the  three  original  partners  remained  liable,  as  there  was 
nothing  to  show  that  the  security  of  the  new  firm  had  been  sub- 
stituted for  that  of  the  old,  and  the  statement  above  referred  to 
could  not  be  regarded  as  an  agreement  to  discharge  the  retired 
partner. 

In  Gough  V.  Davies(?')  three  persons  were  partners  as  bankers, 
and  were  indebted  to  the  plaintiff.  One  of  the  partners  retired ; 
a  new  partnership  was  formed  between  the  continuing  partners  and 
other  persons ;  the  plaintiff's  debt  was  transferred  to  the  books  of 
the  new  firm,  and  he  assented  to  such  transfer.     Moreover,  the 

(9)  2  Cromp.  &  M.  617.  (r)  4  Price  200. 

407 


246*  TERMINATION    OF    LIABILITY.  [bOOK    II., 

plaintiff  eontiniieJ  to  deposit  money  with  the  new  firm,  and  was 
paid  by  it  interest  on  the  old  debt  and  new  deposits,  as  if  they  all 
formed  one  debt.  But  it  was  held  that  there  was  nothinjr  in  all 
this  to  show  any  agreement  by  the  ])laintitf  to  discharge  the  re- 
tired partner,  and  he  was  consequently  iield  liable  for  the  old  debt. 

Blew  V.  Wyatt(s)  is  another  case  to  the  same  eflPect.  A  clerk 
lent  money  to  his  employers,  who  were  in  partnership  as  brewers, 
and  took  an  acknowledgment  for  it.  Several  changes  took  place 
in  the  firm,  one  of  the  original  partners  retiring  and  other  persons 
from  time  to  time  coming  in  and  going  out.  The  clerk  remained 
in  the  employ  of  the  firm  notwithstanding  these  changes,  and  was 
aware  of  them,  and  was  always  paid  interest  by  the  firm  for  the 
time  being.  He  was  nevertheless  held  entitled  to  sue  the  two 
original  partners  for  the  money  he  had  lent  them. 

Right  to  sue  new  Jinn  not  inconsistent  ivith  right  to  sue  the  old 
firm. — Whether,  in  these  cases  of  Kirwan  v.  Kirwan,  Gough  v. 
*Davies  and  Blew  v.  Wyatt,  the  creditor  could  have  sued  |-^..-,,_ 
the  new  firm  may  perhaps  be  open  to  doubt.  (^)  If  he  ^ 
could  not,  it  would  be  absurd  to  contend  that  the  liability  of  the 
new  firm  was  substituted  for  that  of  the  old ;  whilst  if  he  could, 
the  evidence  was  not  sufficient  to  show  an  iutgntion  on  his  part  to 
deprive  himself  of  the  security  afforded  by  the  undoubted  liability 
of  the  original  firm  before  any  change  in  it  took  place.  It  by  no 
means  follows  that  a  creditor  who  assents  to  an  arrangement  by 
which  a  new  person  becomes  liable  to  him,  consents  to  abandon  his 
hold  on  another  person  clearly  liable  to  him  already;  and  unless  a 
substitution  of  liability  can  be  established,  the  old  liability  re- 
mains, (w)  49 

(s)  5  Car.  &  P.  397.  over  of  part  of  the  goods  to  the  new 

(<)  See  per  BoUand,  B.,  2  Cromp.  &  firm,  instructs  the  latter  to  sell  the  goods 

M.  628 ;    Daniel  v.  Cross,  3  Ves.  277 ;  and  remit  the  proceeds,  this,  in  the  ab- 

Furgusson  v.  Fyffe,  8  CI.  &  F.  121.  sence  of  explanation,  will  discharge  the 

(w)  See  Harris  v.  Farwell,  15  Beav.  old  firm  from  liability  as  to  the  goods  so 

31.  turned  over,  but  not  for  the  balance  of 

49.  What  will  not  discharge  retir-  the    consignment.      Hall   v.   Jones,    56 

ing  partner,  although  a  new  partner  Ala.  493. 

has  entered  the  firm. — Where  the  con-  Where   a  partnership  was  dissolved, 

signer  of  goods  to  a  firm,  being  notified  and  a  new  firm  was  formed,  including, 

of   its  dissolution,  and   of   the   turning  with  one  exception,  the  members  of  the 

408 


CHAP.  II.,  §  III.]       SUBSTITCTKJN    OF    DEBTORS.  247* 

Class  B. — Cases  in  which  a  ketired  partner  has  been  evischarged. 

In  all  these  cases  it  will  be  found  that  the  court  or  a  jury  has 
come  to  the  conclusion  that  the  creditor  has  in  fact,  either  expressly 
or  impliedly  from  his  course  of  dealing  with  the  continuing  partners, 
adopted  them  as  his  sole  debtors,  and  thereby  in  fact  discharged  the 
retired  partner,  (x) 

Retired  partner  may  be  discharged  though  no  new  partner  comes 
in. — That  a  retired  partner  may  be  discharged  by  the  creditor's 
adoption  of  the  other  partners  as  his  sole  debtors,  although  no  new 
partner  has  been  introduced  into  the  firm,  is  clear  from  the  case  of 
Thompson  v.  I*erc\va],(y)  already  noticed. 

In  Evans  v.  Drummond(2;)  a  firm  of  two  partners  gave  a  part- 
nership bill  for  goods  supplied  them.  One  of  the  partners  retired, 
and  the  bill  when  due  was  not  paid,  but  was  renewed  by  another 
bill  given  by  the  partner  who  continued  the  business.  The  creditor 
took  this  bill  knowing  of  the  change  in  the  firm.  Lord  Kenyon 
held  that  by  so  doing  the  creditor  had  relied  on  the  sole  security 
♦o-iQi  °^  *^^^  continuing  partner,  and  had  dis*charged  the  other. 
-^  Reed  v.  White  (a)  is  a  similar  case  and  to  the  same  effect. 

Effect  of  introduction  of  new  partner. — The  inference  that  a 
retired  partner  has  been  discharged  is  greatly  facilitated  by  the 
circumstance  that  a  new  partner  has  joined  the  firm  and  become 

former  concern,  it  was  held  that  as  be-  enforce  this  intention  for  the  benefitof  the 

tween  the  latter  firm  and  the  retiring  creditors  of  the  new  firm.    Dayv.  Weth- 

partner,  it  would  not  be  presumed  that  erly,  29  Wis.  363.    S.  P.,  Smith  v.  Peters, 

debts  of  the  latter  firm  were  contracted  20  How.  (N.  Y.)  Pr.  121. 

for  payment  of  debts  of  the  former  one.  (x)  Mr.  Pollock  says,  truly,  that  there 

Chaffin  V.  Chaffin,  2  Dev.  &  B.  (N.  C.)  is  nothing  to  prevent  a  firm  from  stipu- 

Eq.  255.  lating  with  any  creditor  that  he  shall 

A   firm   of    two    partners    dissolved,  look  only  to  the  members  of  the  firm 

organizing  again  with  the  addition  of  a  for  the  time  being.     Dig.  (3d  ed.)  30. 

third   partner.     The  new  firm   gave  a  See  Hort's  Case  and  Grain's  Case,  1  Ch. 

trust   deed    of    property    acquired    by  D.  307. 

money    contributed    by    the    incoming  {y)  5  B.  &  Ad.  925  ;  mite  p.  *242. 

partner,  to  secure  money  due  from  both  (z)  4  Esp.  89.     Compare   Bedford  v. 

firms  to  a  bank,  the  understanding  being  Deakin*  2  B.  &  A.  210,  noticed  ante  p. 

that  the  new  partner's  interest  should  be  *244. 

applied  to  secure  the  indebtedness  of  the  (a)  5  Esp.  122. 
new  firm  only.     Held,  that  equity  would 

•109   ■ 


248*  TERMINATION    OF    LIABILITY.  [bOOK    II., 

liable  to  the  creditor  in  respect  of  the  debt  in  question.  (6)  But 
this  is  not  necessarily  conclusive,  for  there  may  be  circumstances 
showing  that  sucii  was  not  the  intention  of  the  parties,  (c)  At  the 
same  time,  in  the  absence  of  any  such  evidence,  the  acceptance  by 
the  creditor  of  the  liability  of  a  new  partner  will  practically  pre- 
clude him  from  afterwards  having  recourse  to  the  retired  partner,  [d) 
In  Hart  v.  Alexander  (e)  the  plaintiff,  an  officer  in  the  East  India 
Company's  service,  had,  in  1813,  opened  an  account  with  the  house 
of  Alexander  &  Co.,  of  Calcutta,  which  failed  in  1832.  The  de- 
fendant retired  from  the  firm  in  1822,  when  a  new  partner  was 
introduced,  and  since  that  time  other  changes  had  taken  place, 
some  of  the  old  partners  retiring  and  new  ones  coming  in.  The 
defendant's  retirement  was  advertised,  and  there  was  evidence  to 
show  that  the  plaintiff  was  aware  of  the  fact.  The  new  firms 
from  time  to  time  accounted  with  the  plaintiff  and  paid  him  in- 
terest, sometimes  at  one  rate  and  sometimes  at  another.  On  the 
bankruptcy  of  the  firm  in  1832,  the  plaintiff  proved  the  amount 
of  his  debt  against  its  joint  estate.  The  plaintiff  afterwards  sued 
the  defendant,  and  the  case  was  tried  before  Lord  Abinger,  who  is 
reported  to  have  said  to  the  jury: 

"To  ask  you  if  there  was  an  agreement  by  the  plaintiff  to  discharge  the  de- 
fendant, is  to  put  the  case  upon  a  false  issue,  the  agreement,  if  any,  being  an 
agreement  raised  by  construction  of  law ;  the  true  question  being  whether  the 
plaintiff  did  not  go  on  dealing  with  the  new  firm,  and  making  up  fresh  accounts 
with  tliem,  so  as  to  discharge  the  defendant.  I  take  the  law  to  be  this:  Where 
a  debtor  who  is  a  partner  in  a  firm  leaves  that  firm,  and  any  person  trading 
with  the  firm  has  notice  of  it,  and  he  goes  on  dealing  *with  the  firm  and  r*24Q 
making  fresh  contracts,  that  discharges  the  retiring  partner,  though  no 
new  partner  comes  in.  So  it  is  if  the  creditor  draws  for  part  of  his  balance  and 
sends  in  more  goods;  so,  if  the  creditor  strike  a  fresh  balance  with  the  new  part- 
ners for  a  diflerent  rate  of  interest ;  so,  if  a  new  partner  comes  in  and  the  creditor 
accepts  an  account  in  which  the  new  partner  is  made  liable  for  the  balance — that 

(b)  See,  as  to  this,  ante  p.  *205,  el  secj.  W.  484.     See,  also,  Wilson  v.  Lloyd,  16 

(c)  See  infra,  p.  *254,  and  Keay  v.  Eq.60;  Oakeley  v.  Pasheller,  4  CI.  & 
Fenwick,  1  C.  P.  D  745.  F.  207,  noticed  infra,  p.  *25L     Compare 

(d)  As  to  the  effect  of  taking  a  new  Commercial  Bank  Corp.  of  India  and  the 
security  when  no  new  partner  comes  in,  East,  16  W.  R.  958,  and  Ex  parte  Gib- 
see  anle  p.  *244.  son,  4  Ch.  662. 

(e)  7   Car.  &  P.  746,  and  2  Mees.  & 

410 


CHAP.  II,,  §  HI.]       SUBSTITUTION    OF    DEBTOES.  249* 

discharges  the  old  firm,  as  both  firms  cannot  be  liable  at  once  for  the  same  debt. 
This  is  the  law  as  laid  down  in  several  cases  in  which  indeed  there  is  some  con- 
tradiction.   However,  I  believe  that  what  I  have  stated  is  the  result  of  them."  (/) 

The  jury  found  for  the  defendant.  A  new  trial  was  moved  for 
on  the  ground  that  there  was  no  ev^idence  to  go  to  the  jury  to  show 
that  the  plaintiff  had  agreed  to  discharge  the  defendant  from  his 
liability,  but  the  court  (^)  thought  that  there  was  abundant  evidence 
to  show  that  the  plaintiff  knew  of  the  defendant's  retirement,  and 
a  new  trial  was  refused. 

To  this  class  of  cases  also  belong  those  already  noticed,  in  which 
the  joint  liability  of  old  and  new  partners  has  been  substituted  for 
that  of  the  old  partners  only.  (A)  50 

Release  by  estoppel. — A  creditor  may  so  conduct  himself  as  to  be 
estopped  from  saying  that  a  retired  partner  is  still  liable  to  him. 
But  it  is  not  often  that  this  can  be  established.  A  settlement  by 
partners  of  their  accounts  on  the  footing  that  one  of  them  only  is 
liable  to  a  creditor,  will  not  affect  him  unless  he  has  been  guilty 
of  some  fraud,  or  has  done  some  act  or  made  some  statement  in 
order  to  induce  the  partners,  or  one  of  them,  to  settle  their  accounts 
on  the  faith  that  one  of  them  is  no  longer  liable,  (i)  51 

Discharge  of  estate  of  deceased  partner. — Closely  allied  to  the 
subject  which  has  just  been  discussed,  is  that  which  relates  to 'the 

(/)  The  learned  judge  was  scarcely  (N.  Y.)  Pr.  319;   S.  C,   17   Hun   600. 

warranted  by  those  cases  in  going  so  far  And    see   J^tna    Ins.    Co.    v.   Peck,    28 

as  he  did.  Yt.  93. 

[g)  Bolland.  B.,  dissenlienie.  (i)  See  Davison  v.  Donaldson,  9  Q.  B. 

{h)  Ex  parte  Whitmore,  3  Deac.  365  ;  D.  623  ;  Featherstone  v.  Hunt,  1  Barn.  & 

Rolfe  V.  Flower,  L.  R.,  1  P.  C.  27,  noticed  C.  113,  a  case  of  alleged  fraud. 

ante  pp.  *208,  *209.  51.  Release  by  estoppel. —Where  the 

50.   What    will     discharge    retired  creditors  of   a  commercial   partnership 

partner. — Where    one    partner    retires  make   settlement   with   the   liquidating 

and  the  others  assume  the  debts  of  the  partner  after  dissolution,  and  take   his 

old  firm,  the  retiring   partner  becomes  separate  notes  in  full  settlement  of  their 

merely  a  surety  in  respect  to  such  debts,  claim,  and  it  appears  that  they  were  at 

and  where  the  creditors  extend  the  time  the  time  aware  that  the  liquidating  part- 

of  payment  in  such  a  case,  with  knowl-  ner  had  assumed  all  the  liabilities  of  the 

edge  of  all   the  facts,  and  without  the  partnership,  the  retiring  partner  will  not 

consent  of  the  retiring  partner,  this  will  afterwards  be  held  responsible.     Hoopes 

discharge  him  from  liability  as  respects  v.  McCan,  19  La.  Ann.  201. 
such  debts.     Dodd  i'.  Dreyfus,  57  How. 

411 


249*  TERMINATION    OF    LIABILITY.  [hoDK    II., 

discharge  of  the  estate  of  a  deceased  partner  from  the  liabilities  to 
which  he  was  subject  as  a  partner  at  the  time  of  his  death.  The 
position  of  the  estate  of  a  deceased  partner,  with  reference  to  the 
question  of  discharge  by  reason  of  a  creditor's  dealings  with  the 
surviving  *partners,  is  very  similar  to  the  position  of  a 
-•  retired  partner.  The  same  ])rinciples  are  applicable  to 
both,  and  the  authorities  v/hich  are  in  point  as  regards  the  one  are 
so  also  as  regards  the  other.  The  parallel  between  the  two  would 
be  complete  were  it  not  that  before  the  Judicature  acts  the  estate 
of  a  partner  who  died  in  the  lifetime  of  his  copartners  was  liable 
for  the  joint  debts  of  the  firm  in  equity  only,  (Z;)  and  there  might 
have  been  circumstances  to  induce  a  court  of  equity  to  hold  that 
estate  discharged,  although  the  same  circumstances  would  not,  in 
the  case  of  a  retiring  partner,  have  operated  as  a  discharge  at 
law,  (l)  and  viae  versa,  (m) 

It  has  been  decided  in  equity  that  if  a  creditor  of  a  firm  knows 
of  the  death  of  one  of  the  firm  and  continues  to  deal  as  before  with 
the  survivors,  he  does  not  lose  the  remedy  which  he  had  against  the 
estate  of  the  deceased  partner  unless  there  is  evidence  showing  an 
intention  to  abandon  the  right  of  having  recourse  thereto  for  pay- 
ment ;  (n)  and  an  attempt  by  the  creditor  to  obtain  payment  from 
the  survivors  is  not  sufficient  evidence  of  such  an  intention.  Thus, 
■  if  he  sues  the  survivors  and  obtains  judgment  against  them,  this 
will  not  necessarily  deprive  him  of  his  right  to  obtain  payment  out 
of  the  estate  of  the  deceased,  (o)  So,  proving  in  bankruptcy  against 
the  estate  of  the  new  firm  is  not,  per  se,  sufficient  to  preclude  the 
creditor  from  afterwards  having  recourse  to  the  assets  of  the  dead 
partner,  (p)  Still  less  will  any  dealing  with  the  surviving  partner 
if  induced  by  his  fraud,  (q)  52 

(k)  As  to  the  nature  of  this  liability,  (o)  Jacomb   v.   Harwood,   2  Ves.  Sr. 

see  ante  p.  *194.  265  ;  and  cmte  p.  *195,  and  infra,  p.  *257. 

(/)  See  Ex  parte  Kendall,  17  Ves.  522,  ( p)  Sleech's  Case,  1  Mer.  570 ;  Harris 

525.  V.  Farwell,  15  Beav.  31.     But  compare 

(m)  Jacomb  t).  Harwood,  2  Ves.  Sr.  265.  Brown  v.  Gordon,  16  Beav.  302,  and  Bil- 

(n)  Winter  v.  Innes,  4  Myl.  &  C.  101,  borough  v.  Holmes,  5  Ch.  D.  255,  infra 

and  see  Devaynes  v.  Noble,  Sleech's  case,  note  (s). 

1   Mer.  539;    Clayton's   Case,   Id.  579;  (q)  As  in  Plumer  ti.  Gregory,  18  Eq. 

Palmer's  Case,  Id.  623 ;  Brailhwaite  v.  621. 

Britain,  1  Keen  206.  52.  Di-scharge  of  estate  of  deceased 

412 


CHAP.  II.,  §  III.]    ESTATE    OF    DECEASED    PARTNER. 


[*251 


Liability  not  discharged  by  dealing  with  new  persom. — Even  where 
a  new  partner  has  been  introduced,  a  creditor  of  the  old  firm  Mho 
continues  to  deal  with  the  new  firm  as  he  dealt  with  the  old,  and  is 
paid  interest  by  the  new  firm  *as  if  the  debt  was  its  own, 
does  not  thereby  deprive  himself  of  his  right  to  be  paid 
out  of  the  estate  of  a  deceased  member  of  the  old  firm,  (r)  In 
Harris  v.  Farwell  (.s)  a  banking  firm  consisting  of  three  partners 
became  indebted  to  a  customer  on  a  deposit  note  ;  one  of  them  died, 
and  the  survivors  took  his  son  into  partnership  with  them.  The 
new  partnership  paid  interest  on  the  note  for  some  time  and  then 
became  bankrupt.  The  plaintiff  proved  against  the  new  firm  for 
the  amount  of  his  debt,  and  was  paid  a  dividend  out  of  its  estate. 
It  was  held  that  he  had  done  nothing  which  precluded  him  from 
having  recourse  to  the  estate  of  the  deceased  partner.  53 


partner. — Where  one  of  two  partners 
dies,  and  judgment  is  recovered  against 
the  surviving  partner  for  a  partnership 
debt,  and  he  becomes  a  bankrupt  before 
the  judgment  is  satisfied,  the  executors 
of  the  other  may  be  compelled  in  chan- 
cery to  make  satisfaction.  Storer  v. 
Hinkley,  Kirby  (Conn.)  147. 

The  efiects  of  a  deceased  partner  can- 
not be  pursued,  in  law  or  equity,  while 
the  surviving  partner  is  solvent.  Alsop 
V.  Mather,  8  Conn.  584. 

The  partners  who  continue  the  busi- 
ness cannot  bind  the  estate  of  the  de- 
ceased partner  by  notes  given  in  the 
firm  name  for  debts  due  before  his 
death,  to  creditors  notified  of  the  disso- 
lution. Citizens'  Mutual  Ins.  Co.  v, 
Ligon,  59  Miss.  305. 

When  a  firm  creditor  compromises 
with  and  releases  the  surviving  partner, 
this  violates  the  rights  of  the  personal 
representatives  of  the  deceased  partner, 
and  releases  them  from  their  liabilities 
as  sureties,  although  by  its  terms  the  re- 
lease purports  to  discharge  only  the  per- 
sonal liability  of  the  surviving  partner. 
Murry  r.  Fox,  39  Hun  (N.  Y.)  108. 

41 


Tlie  estate  of  the  deceased  partner 
cannot  be  oliarged  with  any  part  of  the 
losses  which  may  result  from  the  carry- 
ing on  of  new  business,  after  his  death^ 
by  the  surviving  partners.  Tompkins  v. 
Tompkins,  18  So.  Car.  1. 

(r)  Daniel  v.  Cross,  3  Ves.  277. 

(s)  15  Beav.  31.  It  does  not  appear 
from  the  report  when  the  customer  first 
knew  of  the  change  in  the  firm.  Com- 
pare Bilborough  v.  Holmes,  5  Ch.  D.  255, 
a  somewhat  similar  case,  where  the  estate 
of  the  deceased  partner  was  held  to  be 
discharged.  The  proof,  however,  there, 
was  for  money  lent  to  the  new  firm. 

53.  Liability  not  discharged  by- 
dealing  with  new  firm. — The  fact  that 
a  creditor  of  a  firm,  one  partner  in  which 
has  died,  looked  to  the  survivors  for  pay- 
ment of  his  debt  and  took  interest  from 
them  thereon,  will  not  relieve  the  estate 
of  the  deceased  partner  from  liability. 
If  the  administrator  claims  that  there 
was  an  agreement  to  accept  the  liability 
of  the  surviving  partners  constituting 
the  new  firm,  such  agreement  must  be 
clearly  proved.  Fogarty  v.  Cullen,  49 
N.  Y.  Super.  Ct.  397. 

3 


251*  TKRMIXATION    OF    LIABILITY.  [bOOK    II., 

Effect  of  adininistenng  the  estate. — On  the  other  hand,  if,  after 
the  death  of  a  partner,  a  creditor  of  the  old  firm  knows  of  the 
death  and  does  not  take  any  steps  to  obtain  payment  from  the  estate 
of  the  deceased,  if  the  creditor  lies  by  and  allows  that  estate  to  be 
administered  as  if  he  had  no  claim  upon  it,  and  if  he  continues  to 
deal  with  the  surviving  partners  as  if  they  and  they  alone  were  his 
debtors,  in  that  case  the  creditor  will  not  be  allowed  to  resort  to  the 
assets  of  the  deceased.  Oakeley  v.  Pasheller  and  Brown  v.  Gordon 
may  be  referred  to  as  illustrating  this  jioctrine. 

In  Oakeley  v.  Pasheller  (^)  two  partners,  A  and  B,  executed  three 
joint  and  several  bonds  to  the  plaintiff  to  secure  repayment  of 
money  lent.  A  died,  and  B  took  in  C  as  a  partner  with  him.  An 
agreement  was  come  to  between  A's  executors  and  B  &  C  that  the 
latter  should  take  the  assets  and  liabilities  of  the  old  firm  and  in- 
demnify A's  estate  from  those  liabilities.  Of  this  the  plaintiff  had 
notice,  (w)  He  was  paid  interest  on  his  bond  by  the  new  firm  and 
received  accounts  from  it  in  which  the. old  debt  and  the  debts  con- 
tracted by  the  new  firm  were  blended  together.  On  two  occasions 
the  plaintiff' *  had  agreed  to  give,  and  had  given,  the  new 
-"  firm  considerable  further  time  to  pay  the  bonds,  but  A's 
executors  had  no  notice  of  this.  Ultimately  the  plaintiff  took  from 
B  &  C  an  assignment  of  some  policies  as  a  collateral  security  for 
payment  of  the  bonds,  expressly  reserving  his  rights  against  A's 
estate.  It  was,  however,  held  that  A's  estate  had  been  discharged 
from  its  liability  from  what  had  previously  taken  place.  The  court 
thought  that  A's  estate  had  become,  as  it  were,  surety  only  for  pay- 
ment of  the  debt,  and  that  it  had  been  discharged  by  the  long 
indulgence  granted  by  the  plaintiff  to  the  other  debtors,  (x)     The 

A  partnership  creditor,  after  the  death  207.     See,  on  it,  Swire  v.  Redman,  1  Q. 

of  one  partner,  may  continue  to  deal  with  B.  D.  543.     In  Wilson  «.  Lloyd,  16  Eq. 

the  survivor,  and   receive   partial   pay-  60,   this  case  was  followed,   tliougii  no 

ments  from  him  without  prejudice  to  his  new  partner  joined  the  firm,  but  Wilson 

right  to  resort  to  the  assets  of  the  de-  v.    Lloyd    cannot   be  relied  upon.     See 

ceased  partner ;  and  he  does  not  lose  this  Simpson  v.  Henning,  L.  E.,  10  Q.  B.  406. 

right  by  delay  in  calling  upon  the  sur-  (m)  See  4  CI.  &F.  212.    The  marginal 

vivor  for  payment.     Hamersley  v.  Lam-  note  states  that  he  had  not. 

bert,  2  Johns.  (N.  Y.)  Ch.  508.  (x)  This  qwasi  suretyship  is  surely  a 

(0  10  Bli.  (N.  S.)  548,  and  4  CI.  &  F.  false  analogy,  unless  the   creditor   has 

414 


CHAP.  II.,  §  III.]    ESTATE    OF    DECEASED    PARTNER.  252* 

true  ratio  deGldendi,  however,  was  that  the  plaintiff  had  accepted  B 
<fe  C  as  his  sole  debtors. 

In  Brown  v.  Gordon  (y)  the  plaintiff  deposited  money  with  a 
banking  firm  consisting  of  three  partners.  A,  B  and  C ;  D  after- 
wards became  a  partner.  A  died,  having  made  a  will  containing  a 
trust  for  payment  of  his  debts.  After  A's  death,  his  son,  who  was 
also  his  executor  and  residuary  devisee  and  legatee,  became  a  part- 
ner in  the  bank.  Some  time  afterwards  B  and  C  died.  The  bank 
had  been  continued,  first  by  B,  C,  D  and  A's  son ;  then  by  D,  C 
and  A's  son,  and  lastly  by  D  and  A's  son;  but  it  ultimately 
stopped  payment,  and  the  two  surviving  partners  were  adjudged 
bankrupts.  Interest  had  been  paid  to  the  plaintiff  by  the  successive 
firms,  and  the  plaintiff's  debt  was  proved  in  the  Bankruptcy  Court. 
On  a  bill  filed  for  the  purpose  of  obtaining  payment  out  of  A's 
estate,  it  was  held  that  the  plaintiff,  by  neglecting  for  sixteen  years 
to  make  any  claim  against  the  assets  of  the  deceased,  and  by  treat- 
ing the  successive  firms  as  his  debtor^,  had  discharged  the  estate  of 
the  deceased,  and  that  he  could  not  be  considered  as  a  creditor  of 
the  deceased  so  as  to  avail  himself  of  the  trust  in  the  will  for  pay- 
ment of  debts.  54 

Cases  of  fraud. — In  whatever  way  a  creditor  may  have  dealt 
with  the  surviving  *partners,  he  cannot  be  held  to  have  r^^f)':? 
adopted  them  as  his  sole  debtors  in  respect  of  a  demand  ^ 
arising  out  of  a  fraudulent  transaction,  of  which  he  has  been  con- 
stantly kept  in  ignorance.  (2) 

assented  to  such  a  change  in  his  debtor's  v.  Fraser,  4  Den.  (N.  Y.)  212.     But  see 

position.     See,  on  fhis  point,  Oakford  v.  Weise  v.  Moore,  22  Mo.  App.  530. 

European,  &c.,  Ship  Co.,  1  Hem.  &  M.  The  act  of  an  executor  of  a  deceased 

182,  ante  p.  *244 ;  Swire  v.  Eedraan,  1  Q.  partner  in  allowing  his  interest  to  re- 

B.  D.  537.     See,  also,  Eodgers  v.  Maw,  4  main  in  the  firm,  will  not  render  the 

Dowl.  &  L.  66.  estate  liable  for  debts  contracted  after 

(y)    16    Beav.     302;     Bilborough    v.  his  death  ;  but  an  executor  who  actually 

Holmes,  5  Ch.  D.  255,  a  similar  case,  enters  into  the  conducting  of  the  busi- 

but  not  so  strong.     See  ante  note  (s).  ness  without  authority,  in  order  to  benefit 

54.    Effect    of     administering     the  the  estate,  is  personally  liable.     Citizens' 

estate. — The    administrator   of   a    de-  Mat.  Ins.  Co.  v.  Ligon,  59  Miss.  305. 

ceased  partner  has  no  right  to  interfere  See,  also,  Brasfield  v.  French,  Id.  632. 

with  the  surviving  partner  in  the  settle-  (z)  See  Clayton's  Case,  1   Mer.  579; 

ment  of  the  partnership  estate.     Camp  ante  pp.  *235,  *236. 

415 


253*  TERMINATIOX    OF    LIABILITY.  [bOOK    IL, 

Recapitulation. — Before  leaving  this  subject,  it  may  be  useful 
shortly  to  review  the  effect  of  the  numerous  cases  which  have  been 
noticed  in  the  preceding  pages.     Those  cases  establish  that : 

1.  An  express  agreement  by  the  creditor  to  discharge  a  retired 
partner  and  to  look  only  to  a  continuing  partner  is  not  inoperative 
for  want  of  consideration;  for  Lodge  v.  Dicas(a)  has,  as  to  this 
point,  been  overruled  by  Thompson  v.  Percival.  (6) 

2.  An  adoption  by  the  creditor  of  the  new  firm  as  his  debtor 
does  not  by  any  means  necessarily  deprive  him  of  his  rights  against 
the  old  firm  either  at  law  (c)  or  in  equity,  [d) 

3.  And  it  will  certainly  not  do  so  if,  by  expressly  reserving  his 
rights  against  the  old  firm,  he  shows  that  by  adopting  the  new  firm 
he  did  not  intend  to  discharge  the  old  firm,  (e) 

4.  And  by  adopting  a  new  firm  as  his  debtor,  a  creditor  cannot 
be  regarded  as  having  intentionally  discharged  a  person  who  was  a 
member  of  the  old  firm,  but  was  not  known  to  the  creditor  so  to 
be.(/) 

5.  But  the  fact  that  a  creditor  has  taken  from  a  continuing  part- 
ner a  new  security  for  a  debt  due  from  him  and  a  retired  partner 
jointly,  is  strong  evidence  of  an  intention  to  look  only  to  the  con- 
tinuing partner  for  payment,  {g) 

6.  And  a  creditor  who  assents  to  a  transfer  of  his  debt  from  an 
old  firm  to  a  new  firm  and  goes  on  dealing  with  the  latter  for  many 

^(y-Al  y^^^'Sj  making  no  demand  for  payment  against   the  *old 

-'  firm,  may  not  unfairly  be  inferred  to  have  discharged  the 

old  firm.     If  a  jury  finds  that  he  has  done  so,  the  court  will  not 

disturb  the  verdict ;  [K)  and  if  the  question  arises  before  a  judge, 

(a)  3B.  &A.  611.  Palmer's  Case,  Id.  623;  Braithwaite  v. 

(6)  5  B.  &  Ad.  925.  Britain,  1  Keen  206  ;  Winter  v.  Innes,  4 

(c)  David   v.    Ellice,   5    Barn.   &   C.  Myl.  &  C.  101. 

196 ;  Thompson  v.  Percival,  5  B.  &  Ad.  \e)  Bedford  v.  Deakin,  2  B.  &  A.  210 ; 

925  ;  Heath  v.  Percival,  1  P.  Wms.  682,  Jacorab  v.  Harw.ood,  2  Ves.  Sr.  265. 

and  1  Str.  403;   Kirwan  v.  Kirwan,  2  (/)  Robinson   v.  Wilkinson,  3  Price 

Cromp.  &  M.  617  ;  Gough  v.  Da  vies,  4  538. 

Price  200 ;  Blew  v.  Wyatt,  5  Car.  &  P.  [g)  Evans  v.  Drummond,  4  Esp,  89 ; 

397.  Reed  v.  White,  5  Id.  122. 

{d)  Oakford    v.  European,  &c.,  Ship  {h)  Hart  v.  Alexander,  2  Mees.  &  W. 

Co.,  1  Hem.  &  M.  182 ;  Sleech's  Case,  484. 
1  Mer.  539;    Clayton's  Case,  Id.  579; 

416 


CHAP.  II.,  §  III.J    DISCHARGE    OF    RETIRED    PARTNER.  254* 

e.  g.,  in  bankruptcy  or  in  the  administration  of  the  estate  of  a 
deceased  partner,  the  court  will  consider  all  the  circumstances  of  the 
case,  and  will  infer  a  discharge  if,  upon  the  whole,  justice  to  all 
parties  so  requires.  {%)  But  the  small  number  of  cases  in  which 
relief  has  been  refused,  compared  with  those  in  which  it  has  been 
granted,  shows  that  the  leaning  of  the  court  is  strongly  in  favor  of 
the  creditor. 

(b)   Of  the  effect  of  merger  and  judgment  recovered. 

Merger  of  one  security  in  another. — Having  now  examined  the 
mode  in  which  a  partner  may  be  discharged  from  liability,  by  rea- 
son of  a  substitution  of  some  other  person  in  his  place  with  the 
creditor's  assent,  it  is  necessary  to  advert  to  a  doctrine  by  which  a 
partner  occasionally  finds  himself  discharged,  simply  because  his 
creditor  has  obtained  a  security  of  a  higher  nature  than  that  which 
he  previously  possessed. 

Bills,  &c.,  create  no  merger. — If  a  person  solely  indebted  enters 
into  partnership  with  another,  and  the  two  give  a  joint  note  or  bill 
for  the  debt  of  the  first,  and  the  note  or  bill  is  not  paid,  the  credi- 
tor is  not  precluded  from  demanding  payment  from  his  original 
debtor,  (^)  unless  it  can  be  shown  that  the  bill  or  note  was  taken 
in  satisfaction  of  the  original  demand.  {I)  So,  if  two  partners  are 
indebted  on  the  partnership  account,  and  one  of  them  gives  a  bill 
or  note  for  the  debt,  and  that  bill  or  note  is  dishonored,  the  credi- 
tor who  took  it  wull  not  be  precluded  from  having  recourse  to  both 
partners  for  payment,  (m)  unless  it  can  be  *shown  that  he 
intended  to  substitute  the  liability  of  the  one  for  the  joint  ^ 
liability  of  the  two.  {n) 

(i)  Ex  parte   Kendall,  17  Ves.  522,  365;  Ex  parte  Kirby,   Buck  511;    Ex 

525;  Oakeley  v.  Pasheller,  4  CI.  &  F.  parte  Jackson,  2  Mont.,  D.  &  D.  146. 

207;  Wilson  v.  Lloyd,  16  Eq.  60;  Brown  (m)  Keay  v.  Fenwick,  1  C.  P.  D.  745  ; 

V.  Gordon,  16  Beav.  302.  Bottomley  v.  Nuttall,  5  C.  B.  (N.  S.) 

(k)   Ex  parte  Seddon,  2  Cox  49;  Ex  122;  Whitwell  v.  Perrin,  4  C.  B.  (N.  S.) 

parte  Lobb,  7  Ves.  592  ;  Ex  parte  Mei-  412 ;  Ex  parte  Hodgkinson,  19  Ves.  291. 

nertzhagen,  3  Deac.  101 ;  Ex  parte  Hay,  See,  too.  Ex  parte  Kaleigh,  3  Mont.  & 

15  Ves.  4 ;  Ex  parte  Kedie,  2  Deac.  &  A.  670 ;  Bedford  v.  Deakin,  2  B.  &  A. 

C.  321.  210,  noticed  ante  p.  *244. 

(/)  As  in  Ex  parte  Whitmore,  3  Deac.  (n)  As  the  jury  found  was  the  case  in 

417  27 


255* 


TERMINATION    OF    LIABILITY. 


[book  II., 


Securities  of  a  higher  nature  do. — But  when  a  creditor  obtains 
from  his  debtor  a  security  of  a  liigher  nature  than  he  liad  before, 
and  does  not  take  care  to  accept  it  as  a  collateral  security,  (o)  the 
original  debt  is  merged  in  the  higher  security,  and  can  no  longer 
be  made  the  foundation  of  an  action,  or  of  proof  in  bankruptcy,  (p) 
and  this  doctrine  is  as  much  applicable  to  joint  as  to  several  obli- 
gations. And  there  is  no  mean  authority  for  saying  that  if  two 
parties  are  jointly  indebted  by  simple  contract,  and  one  of  them 
o-ives  his  bond  for  payment  of  the  debt,  the  joint  debt  is  at  an 
end; (5)  but  there  are  recent  decisions  to  the  contrary, (?^)  and  the 
question  cannot  be  considered  as  yet  settled.55 

EvansD.  Drnmmond,4Esp.  89,  and  Reed  be  had  thereon  against  the  firm.  The 
V.  White,  5  Id.  122.  Compare  tlie  cases  partnership  debt,  whicli  was  extinguished 
in  the  last  note.  by  the  acceptance  of  the  single  bill,  is 

(0)  As  in  Ex  parte  Hughes,  4  Ch.  D.  thereby  revived.  Davidson  v.  Kelly,  1 
34,  note.  Md.  492. 

(p)  Ex  parte  Oriental  Financial  Cor-  The  execution  of  a  sealed  note  for  a 
poration,  4  Ch.  D.  33 ;  Higgen's  Case,  6  debt  due  by  partners,  by  one  of  them,  in 
Co.  44  b;  Owen  ?;.  Homan,  3  Macn.  &  the  firm  name,  without  authority,  does 
G.  378;  Price  v.  Moulton,  10  C.  B.  561 ;  not  merge  the  joint  liability  on  thesim- 
Shack  V.  Anthony,  1  Mau.  &  S.  573.  A  pie  contract.  Brozee  v.  Poyntz,  3  B. 
judgment  on  a  covenant  in  a  mortgage  Mon.  (Ky.)  178;  Calk  v.  Orear,  2  Id. 
does  not  affect  the  right  of  the  mort-  420;  Horton  v.  Child,  4  Dev.  (N.  C.)  L. 
gagee  to  foreclose.     Popple  v.  Sylvester,    460. 

22  Ch.  D.  98  ;  Ex  parte  Fe wings,  25  Ch.  A  creditor  who  sues  the  individual 
D.  338.  members  of  a  dissolved  firm,  for  goods 

(9)  Basset  v.  Wood,  11  Via.  Ab.,  sold  to  the  firm,  founding  his  action  both 
"  Exting."  B,  8 ;  and  see  Owen  v.  Ho-  on  an  itemized  account  of  the  goods 
man,  3  Macn.  &  G.  407 ;  Ex  parte  sold,  and  also  on  a  firm  note  given  in 
Hernaman,  12  Jur.  642,  and  17  L.  J.  payment  therefor  by  one  partner  with- 
Bk.  17.  out  authority  to  sign  for  the  firm,  may 

(r)  Sharpe  v.  Gibbs,  16  C.  B.  (N.  8.)  recover  on  the  original  claim  for  goods 
527;  Ansell  v.  Baker,  15  Q  B.  20;  and  sold  and  delivered.  Dodd  v.  Bishop,  30 
infra,  note  (c).  La.  Ann.  1178. 

55.  Merger  of  debt  in  security  of  The  joint  and  several  note  of  a  part- 
higher  grade. — The  acceptance  of  a  nership  is  not  extinguished  by  a  transfer 
security  of  a  higher  dignity  mei:ges  and  thereof  to  another  firm  composed  in 
extinguishes  the  original  cause  of  action ;  part  of  the  same  persons  ;  and  the  latter 
yet  if  one  partner,  who  has  executed  in  firm  may  negotiate  the  note  to  third 
the  name  of  the  firm  a  single  bill  for  persons.  Fulton  v.  Williams,  11  Cush. 
the  amount  of  a  debt  which  the  firm    (Mass.)  108. 

owes,  afterwards  gives  a  promissory  note  A  partnership  assigned  the  partner- 
in  the  name  of  the  firm,  a  recovery  may    ship  effects  for  the  benefit  of  such  cretl- 

418 


CHAP.  II.,  §  III.]  MERGER  OF  SECURITIES. 


255* 


Judgment  recovered. — If  a  joint  creditor  obtains  judgment  against 
one  of  the  partners  only,  he  loses  his  remedy  against  the  others,  ev^en 
if  not  known  to  him.(.s)  But  this  rule  does  not  apply  when  the 
other  partners  are  abroad,  and  cannot  therefore  be  sued  here  with 
effect. (^)  If  one  partner  only  is  sued,  and  judgment  is  given  for 
him,  the  creditor  is  not  precluded  from  afterwards  suing  the  others, 
unless  the  first  action  failed  for  a  reason  which  applies  equally  to 
the  second,  (u) 

It  has  been  already  seen  that  a  judgment  recovered  against  con- 
tinuing partners  and  an  incoming  partner  is  a  defence  to  an 
-'  *action  against  a  retired  partner  who  might  have  been  sued 
with  the  continuing  partners  in  the  first  instance,  (a;) 56 


itors  as  should  sign  the  deed  of  assign- 
ment, and  receive  their  dividends;  and, 
in  consideration  thereof,  and  that  they 
would  release  the  other  partners,  the 
senior  partner  covenanted  to  pay  the 
balance  due  such  creditors  after  ex- 
hausting the  property  assigned.  Held, 
that  the  prior  claims  of  the  creditors 
who  became  parties  to  the  agreement 
were  extinguished,  and  merged  in  the 
covenant  of  the  senior  partner.  Hosack 
V.  Sogers,  8  Paige  (N.  Y.)  229. 

A  promissory  note  given  by  a  firm  is 
not  merged  in  a  bond  and  mortgage,  ex- 
ecuted at  the  same  time  and  for  tlie  same 
debt,  by  one  partner  in  the  name  of  the 
firm,  but  without  the  knowledge  of  his 
copartners.  Pierce  v.  Cameron,  7  Rich. 
(S.  C.)  114. 

The  mere  acceptance  of  a  bond  and  a 
deed  of  trust  to  secure  it,  by  a  creditor, 
from  one  member  of  the  firm  after  dis- 
solution, for  a  partnership  debt  due  by 
simple  contract,  destroys  the  right  of 
the  creditor  to  proceed  at  law  against 
the  other  member ;  but  a  court  of  equity 
will  look  at  the  attendant  circumstances 
of  the  case,  and  will  not  absolve  the 
firm  from  liability  unless  it  appears 
from  those  circumstances,  or  otherwise. 


that  the  higher  security  was  accepted  as 
a  substitute  for  the  simple  contract  of 
the  firm.  Niday  v.  Harvey,  9  Gratt. 
(Va.)  454. 

(s)  Kendall  v.  Hamilton,  4  App.  Cas. 
504  ;  King  v.  Hoare,  13  Mees.  &W.  494 ; 
Ex  parte  Higgins,  3  De  G.  &  J.  33. 
See,  as  to  dormant  partners,  Cambefort 
V.  Chapman,  19  Q.  B.  D.  229,  noticed  in 
the  addenda.  In  Baddeley  v.  Consoli- 
dated Bank,  34  Ch.  D.  536,  the  surety 
had  not  recovei-ed  Judgment,  and  this 
rule  did  not  apply.  A  colonial  judg- 
ment creates  no  merger.  Bank  of  Aus- 
tralasia V.  Nias,  16  Q.  B.  717. 

(0  See  19  and  20  Vict.,  c.  97,  I  11; 
Ex  parte  Waterfall,  4  De  G.  &  S.  199. 

(w)  Phillips  V.  Ward,  2  Hurlst.  &  C. 
717. 

{x)  Scarfe  v.  Jardine,  7  App.  Cas. 
345,  ante  pp.  *46  and  *197.  See,  also, 
Cambefort  v.  Chapman,  19  Q.  B.  D.  229, 
noticed  in  the  addenda. 

56.  Judgment  recovered,  when  a 
merger. — When  a  judgment  is  obtained 
against  one  of  two  partners  on  a  joint 
contract,  the  contract  is  merged  in  the 
judgment;  and  an  action  at  law  cannot 
be  maintained  thereon  against  the  part- 
ners.   Sedan  v.  Williams,  4    McLean 


419 


256* 


TERMINATION   OF   LIABILITY. 


[book  II., 


Merger  of  joint  and  several  obligations. — With  respect  to  obliga- 
tions which  are  joint  as  well  as  several,  there  is  more  tlifficulty 
A  joint  and  several  obligation,  arising  ex  delicto,  is  extinguished  by 

(U.  S.)  51  ;    Smith  v.  Black,  9  Serg.  &  with  a  third  person  in  making  a  note  to 

K.  (Pa.)  142.  CW<ra, Williams  V.  Rogers,  a  creditor  of  the  firm,  for  a  partnersiiip 

14  Bush  (Ky.)  777.  debt,  which,  by  agreement,  is  made  and 

The  ostensible  partner  of  a  firm  gave  accepted,  not  for  the  debt,  but  as  collat- 
notes  in  the  partnership  name,  which  eralsecurity  merely,  a  judgment  upon  the 
was  his  own  name,  for  goods  purchased  note  will  not  merge  or  affect  the  original 
for  the  use  of  the  partnership,  upon  indebtedness,  even  as  to  the  partner  sign- 
which  the  payee,  in  ignorance  of  the  ing  the  note.  In  such  a  case,  the  agree- 
partnership,  sued  and  recovered  judg-  ment  prevents  the  merger.  Hawks  v. 
ment  against  the  ostensible  partner  Hinchclifl^,  17  Barb.  (N.  Y.)  492. 
alone.  Held,  in  an  action  afterwards  A  judgment  recovered  in  Missouri, 
brought  against  the  dormant  partner,  where  by  the  law  all  contracts  are  con- 
that  his  liability  upon  the  notes  was  ex-  strued  as  joint  and  several,  against  one 
tinguished  by  the  judgment.  Moale  v.  of  three  copartners  who  had  drawn  bills 
Hollins,  11  Gill  &  J.  (Md.)  11.  upon  the  plaintiff's,  which  were  accepted 

A  bill  against  dormant  partners,  af-  in  this  state,  and  paid  for  accommoda- 
ter  judgment  recovered  against  the  os-  tion,  without  funds,  is  not  a  merger  of 
tensible  partners,  cannot  be  sustained,  the  right  of  action  against  the  other 
without  showing  special  cause  for  relief;  partners  in  this  state.  Reed  v.  Girty, 
as  that  the  plaintiff"  was  kept  in  igno-  6  Bosw.  (N.  Y.)  567. 
ranee  of  the  partnership  by  undue  Relief  in  equity  against  merger  by- 
means ;  that  he  has  used  due  diligence  judgment. — The  fact  that  a  judgment 
to  inform  himself,  &c.  Penny  v.  Mar-  was  rendered  against  part  of  the  mem- 
tin,  4  Johns.  (N.  Y.)  Ch.  566.  bers  of  a  firm  does  not  affect  the  equita- 

When  not  a  merger. — Where  a  state  ble  right  to  have  the  partnership  prop- 
statute  provides  that  in  suits  against  two  erty  subjected  to  its  payment.  Equity 
or  more  jointly  indebted,  the  judgment  does  not  regard  the  form  of  the  judg- 
shall  be  evidence,  as  against  those  not  ment,  but  the  substance  of  the  debt, 
served  with  process,  only  of  the  extent  Martin  v.  Davis,  21  Iowa  535. 
of  the  plaintiff''s  demand,  the  original  Where  a  partnership  exists  between 
demand  against  the  parties  not  brought  two  persons,  one  of  whom  is  a  dormant 
into  court  is  not  merged  in  the  judgment  partner,  and  thecreditorsof  the  firm  have 
against  (hose  who  were  (overruling  6  obtained  judgments  against  the  ostensi- 
Cranch  (U.  S.)  253).  Mason  v.  Eldred,  ble  partner,  foimded  on  debts  created  oa 
6  Wall.  (U.  S.)  231.  the   partnership    account,    upon    which 

Judgment  against  one  partner  upon  a  executions  have  been  issued  and  returned 

contract,  upon  its  face  his  sole  and  in-  nulla  bona,  a  bill  in  equity  against  both 

dividual  contract,  is  no  bar  to  a  subse-  partners   will   be    sustained,   upon   the 

quent  action  upon  it  as  a  partnership  allegation  that  the  dormant  partner  has, 

contract.     Scott   v.   Colmesnil,  7    J.  J.  by  fraudulent  connivance   with   the  os- 

Marsh.  (Ky.)  416.  tensible  one,  obtained  the  possession  of 

Where  one  of  several  partners  unites  and    laid   claim  to  all  the   partnership 

420 


€HAP.  11,,  §  III.J  MERGER   OF  SECURITIES.  256* 

a  judgment  recovered  against  any  one  of  the  persons  obliged ;(?/) 
but  as  regards  joint  and  several  obligations  arising  ex  contractu, 
although  a  joint  judgment  against  all  the  persons  obliged  extin- 
guishes the  separate  liability  of  each,  for  nemo  debet  bis  vexari  pro 
eadem  causa,  yet  a  judgment  obtained  against  one  of  them  only 
does  not  extinguish  the  separate  liability  of  the  others,  (z)  In 
order  that  this  effect  may  be  produced,  the  judgment  must  be 
satisfied,  (a)  As  regards  joint  and  several  liabilities  arising  from 
breaches  of  trust,  a  joint  judgment  does  not  preclude  proof  in 
bankruptcy  against  the  separate  estates  of  the  judgment  debtors. (6) 

Further,  if  several  persons  are  jointly  liable,  and  one  of  them 
afterwards  gives  a  separate  collateral  security  on  which  judgment  is 
recovered  against  him,  this  will  not  merge  the  prior  joint  liability,  (c) 

Effect  of  doctrines  of  merger  on  securities  for  future  advances. — 
The  rule  that  a  bond  or  judgment  merges  any  simple  contract  debt 
in  respect  of  which  it  may  have  been  given  or  obtained,  only  applies 
if  the  simple  contract  debt  existed  first  in  order  of  time,  and  if  the 
specialty  creditor  is  the  same  as  the  simple  contract  creditor.  So 
that  if  a  bond  is  given  or  a  judgment  is  obtained,  under  a  war- 
rant of  attorney,  as  a  security  tov  future  advances,  (d)  or  if  a  simple 
conta-act  debtor  gives  a  bond  or  ^confesses  a  judgment  to  p257 
a  trustee  for  his  creditor,  (e)  in  neither  of  these  cases  will 
there  be  any  merger. 

Estates  of  deceased  partners. — It  must  also  be  borne  in  mind 
that  as  regards  the  liability  of  the  estate  of  a  deceased  partner,  at 

assets,  in  fraud  of  the  creditors ;  the  re-  v.  Hoare,  13  Mees.  &  W.  494 ;   and  see 

lief  which  equity  will  give  is  to  subject  Drake  v.  Mitchell,  3  East  251. 

the  whole  assets  to  the  payment  of  such  (6)  Re  Davison,  13  Q.  B.  D.  50. 

debts.     How  V.  Kane,  2  Chand.  (Wis.)  (c)  Drake  v.    Mitchell,    3    East   251. 

222.  See,  too,  Re  Clarkes,  2  Jones  &  L.  212  ; 

(y)  Brinsmead  v.  Harrison,  L.  R.,  6  Ex  parte  Bate,  3  Deac.  358.     Compare 

C.  P.  584,  affirmed  7  Id.  547  ;  Brown  v.  Cambefort  v.  Chapman,  19  Q.  B.  D.  229, 

Wootton,   Cro.   Jac.   73 ;    Buckland   v.  noticed  in  the  addenda. 

Johnson,  15  C.  B.  145 ;   and  see,  as  to  (d)  Holmes  v.  Bell,  3  Man.  &  G.  213, 

the    plea   of    another    suit    depending,  and  the  note  there. 

Boyce  v.  Douglas,  1  Camp.  61.  (e)  Bell  v.  Banks,  3  Man.  &  G.  258. 

(3)  Ex  parte  Christie,  Mont.  &  B.  352.  In  such  a  case  equity  would  probably 

See,  also,  Anseil  v.  Baker,  15  Q.  B.  20.  follow  the  law,  ut  res  magis  valeat  quam 

(a)  Higgen's  Case,  6  Co.  46,  a ;   King  pereat. 

421 


257*  TERMINATION    OF    LIABILITY.  [bOOK    IL, 

law  when  a  partner  died,  his  liability  on  contracts  survived  to  his 
copartner,  who  ahjne  could  be  sued  in  respect  of  them.  Hence,  a 
judgment  recovered  against  the  surviving  members  of  a  firm  does 
not  preclude  the  judgment  creditor  from  obtaining  payment  of  his 
original  debt  from  the  estate  of  the  deceased  partner  in  equity ;  (/) 
nor  does  preof  against  his  estate  afford  a  defence  to  an  action  against 
the  surviving  partners,  (^r) 

Merger  not  an  extinction  of  the  debt. — Further,  it  is  to  be  observed 
that  merger  does  not,  properly  speaking,  extinguish  a  debt;  for,  not- 
withstanding the  fact  that  a  debt  is  merged  in  a  higher  security,  the 
merged  debt  is  sufficient  to  support  an  adjudication  of  bankruptcy 
against  the  debtor.  (A) 

Proof  in  bankruptey. — Again,  proof  in  bankruptcy  against  the 
estate  of  one  partner  in  respect  of  a  partnership  debt  does  not  pre- 
clude the  proving  creditor  from  afterwards  suing  the  solvent  part- 
ners and  recovering  from  them  what  he  may  have  failed  to  obtain 
in  the  bankruptcy.  {%) 

4.  Lapse  of  time. 

Statutes  of  limitation. — By  a  number  of  well-known  enactments, 
usually  referred  to  as  the  statutes  of  limitation,  a  certain  definite 
time  has  been  prescribed  within  which,  if  at  all,  a  person  having  a 
demand  against  another  must  enforce  it.  These  statutes  apply 
as  well  to  partners  as  to  other  persons,  and  it  becomes,  therefore, 
necessary  to  advert  to  them  in  the  present  work. 

The  principal  statutes  are  the  following:  {k)  21  Jac.  I.,  *c.  16;  4 

^       .  and  5  Anne,  c.  16 ;  3  and  4  Wm.  IV.,  c.  27 ;  3  and  4  VYm. 

-•  IV.,  c.  42;  19  and  20  Vict.,  c.  97;  37  and  38  Vict.,  c.  57. 

Times  limited  for  bringing  actions. — Neglecting  those  provisions  of 
the  statutes  of  limitations  which  are  of  little  importance  to  partners, 
the  times  prescribed  for  the  prosecution  of  actions  are  as  follows : 

(/)  Jacomb  v.   Harwood,   2  Ves.  Sr.  cases  there  cited. 

265;  Liverpool  Borough  Batik  D.Walker,  (i)  Keay  v.  Fenwick,  1  C.  P.  D.  745; 

4  De  G.  &  J.  24.     See,  also,  Kawlins  v.  Whitwell  v.  Perrin,  4  C.  B.  (N.  S.)  412; 

Wickham,  3  De  G.  &  J.  304,  ante  pp.  Bottomley  v.  Nuttall,  5  C.  B.  (N.  S.)  122. 

*195,  *250.  {k)  The  principal  act  relating  to  Ire- 

{g)  Re  Hodgson,  31  Ch.  D.  177.  land  is  16  and  17  Vict.,  c.  113.     See 

(A)  Re  Davison,  13  Q.  B.  D.  50 ;  Re  section  20. 
Griffiths,  3  De  G.,  M.  &  G.  174,  and  the 

422 


CHAP.  II.,  §  III.]         STATUTES    OF    LIMITATION.  258* 

Twelve  years  for  the  recovery  of  legacies,  of  rent,  of  money 
charged  ou  lands,  of  money  due  on  judgments,  bonds  and  mortga- 
ges, and  for  the  redemption  of  mortgages.  3  and  4  Wm.  IV.,  c  27, 
§§  28,  40 ;  3  and  4  Wm.  IV.,  c.  42  ;  37  and  38  Vict.,  c.  57. 

Six  years  for  the  reco\-ery  of  arrears  of  rent,  and  of  interest  on 
money  charged  on  land  (3  and  4  Wm.  IV.,  c.  27,  §§  41,  42);  and 
for  the  recovery  of  seamen's  wages  (4  and  5  Anne,  c.  16,  §  17);  and 
of  money  due  on  bills  of  exchange,  promissory  notes,  or  in  respect 
of  any  other  contract  which  is  not  under  seal  (21  Jac.  I.,  c.  16,  §  3) ; 
and  of  money  due  on  awards  where  the  submission  is  not  under 
seal  (3  and  4  Wm.  IV.,  c.  42,  §  3) ;  and  for  the  institution  of  actions 
or  suits  for  an  account.  21  Jac.  I.,  c.  16,  §  3,  and  19  and  20  Vict., 
c.  97,  §  9. 

Four  years  for  the  recovery  of  damages  in  respect  of  an  assault, 
battery,  or  false  imprisonment.     21  Jac.  I.,  c.  16,  §  3. 

Two  years  for  the  recovery  of  damages  for  words  of  themselves 
defamatory  (21  Jac.  I.,  c.  16,  §  3) ;  and  for  the  recovery  of  pe«al- 
ties,  damages,  or  sums  given  by  statute  to  the  party  grieved.  3  and 
4  Wm.  IV.,  c.  42. 

Further  time. — There  are  provisions  extending  these  periods  in 
favor  of  persons  who,  when  their  right  to  sue  accrues,  are  within 
the  age  of  twenty-one,  under  the  disability  of  coverture,  or  of  un- 
sound mind  ;  (/)  and  also  in  favor  of  those  whose  demands  are  against 
persons  beyond  the  seas,  (m)  But  the  absence  beyond  the  seas,  of 
one  of  several  joint  debtors  does  not  now,  as  it  did  formerly,  enlarge 
the  time  for  suing  the  others,  {n) 

^Account  between,  merchants. — By  the  statute  of  James,   r-^^p.^. 
actions  "for  such  accounts  as  concern  the  trade  of  merchan-  ■- 

(l)  21  Jac.  I.,  c.  16,  §  7;  3  and  4  Wm.  large  their  time  for  suing  under  the  old 

IV.,  c.  42,  §  4 ;  3  and  4  Wm.  IV.,  c.  27,  §  law.     Perry  v.  Jackson,  4  T.  R.  516. 
16,  &c.;    37  and  38  Vict.,   c.   57,   §   3.        (m)  4  and  5  Anne,  c.  16,  §  19,  and  3 

The  imprisonment,  or  absence   beyond  and  4  Wm.  IV.,  c.  42,  §  4. 
the  seas,  of  a  creditor  dxtea  not  now  en-        (n)   19  and  20  Vict.,  c.  97,  ^  11.     See, 

large  his  time  for  suing.      19  and  20  as  to  what  is  "beyond  the  seas,"  section 

Vict.,  c.  97,  ^  10;  Cornill  v.  Hudson,  8  12,  and  as  to  the  old  law,  Fannin  v.  An- 

El.  &  B.  429  ;  Pardo  v.  Bingham,  4  Ch.  derson,  7  Q.  B.  811 ;  Towns  v.  Mead,  16 

735.     The  absence  beyond  the  seas,  of  C.  B   123. 
one  of  several  joint  creditors  did  not  en- 

423 


259*  TERMINATION    OF    LIABILITY.  [bOOK    IL, 

dise  between  nicrcliant  and  merchant,  their  factors  or  servants/'  were 
excepted  from  limitation,  but  this  exception  no  longer  exists,  (o)  and 
actions  for  an  account,  or  for  not  accounting,  must  be  brought 
within  six  years,  {p) 

General  rules  applicable  to  the  statutes  of  limitation. — In  apply- 
ing the  statutes  of  limitation  to  any  particular  case,  it  is  important 
to  bear  in  mind  one  or  two  principles  applicable  to  them  all. 

1.  Foreign  debts. — Although  a  debt  may  have  been  contracted 
abroad,  any  person  who  attempts  to  enforce  it  in  this  country  must 
do  so  within  the  time  limited  by  the  English  statutes ;  for  it  is  by 
them,  and  not  by  the  law  of  the  place  M'here  the  debt  was  con- 
tracted, that  English  courts  are  governed  in  a  matter  of  this  descrip- 
tion, (g) 

2.  Continuous  running  of  time. — When  once  time  has  begun  to 
run,  no  subsequent  disability  or  inability  to  sue  stops  it,  (r)  except 
where  a  defendant  dies  and  there  is  no  representative  to  sue.  (s) 

3.  When  time  begins  to  I'un. — Time  begins  to  run  from  the  mo- 
ment the  right  to  sue  arises ;  [t)  but  in  a  case  of  concealed  fraud, 

from  the  moment  *when  the  person  acquiring  the  right  first 
^  becomes  aware  of  it.  (u) 

(o)  19  and  20  Vict.,  c.  97,  ^  9.  ever,  an  exception  to  this  rule,  where 

( p)  See  19  and  20  Vict.,  c.  97,  |  9,  an    action    brought    in    time    becomes 

and  21  Jac.  I.,  c.  16,  |  3.     This  branch  abated,  and  another  is  afterwards  com- 

of  the  subject  will  be  examined  more  at  menced.  See  Sturgis  v.  Darrell,  4  Hurlst. 

length  in  that  part  of  the  work  which  &  N.  622,  and  6  Id.  120.   See,  as  to  how 

treats    of    accounts    between    partners,  far  merely  landing  at  an  English  port 

The   principal   cases  on  the  exception  is  a  return,  so  as  to  make  time  begin  to 

relating  to  merchants'  accounts  are,  In-  run,  Gregory  v.  Hurrill,  5  Barn.  &  C. 

glis  V.  Haigh,  8  Mees.  &  W.  769 ;  Cot-  341,  and  1  Bing.  324. 

tarn   V.  Partridge,  4  Man.  &   G.  271 ;  (s)  Swindell  v.  Bulkeley,  18  Q.  B.  D. 

Robinson  v.  Alexander,  8  Bli.  (N.  S.)  250. 

352;    Forbes   v.   Skelton,   8   Sim.   335.  (t)  This  was  so  at  law,  even  in  cases 

See  Webber  v.  Tyvill,  2  Wms.  Saund.  of  concealed  fraud.   Tlie  Imperial  Gas 

124,  and  the  note  there.  Co.  v.  The  London  Gas  Co.,  10  Exch. 

{q)  See    The    British    Linen   Co.   v.  39;  Hunter  t'.  Gibbons,  1  Hurlst.  &  N. 

Drummond,  10  Barn.  &  C.  903;  Huber  459.     See  Bree  v.  Holbech,  Doug.  655. 

V.  Steiner,  2  Bing.  N.  C.  202.  But  see,  now,  Jud.  act  1873,  I  24;  Jud. 

(r)  See  Riiodes  v.  Smethurst,  4  Mees.  act  1875,  ^  10,  cl.  11,  and  the  cases   in 

&  W.   42,   and   6   Id.  351 ;    Goodall  v.  the  next  note. 

Skerratt,   3  Drew.   216;  Wych  v.  East  (u)  Gibbs  v.  Gould,  9  Q.  B.  D.  59; 

India  Co.,  3  P.  Wms.  309.    There  is,  how-  South  Sea  Co.  v.  Wymondseli,  3  P.  Wms. 

424 


CHAP.  II.,  §  III.]         STATUTES    OF    LIMITATION.  260* 

4.  Cases  of  trust. — The  claim  of  a  cestui  que  trust  against  his 
trustee  in  respect  of  a  breach  of  an  express  trust  is  not  barred  by- 
mere  lapse  of  time,  {x)  although  it  is  otherwise  if  the  trust  is  only 
constructive,  (y)  In  consequence  of  the  first  branch  of  this  rule,  if 
a  partner  dies,  having  made  a  will  containing  a  trust  for  payment 
of  his  debts,  his  estate  will  be  liable  to  the  demands  of  creditors  of 
the- firm  ranch  longer  than  if  there  were  no  such  trust  in  the  will,  (z) 

5.  Revival  of  debts. — After  time  has  begun  to  run,  and  even  after 
it  has  run,  a  debt  may  be  revived  by  a  written  promise  to  pay  it,  or 
by  an  acknowledgment  in  writing,  from  which  a  promise  to  pay  it 
may  be  inferred,  (a)  or  by  a  payment  on  account  of  the  principal 
or  interest  due,  (6)  from  which  a  similar  promise  may  be  implied,  (c) 

Application  of  these  rules  to  partners. — In  order  that  the  appli- 
cation of  these  general  rules  to  partners  may  be  fully  understood,  it 
becomes  necessary  to  consider  the  extent  to  which  one  partner  can 
aifect  the  other  by  acknowledging  and  promising  to  pay,  or  by  mak- 
ing payments  on  account  of  a  partnership  debt.  The  old  law  upon 
this  subject  was  materially  alteixd  by  the  Mercantile  Law  Amend- 
ment act,  *but  in  order  to  understand  its  provisions  a  short  p^^p-. 
allusion  to  the  law  as  it  previously  stood  is  necessary. 
Prior  to  the  act  in  question,  it  was  held  that — 

143 ;   Blair  v.  Bromley,  2  Ph.  354,  and  selected   for  reference :  Green  v.  Hum- 

5  Hare  542;    Petre  v.  Petre,   1  Drew,  phreys,  26  Ch.  D.  474;  Mitchell's  Claim, 

397.     The  fraud   in  Urquhart  v.  Mac-  6  Ch.  822,  a  letter  without  prejudice.; 

pherson,  3  App.  Cas.  838,  was  not  alleged  Bourdin  v.  Greenwood,  13  Eq.   281,  a 

to  have  been  concealed.  mem.  on  a  prom,  note  ;  Bush  v.  Martin, 

(x)  See  Jud.  act,  1875,  §  10,  cl.  2.  2  Hurlst.  &  C.  311,  entry  by  a  commit- 

{y)  Banner  v.  Berridge,  18  Ch.  D.  254 ;  tee  in  their  minutes  ;  letter  asking  for 

Beckford  v.  Wade,  17  Ves.  87.  an  account,  or  admitting  a  liability  to 

(z)  See  Ault  v.  Goodrich,  4  Russ.  430 ;  account.     Banner  v.  Berridge,  18  Ch.  D. 

Braithwaite   v.   Britain,    1    Keen    206 ;  254 ;  Quincey  v    Sharpe,  1    Ex.  D.  72 ; 

Brown  v.  Gordon,  16  Beav.  302.     See,  Prance  v.  Sympson,  Kay  678.     A  letter 

also.  Pare  v.  Clegg,  29  Beav.  589,  where  from  one   partner    to  another  will    not 

a  society's  property  was,  on  its  dissolu-  avail  a  creditor  whose  debt  is  mentioned 

tion,  subjected  to  a  trust  for  the  payment  and  recognized  in  it.     Re  Hindmarsh,  1 

of  its  creditors.  Drew.  &  S.  129. 

(rt)  See  Tanner  v.  Smart,  6   Barn.  &        (6)  See  Whitcomb  t>.  Whiting,  1  Sm. 

C.  603.      The  cases  upon  the  question.  Lead.  Cas.,  and  the  note  there. 
What  is  a  sufficient  acknowledgment?        (c)  See  Morgan  v.  Rowlands,  L.  R.,  7 

are   inimmerable.     The    following    are  Q.  B.  493. 

425 


261*  TERMINATION    OF    LIABILITY.  [bOOK    IL, 

1.  Admissions  by  one  partner. — An  admission  by  one  of  several 
joint  debtors  tliat  their  debt  was  still  due,  was  not  sufficient  to  take 
the  case  out  of  the  statutes  as  against  the  others,  nor  even  as  against 
the  person  making  the  admission,  unless  it  were  in  writing,  signed 
by  him.  {d}  57 

2.  Promise  by  one  partner. — An  actual  promise  by  one  of 
several  joint  debtors  that  the  debt  should  be  paid,  was  of 
no  validity  against  any  person  except  him  who  made  it,  and 
not  even  against  him  unless  it  were  in  writing  and  signed 
by  him.  (e)  58 

3.  Payment  by  one  partner. — But  as  regards  payment,  (/)  it  was 
held  that  if  one  of  several  joint  debtors  paid  any  money  on  account 
of  the  principal  or  interest  due  from  them  all,  such  payment  was 
sufficient  to  take  the  debt  out  of  the  statute,  not  only  as  against  the 
person  making  the  payment,  but  as  against  all  the  others  jointly 

[d)  9  Geo.  IV.,  c.  14,  §  1;  Hyde  v.  (S.  C.)278;  Greenleaf  v.  Quincy,  11  Me. 

Johnson,  2  Bing.  N.  C.  777 ;  Bristow  v.  11.     See,  also,  Carroll    v.  Gayarr^,    15 

Maxwell,  11  Ir.  Law  Rep.  461.     It  was  La.  Ann.  671. 

otherwise  before  9  Geo.  IV.,  c.  14.     See  An   act  or   acknowledgment  of   one 

Maiiderston  v.  Robertson,  4  Man.  &  R.  partner  will  not  take  a  firm  debt  out  of 

440.     As  to  admissions  by  one  partner,  the  statute  after  dissolution,  so  as  to  bind 

Bee  ante  p.  *128.  the  other  partner,  unless  the  one  doing 

57.  Revival  of  debt  by  admissions  the  act  or  making  the  acknowledgment 

or    acknowledgment. — The   surviving  has    become    the    liquidating    partner, 

partner's  acknowledgment  of  the  claim  William  v.  Waugh,  101  Pa.  St.  233. 

will  not  bind  the  estate  of  the  deceased  (e)  See  the  last  note, 

partner  if  the  claim  is  barred  by  statute  58.  Promise  of  one  partner.— Where 

as  against  the  estate.     Espy  v.  Comer,  76  one  of  ses-eral  partners,  after  the  disso- 

Ala.  501.  luticm   of    the   partnership,   assumed   a 

After  the  dissolution  of  a  partnership,  partnership  debt,  but  afterwards  pleaded 

an  acknowledgment  and  promise  to  pay,  the  statute  of   limitations,  jointly  with 

made  by  one  of  the  partners,  will  not  the  other  partners,   to  an  action  upon 

revive  a  debt  against  the  firm  which  is  such    debt — Held,  that  the  promise  of 

barred    by    the   statute   of    limitations,  such  partner  might  be  given  in  evidence. 

Van  Keuren  v.  Parmalee,  2  N.  Y.  523;  for  the  plea  admitted  that  they  did  once 

Walsh  V.  Cane,  4  La.  Ann.  533  ;  Kauft-  assume.      Brockenbrough  v.  Hackley,  6 

man  v.  Fisher,  3  Grant  (Pa.)  Cas.  302;  Call  (Va.)  51. 

Reppert  v.  Colvin,  48  Pa.  St.  248.     Con-  (/)  As  to  payment  by  bills,  see  Gowan 

(ra,  see  Smith  v.  Ludlow,  6  Johns.  (X.  v.  Forster,   3  B.  &  Ad.  507;  Irving  v. 

Y.)267;  Ward  V.  Howell,  5  Harr.  &  J.  Veitch,  3  Mees.  &  W.  90;  Turney  «, 

(Md.)  60;  Neal  v.  Hassan,  3  McCord  Dodwell,  3  El.  &  B.  136. 

426 


CHAP.  II.,  §  III.]         STATUTES   OF   LIMITATION. 


262^ 


^262] 


liable  with  him.  {g)     But  even  before  the  Mercantile  *Law 


Amendment  act,  payment  by  a  surviving  partner  did  not 
prejudice  the  estate  of  a  deceased  partner  (A)  any  more  than  a  pay- 
ment by  the  executors  of  the  deceased  prejudiced  the  partners  wha 
survived ;  {%)  for  the  executors  of  a  deceased  partner  are  not  liable 
jointly  with  the  surviving  partners.  But  if  one  of  the  surviving 
partners  was  an  executor  of  the  deceased,  then  a  question  of  a  dif- 
ferent nature  arose,  turning  not  only  on  the  effect  of  the  payment  as 
such,  but  on  whether  it  was  made  by  the  survivors  as  surviving 
partners  only,  or  as  to  one  of  them  in  his  character  of  executor 
also,  (yt)  59 

{g)  See  Whitcomb  v.  Whiting,  2  Doug,  the  decisions  went  the  length  of  binding 

652,  and  i  Sm.  Lead.  Cas. ;  9  Geo.  IV.,  the  firm  even  in  this  extreme  case.    See 

c.  14,  \  1.     The  doctrine  that  payment  the  excellent  judgment  in  Bell  v.  Morri- 

by  one  partner  took  a  debt  out  of  the  son,  1  Pet.  (U.  S.)  351,  set  out  in  Story 

statute   as   against    all,   was    generally  on  Part.,  §  324,  note, 

rested  on  the  ground  that  the  partner  {h)  Atkins  v.  Tredgoid,  2  Barn.  &  C. 

making  the  payment  acted  virtually  as  23. 

the  agent  for  the  rest.  But  the  right  of  {i)  Slater  v.  Lawson,  1  B.  &  Ad.  396. 
one  of  several  codebtors  (whether  they  [k)  See  Braithwaite  i;.  Britain,  1  Keen- 
are  partners  or  not)  to  make  a  payment  206,  where  the  payment  prevailed  ;  Way 
on  account  of  the  joint  debt,  is  not  de-  v.  Bassett,  5  Hare  55 ;  Brown  v.  Got- 
rived  from  any  authority  conferred  by  don,  16  Beav.  302,  where  it  did  not. 
the  other  debtors,  for  they  have  no  right  See,  further,  Griffin  v.  Ashby,  2  Car.  & 
to  prevent  their  codebtor  from  reliev-  K.  139 ;  Atkins  v.  Tredgoid,  2  Barn.  & 
ing  himself   from  a  liability  to  which  C.  23. 

he  is  subject  as  much  as  they.  More-  59.  Part  payment  by  one  partner. — 
over,  admitting  that  the  doctrines  of  A  payment  made  upon  a  simple  con- 
agency  are  applicable  to  payments  made  tract  debt  of  a  partnership,  after  its  dis- 
hy one  of  several  codebtors,  it  is  impos-  solution,  by  a  partner  authorized  to  set- 
sible  to  justify,  on  that  ground,  the  de-  tie  the  concerns  of  the  partnership,  and 
cisions  which  have  just  been  noticed,  before  the  debt  is  already  barred  by  the 
They  were  all,  it  is  said,  based  upon  statute  of  limitations,  is  such  an  ac- 
this:  that  a  part  payment  is  evidence  of  knowledgment  of  the  debt  as  will  take 
a  new  promise  to  pay  more  (Bateman  v.  it  out  of  the  statute  as  to  all  the  copart- 
Pinder,  3  Q.  B.  574).  But  upon  what  ners.  Houser  v.  Irvine,  3  Watts  &  S. 
principle  can   it  be   held   that   after  a  (Pa.)  345. 

partnership  is  dissolved  one  partner  has  After  a  firm  has  been  dissolved,  par- 

any   implied    authority    from    his    late  tial  payment  on   a  firm   debt,  made  by 

partners,  to  bind  them  by  a  fresh  promise  one  partner  to    a   party   who  has  had 

to  pay  an  old  debt?     Assuming  the  debt  dealings  with  the  firm,  and  has  had  no 

to  be  already  barred,  the  question  can  notice   of    the   dissolution,    is  evidence 

admit  of  no  satisfactory  answer,  and  vet  against  all  the  partners,  to  prevent  the 

"427 


2G2*  TERMINATION   OF    LIABILITY.  [bOOK    II., 

Liability  in  equity  of  estate  of  deceased  partner. — The  effect  of  the 
statutes  of  limitation  upon  suits  in  equity  against  the  executors  of 
a  deceased  partner  was  not  well  settled.  In  Winter  v.  Innes  (l)  Lord 
Cottenham  expressed  a  doubt  whether  the  executors  could  set  up 
the  statute  where  the  surviving  partner  continued  liable  and  had  a 
right  of  contribution  against  them,  but  in  Way  v.  Bassett(m)  the 
statute  was  successfully  relied  upon  as  a  defence  by  the  executors  of 
a  deceased  partner,  although  the  surviving  partners  had  by  various 
payments  kept  the  debt  alive  as  against  themselves.  The  law  now 
is  in  accordance  with  the  latter  decision,  (n) 

Alterations  introduced  by  Id  and  20  Vict.,  c.  97. — By  the  Mer- 
cantile Law  Amendment  act,  19  and  20  Vict.,  c.  97,  it  is  enacted 
as  follows : 

Section  13.  In  reference  to  the  provisions  of  tlie  acts  of  9  Geo.  IV.,  c.  14,  |§  1 
and  8,  and  16  and  17  Vict.,  c.  113,  §§  24  and  27  (Irish),  an  acknowledgment  or 
promise  made  or  contained  by  or  in  a  writing  signed  by  an  agent  of  the  party 
chargeable  thereby,  duly  authorized  to  make  such  acknowledgment  or  promise, 
sball  liave  the  same  effect  as  if  such  writing  had  been  signed  by  such  party 
himself. 

Payments  by  one  of  severed  codeblors. — Section  14.  In  reference  to  the  provisions 
of  the  acts  21  Jac.  I.,  c.  16,  |  3;  3  and  4  Wm.  IV.,  c.  42,  §  3,  and  16  and  17  Vict., 
c.  113,  I  20  (Irish),  when  there  shall  be  two  or  more  co-contractors  or  codebtors, 
whether  bound  or  liable  jointly  only,  or  jointly  and  severally,  or  executors  or  ad- 
ministrators of  any  co-contractor,  no  such  co-contractor  or  codebtor,  executor  or 
administrator,  shall  lose  the  benefit  of  the  said  enactments,  or  any  of  them,  so  as 

running   of  the  statute  of  limitations,  whether  the  full  amount  of  his  propor- 

Kenniston  v.  Avery,  16  N.  H.  117.  tion  of  said  debt  be  actually   paid    or 

A  statute  of  Rhode  Island  provides  not."     The  statute  also  saves  the  credi- 

that  "  whenever  any  copartnership  shall  tor's  action  against  the  other  copartners 

be  dissolved,  it  shall  and  may  be  lawful  for  the  balance  due.     Held,  that  a  pay- 

for  any   individual  who  was  embraced  ment  and  compromise  made  by  any  one 

in  such  copartnership  to  make  a  sepa-  copartner  is  wholly  6n   his  own   indi- 

rate   composition    or   compromise   with  vidual  account,  and  is  not  such  an  ac- 

any  one  or  all  of  the  creditors  of  such  knowledgment  of  indebtedness  as  will 

copartnership;  and  such  composition  or  bind  the  other  copartners  in  reference 

compromise  shall  be  a  full  and  effectual  to  the  statute  of  limitations.     Turner  v. 

discharge   to   the    debtor    making    the  Ross,  1  R.  I.  88. 

same  of  the  whole  of  said  debt,  and  be  (/)  4  Myl.  &  C.  101. 

taken    and    considered,   in   reference  to  (m)  5  Hare  55. 

the  other  copartners,  as  actual  payment  (n)  19  and  20  Vict.,  c.  97,  |  14,  infra. 
of  such  debtor's  proportion  of  the  debts, 

428 


CHAP.  II.,  §  III.].        STATUTES   OF   LIMITATION.  263* 

to  be  charge*able  in  respect  or  by  reason  only  (o)  of  payment  of  any  prin-   .^.-,^0 
cipal,  interest  or  other  money,  by  any  other  or  others  of  such  co-contractors, 
or  codebtors,  executors  or  administrators. 

Effect  of  above  statute  on  partners. — The  above  statute,  it  will  be 
observed,  has  materially  altered  the  law  as  regards  the  effect  of 
acknowledgments  and  part  payments.  An  acknowledgment  by  au 
agent  being  now  sufficient  to  affect  his  principal,  acknowledgment 
by  one  partner  will,  it  is  apprehended,  be  regarded  as  an  acknowl- 
edgment by  the  firm  ;  and  notwithstanding  section  14,  a  part  pay- 
ment by  a  partner  will  probably  be  regarded  as  a  part  payment  by 
the  firm,  {p) 

But  after  a  dissolution  a  part  payment  by  a  continuing  or  a  sur- 
viving partner  will  not  prevent  a  retired  partner  {q)  or  the  executors 
of  a  deceased  partner  (r)  from  availing  themselves  of  the  statute ; 
and  the  same  is  true  of  an  acknowledgment,  (s) 

(0)  See,  as  to  this  word,  Cockrill  v.  This,  however,  was  a  mistake.   In  every 

Sparkes,  1  Hurlst.  &  C.  699.  other  respect  the  case  is  good  law.     A» 

(p)  See  Goodwin  v.  Parton,  42  L.  T.  to  the  non-retrospective  operation  of  sec- 

568;  Watson  d.  Woodman,  20  Eq.  730.  tion   14  of  the  statute,  see   Jackson   v. 

(q)  Id.  721.  Woolley,  8  El.  &  B.  778 ;  Flood  v.  Pat- 

(r)  Thompson  v.  Waithman,  3  Drew,  terson,  29  Beav.  295. 

628,   in   which   the  surviving   partner  (s)  If  in  any  case  it  couM  be  shown 

was  the  sole  executor  of  the  deceased,  that  a  continuing  or  surviving  partner 

In  this  case,  section  14  of  the  act  in  ques-  was  in  point  of  fact  authorized  to  act 

tion  was  treated  as  having  a  retrospective  for  the  late  partner  or  his  executors  in 

operation,  and  as  destroying  the  effect  making  acknowledgments  or  payments^ 

of  a  payment  made  before  the  act  passed,  the  case  would  be  different. 

429 


264*  ACTIONS    BY    AND  [bOOK    II., 


^264]  *CHAPTER  III. 


OP  ACTIONS  BETWEEN   PARTNERS   AND   NON-PARTNERS. 


Section  I. — Actions  by  and  against  Partners,  *264. 

1.  General  observations,  *264. 

2.  Actions  where  no  change  in  the  firm  has  occurred,  *273. 

3.  Actions  where  a  change  in  the  firm  has  occurred,  *284. 
Section    II. — Of  Set-off,  *290. 

Section  III. — Of  Execution  against  Partners  for  the  Debts  op 
THE  Firm,  *298. 


General  observations. — In  order  to  complete  the  subjects  discussed 
in  the  preceding  chapters  it  is  necessary  to  examine  the  remedies  by 
which  rights  and  obligations  between  partners  and  non-partners  can 
be  enforced. 

It  is  unnecessary  to  dwell  upon  criminal  prosecutions,  for  although 
partners  may  be  prosecutors  or  prosecuted  in  respect  of  criminal 
offences,  the  fact  that  they  are  partners  has  little,  if  any,  effect  on 
their  position  in  a  criminal  point  of  view. 

The  remedies  which  alone  are  of  sufficient  importance  to  require 
consideration  in  a  treatise  like  the  present  are :  actions,  defences  by 
way  of  set-off,  proceedings  to  enforce  judgments,  and  proceedings 
in  bankruptcy.  The  subject  of  bankruptcy  will  be  discussed  here- 
after, and  the  present  chapter  will  therefore  be  confined  to  actions, 
set-off  and  execution. 


SECTION  I. — ACTIONS    BY   AND   AGAINST   PARTNERS. 

1.    General  observations. 

The  Judicature  acts,  1873  and  1875,  and  the  rules  of  the  Supreme 

430 


CHAP,  in.,  §  I.]  AGAINST    PARTNERS.  264* 

Court,  1883,  have  materially  altered  and  improved  legal  proceedings 
by  and  against  partnerships  and  unincorporated  companies. 

1 .  There  is  now  no  distinction  between  legal  and  equitable  rules 
as  regards  parties  to  sue  and  be  sued,  (a) 

2.  No  action  can  be  defeated  by  reason  of  the  misjoinder  or  non- 
joinder of  parties ;  (6)  and  pleas  in  abatement  are  abolished,  (c)    If 
too  many  or  too  ^w  persons  join  as  plain*tiffs,  and  the  r^^^K 
defendant  can  show  that  he  is  thereby  prejudiced,  he  can  '- 
apply  to  have  the  improper  plaintiffs  struck  out,  or  the  proper 
plaintiiFs  joined,  as  the  case  may  be.  (d) 

3.  All  persons  may  be  joined  as  plaintiffs,  or  as  defendants,  in 
or  against  whom  the  right  to  any  relief  claimed  is  alleged  to  exist, 
whether  jointly  pv  severally,  or  in  the  alternative,  (e) 

4.  A  plaintiff"  may,  at  his  option,  join,  as  parties  to  the  same 
action,  all  or  any  of  the  persons  severally,  or  jointly  and  severally, 
liable  on  any  one  contract,  including  parties  to  bills  of  exchange 
and  promissory  notes.  (/) 

5.  Claims  by  plaintiffs  jointly  may  be  joined  with  claims  by 
them,  or  any  of  them  separately,  against  the  same  defendant,  (^) 
provided  no  inconvenience  is  thereby  occasioned.  (A) 

6.  Parties  required  by  a  defendant  to  be  joined  for  his  indemnity 
or  relief  by  way  of  contribution  may  be  brought  before  the  court.  {{) 

7.  Where  there  are  numerous  parties  having  the  same  interest 
in  one  action,  one  or  more  of  them  may  sue  or  be  sued  on  behalf 
of  all.  {k) 

8.  Any  two  or  more  persons  claiming  or  being  liable  as  copart- 
ners may  sue  or  be  sued  in  the  names  of  the  firms  of  which  they 
were  members  when  the  cause  of  action  accrued ;(/)  and  provision  is 
made  for  the  discovery  of  the  individuals  so  suing  or  being  sued,  (m) 

(a)  See  Supreme  Court  Rules,  1883,        (t)  Ord.  XVI.,  r.  48,  e<  se^.     See  Birm- 

Order  XVI.  ingham  Land   Co.  v.  L.  &  N.  W.  Rail. 

(6)  Ord.  XVI.,  r.  11.  Co.,  34  Ch.  D.  261. 

(c)  Ord.  XXI.,  r.  20.  {k)  Ord.  XVI.,  r.  9. 

(d)  Ord.  XVI.,  r.  11.  (/)  Id.,  rr.  14  and  15. 

(e)  Ord.  XVI.,  rr.  1  and  4.  (m)  Ord.  XVI.,  rr.  14  and  15,  and 
(/)  Ord.  XVI.,  r.  6.  Ord.  VII.,  r.  2.  See,  as  to  the  old  law, 
(g)  Ord.  XVIII.,  r.  6.  Woolf  v.  City  Steam  Boat  Co.,  7  C.  B., 
(h)  Id.,  r.  7.  103. 

431 


265* 


ACTIONS    IN    MERCANTILE   NAME 


[book  II., 


Actions  in  the  mercantile  name. — With  reference  to  this  last  rule, 
it  is  to  be  observed  that  the  firm's  name,  when  used  in  any  action, 
is  merely  a  convenient  method  of  expressing  the  names  of  those 
who  constituted  the  firm  when  the  cause  of  action  accrued.  The 
rule  does  not  incorporate  tiie  firm;(n)  so  that  if  A  is  a  creditor  of 
a  Ih-m,  B,  C  &  D,  and  D  retires  and  E  takes  his  place,  and  the 
name  of  the  firm  continues  unchanged,  A  cannot  maintain  an 
*action  against  B,  C  and  E,  in  tlie  name  of  the  firm,  un- 
less B,  C  and  E  have  become  or  are  content  to  be  treated 
as  his  debtors.  In  the  case  supposed,  an  action  against  the  firm 
would  mean  an  action  against  B,  C  and  D,  i.  e.,  A's  real  debtors.l 


^266] 


(n)  See  per  James,  L.  J.,  in  Ex 
parte  Blain,  12  Ch.  D.  533.  As  to  the 
Scotch  law  from  which  the  rule  was 
taken,  see  Bullock  v.  Caird,  L.  R.,  10 
Q.  B.  276. 

1.  When  firm  may  sue  in  the  mer- 
cantile name. — The  more  prevalent 
and  best  settled  rule  is  that  partners 
cannot  sue  or  be  sued  in  their  copartner- 
ship name ;  but  the  individual  names  of 
those  who  compose  the  firm  must  be  set 
forth.  Barber  v.  Smith,  41  Mich.  138; 
Bentley  v.  Smith,  3  Cai.  (N.  Y.)  170 ; 
Blackwell  v.  Reid,  41  Miss.  102  ;  Burns 
V.  Hall,  2  Penn.  (N.  J.)  984  ;  Crandail  v. 
Denny,  1  Penn.  (N.  J.)  137 ;  Davis  v. 
Hubbard,  4  Blackf.  (Ind.)  50;  Faulkner 
V.  Whitaker,  3  Gr.  (N.  J.)  438;  Holland 
V.  Butler,  5  Blackf.  (Ind.)  255;  Hughes 
V.  Walker,  4  Id.  50 ;  Livingston  v.  Har- 
vey, 10  Ind.  218 ;  Marshall  v.  Hull,  8 
Yerg.  (Tenn.)  101 ;  Pate  v.  Bacon,  6 
Munf.  ( Va.)  219 ;  Porter  v.  Cresson,  10 
Serg.  &  R.  (Pa.)  257  ;  Seeley  v.  Schenck, 
1  Penn.  (N.  J.)  75;  Smith  v.  Canfield,8 
Mich.  493.  The  names  of  the  partners 
composing  th<;  firm  should  be  distinctly 
stated.  If  the  record  does  not  show  their 
Christian  names  or  surnames,  nor  any- 
thing else  upon  which  an  amendment 
may  be  based,  to  render  judgment  by 
default  is  erroneous.     Langford  v.  Pat- 

43 


ton,  44  Ala.  584. 

But  this  rule  is  subject  to  exceptions. 
Thus,  where  the  individual  names  ap- 
pear in  the  petition,  the  name  of  the 
firm  may  be  used  in  the  citation  or  writ. 
Andrews  v.  Ennis,  16  Tex.  45  ;  Tarleton 
V.  Herbert,  4  Ala.  359. 

In  California,  where  the  style  of  a  firm 
in  which  they  do  business  does  not  dis- 
close the  names  of  the  partners,  the  firm 
cannot  sue  in  their  mercantile  name 
until  they  have  filed  the  certificate  and 
made  the  publication  required  by  the 
California  Code,  which  on  this  point  is 
explicit.  Byers  v.  Bourret.  64  Cal.  73. 
And  the  filing  of  the  certificate  being 
alleged,  the  allegation  must  be  proved. 
Sweeney  v.  Stanford,  67  Cal.  635. 

In  Illinois,  the  provision  in  Rev.  Stat, 
(ch.  40,  §  7)  dispensing,  where  there  is 
no  plea  in  abatement,  with  the  proof  of 
partnership  and  of  the  names  of  the 
partners,  in  a  suit  brought  by  a  firm, 
applies  as  well  to  suits  commenced  be- 
fore justices  of  the  peace  as  to  those 
brought  in  the  Circuit  Court.  Evans  v. 
Fisher,  10  111.  (5  Gilm.)  569. 

In  Iowa  it  is  best  to  declare  on  a  note 
made  payable  to  a  firm  by  its  name,  in 
the  name  of  the  firm  ;  but  if  the  indi- 
vidual names  of  the  partners  are  set  out, 
it  is  not  necessary  to  prove  them.  Gordon 
2 


CHAP.  III.,  §  I.]    WHERE   THERE    HAVE    BEEX    CHANGES. 


266^ 


Where  there  have  been  no  changes  in  the  firm. — Where  there  have 
been  no  changes  amongst  the  members  of  a  firm  since  the  cause  of 
action  accrued  there  is  no  difficulty  iu  following  the  rules.     The 


V.  Janney,  1  Morr.  (Iowa)  182  ;  Bernard 
V.  Parvin,  Id.  309. 

In.  Nebraska,  by  Code,  I  24,  a  partner- 
ship which  is  not  incorporated,  may  sue  in 
its  firm  name,  but  the  procedure  indicated 
by  sections  25  and  26,  must  be  strictly 
followed.  In  particular  it  must  be  shown 
that  the  company  is  formed  for  business 
purposes,  &c.,  and  is  not  incorporated, 
and  security  for  costs  must  be  given. 
Burlington,  &c ,  R.  E..  Co.  v.  Dick,  7 
Neb.  242.  An  attachment  by  a  non- 
resident partnership,  in  the  name  of  the 
firm,  is  not  void.  Cady  v.  Smith,  12 
Neb.  628. 

In  North  Carolina  a  judgment  in 
favor  of  "  L.  &  M.,"  trading  as  a  firm,  is 
valid,  and  is  competent  evidence,  in  a 
suit  brought  by  the  firm,  that  the  judg- 
ment was  recovered  by  the  partnership, 
their  individual  names  being  set  out  in 
full.  Lash  V.  Arnold,  8  Jones  (N.  C.) 
L.  91. 

When  hrm  may  be  sued  in  the 
mercantile  name. — In  Alabama  a 
judgment  against  a  partnership  in  its 
firm  name  alone  will  support  an  action 
against  an  individual  member  of  the 
firm,  to  enforce  his  individual  liability 
for  the  firm  debts.  Cox  v.  Harris,  48 
Ala.  538.  But  the  record  must  show 
the  individual  names  of  the  several 
partners  plaintiff;  although  the  statute 
(Code  of  1876,  §  3038)  dispenses  wi-th 
the  necessity  of  proving  them  un- 
less denied  by  plea  verified  by  affidavit, 
and  also  (section  2904)  authorizes  a  suit 
against  a  partnership  by  its  firm  name. 
Moore  v.  Burns,  60  Ala.  269. 

In  Illinois,  under  the  attachment  law, 
partners  may  be  sued  in  their  firm  name. 


U.  S.  Express  Co.  v.  Bedbury,  34  111.  459. 

In  Iowa,  if  a  partnership  is  sued  in  the 
firm  name,  the  code  renders  a  sci.fa.  ne- 
cessary, in  order  to  reach  individual 
{)roperty.  Hansmith  v.  Espy,  13  Iowa 
439;  Levally  v.  Ellis,  Id.  544;  Davis  v. 
Buchanan,  12  Id.  575.  And  a  partner- 
sliip  may  be  sued  in  the  individual! 
names  of  its  members  as  well  as  in  its 
copartnership  name.  Markham  v.  Buck- 
ingham, 21  Iowa  494 ;  Johnson  v.  Smith, 
1  Morr.  (Iowa)  105.  S.  P.,  in  Ohio, 
Abernathy  v.  Latimore,  19  Ohio  286. 

On  the  other  hand,  in  Indiana  and 
New  Jersey,  partners  cannot  be  sued  in 
the  name  of  the  firm.  Holland  v.  But- 
ler, 5  Blackf.  (Ind.)  255;  Livingston  v. 
Harvey,  10  Ind.  218;  Faulkner  i>.  Whita- 
ker,  3  Gr.  (N.  J.)  438 ;  while  in  Ohio  a 
proper  construction  of  section  1  of  the 
"  act  regulating  suits  by  and  against  com- 
panies and  partners,"  authorizing  suits 
by  and  against  companies  not  incorpora- 
ted, in  the  firm  name,  limits  its  opera- 
tion to  companies  formed  for  and  doing 
business  or  holding  property  within  the 
State.  Haskins  v.  Alcott,  13  Ohio  St. 
210. 

Taking  advantage  of  the  defect. — 
T.  and  W.  declare  as  partners,  trading 
under  the  firm  of  T.,  W.  &  Co.  If  there 
be  more  than  two  partners,  it  can  be 
shown  only  under  a  plea  in  abatement. 
Garner  v.  Tiffany,  Minor  (Ala.)  167. 

A  complaint  brought  in  a  firm's  name, 
but  not  stating  the  names  of  the  mem- 
bers of  the  firm  as  plaintiffs,  is  defective 
and  can  be  demurred  to,  but  the  defect 
cannot  be  availed  of  by  appeal.  Oilman 
V.  Cosgrove,  22  Cal.  356. 

Where,  in  an  action  by  partners  doing 


433 


28 


266*  ACTIONS    IN    MERCANTILE    NAME  [bOOK    II,, 

writ  may  be  served  either  upon  any  one  or  more  of  the  pai'tners, 
or  at  the  principal  phice  of  business  of  tJie  firm,  upon  any  person 
having  the  control  or  management  of  the  partnersiiip  business 
there.(o)    Appearances  are  entered  by  the  partners   in   their  own 

business  under  a  fictitious  name,  the  com-  A  summary  process  in  South  Carolina, 
plaint  is  perfect  in  all  other  respects,  brought  in  the  mercantile  name  of  a  firm, 
there  is  no  failure  to  state  facts  sufficient  without  setting  out  the  partnership  or 
to  show  a  cause  of  action  merely  because  the  Christian  names  of  the  partners,  is 
it  contains  no  statement  that  a  certificate  bad  upon  exception  by  plea,  but  not  on 
of  partnership  had  been  filed,  as  pro-  motion  for  nonsuit.  '  Martin  v.  Kelly, 
vided  by  Civil  Code  Cal.,  U  2466,  2468,    Cheves  (S.  C.)  215. 

attaching  a  legal  incapacity  to  maintain  Pleading  the  partnership,  setting 
an  action  upon  any  contracts  made  or  out  names,  &c.— In  a  suit  by  the  plain- 
transactions  had  in  the  partnership  name  tiff  as  assignee  of  a  firm,  on  a  promissory 
to  a  failure  to  file  such  a  certificate ;  and  note  againsit  the  maker,  the  declaration 
an  objection  that  no  such  certificate  has  need  not  state  the  names  of  the  persons 
been  filed,  must  therefore  be  taken  by  composing  the  firm.  Smith  v.  Blatch- 
answer;    otherwise,    under   Code   Civil    ford,  2  Ind.  184. 

Pro.  Cal.,  I  434,  it  is  waived ;  aflirming  In  an  action  by  partners  or  against 
13  Pac.  Rep.  313.  Phillips  v.  Gold-  partners,  as  such,  the  complaint  must 
tree  (Cal.),  15  Pac.  Rep.  451.  allege  the  partnership.    Foerster  v.  Kirk- 

Where  plaintifl',  in  fact,  assuming  to  patrick,  2  Minn.  210. 
act,  not  as  a  corporation,  but  as  a  partner-  Suit  was  brought  in  the  name  of  "Han- 
ship,  sues  by  a  name  importing  a  corpo-  son  Gregg,  Albert  Torrain  and  Mason 
ration,  the  point  may  be  raised  by  an  Gregg,  late  copartners,  under  the  firm 
answer  alleging  want  of  parties  in  in-  name  and  style  of  Gregg,  Torrain  &  Co., 
terest  to  the  suit.  Heaston  «;.  Cincinnati,  plaintifl's."  On  demurrer  the  suit  was 
&c.,  R.  R.  Co.,  16  Ind.  275.  held  not  brought  under  the  provisions 

Where  a  non-resident  firm  is  sued  in  of  Gen.  Stat.  Neb.,  c.  57,  §  24,  and  it 
its  firm  name,  and  answers,  and  a  verdict  was  not  necessary  that  plaintiffs  should 
is  taken  upon  the  defence  set  up  in  the  allege  that  the  partnership  "  was  formed 
answer,  without  objection  to  the  irregu-  for  the  purpose  of  carrying  on  trade  or 
larity,  the  defendants  will  be  deemed  to  business,  or  for  the  purpose  of  holding 
have  waived  their  strict  legal  right  to  any  species  of  property  in  this  State." 
object.  Brownson  v.  Metcalfe,  1  Handy  Smith  v.  Gregg,  2  N.  W.  Rep.  (N.  S.) 
(Ohio)  188.  459;  S.C,  9  iNeb.  213. 

If  a  partnership  be  sued  by  its  firm  In  an  action  by  partners  of  the  same 
name  without  naming  its  members,  the  surname,  it  is  not  error  if  it  is  not  added 
defect  is  cured  by  verdict ;  and  if  a  suit  to  every  Christian  name.  Chance  v. 
is  in  the  firm  name  the  court  will  pre-  Chambers,  1  Penn.  (N.  J.)  384. 
sume  it  after  verdict  to  be  in  the  name  (o)  Ord.  IX.,  r.  6.  See,  as  to  foreign 
of  real  persons  when  the  contrary  does  firms,  PoUexfen  r.  Sibson,  16  Q.  B.  D. 
not  appear.  Seitz  v.  Buffum,  14  Pa.  St.  792;  Baillie  v.  Goodwin,  33  Ch.  D.  604; 
69;  Pate  v.  Bacon,  6  Munf.  (Va.)  219.       and   as  to  lunatics,  Fore  Street  Ware- 

434 


CHAP.  III.,  §  I.]    WHERE   THERE   HAVE   BEEN   CHANGES.  266* 

names,  but  subsequent  proceedings  continue  in  the  name  of  the 
firm.(jj)  If  all  the  members  of  the  firm  have  properly  appeared, 
judgment  may  be  entered  up  against  the  firm, {5)  but  not  other- 
wise, (r) 

W-here  there  have  been  changes. — Where  changes  have  occurred 
amongst  the  members  of  the  firm  since  the  cause  of  action  accrued, 
little,  if  any,  advantage  is  derived  fronn  using  the  name  of  the  firm. 
If  an  action  is  brought  against  a  firm,  which  the  plaintiif  knows 
has  been  dissolved  before  the  commencement  of  the  action,  the  writ 
mu-t  be  served  upon  all  the  persons  sought  to  be  made  liable,  (s) 
If,  as  sometimes  happens,  the  plaintiff  sues  a  firm  and  obtains 
judgment  against  it,  without  having  discovered  that  any  changes 
have  occurred  in  it  since  the  cause  of  action  accrued,  he  may  find 
himself  in  a  difficulty  when  he  seeks  to  enforce  his  judgment.  In 
such  a  case  it  may  well  happen  that  the  person  against  whom  he 
seeks  to  enforce  it  is  not  one  of  those  mentioned  in  Ord.  XLII.,  r. 
10,  and  is,  in  fact,  not  liable  to  execution  without  further  proceed- 
ings, if  at  all.  {t) 

A  debt  due   from  a  firm  under  a  judgment  recovered  against 

*it  in  its  mercantile  name  cannot   be  attached  under  the  r*o/>^ 

I  *2d7 
garnishee  orders,  (w) 

It  frequently  happens  that  there  are  reasons  which  prevent  the 
joinder  as  plaintiffs  of  all  who  prima  facie  ought  to  be  joined  ;  in 
such  a  case  those  who  cannot  be  so  joined  may  be  made  defendants. 
Thus,  if  a  firm  has  a  cause  of  action,  and  one  member  has  im- 
properly released  it,  the  other  members  can  nevertheless  maintain 
the  action,  joining  him  as  a  defendant,  so  that  justice  may  be  done 
both  to  the  plaintiffs  and  to  their  opponents,  (x)  2 


house  Co.  V.  Diirrant  &  Co.,  10  Q.  B.  D.  (s)  Orel.  XVI.,  r.  1 1. 

471.  (<)  See  Munster  v.  Cox,  10  App.  Cas. 

(  d)  Ord.  XII.,  r.  15.  680,  and  infra,  §  3,  as  to  execution. 

(9)  lb.    Jack.son  v.  Litchfield,  8  Q.  B.  (u)  Walker  v.  Rooke,  6  Q.  B.  D.  631. 

J)  474  (x)  See  the  cases  in  the  next  note. 

(r)  Adam  v.  Townsend,  14  Q.  B.  D.  2.  Where  there  have  been  changes 

103;  Jackson  v.  Litchfield,  8  Q.  B.  D.  in  the  firm.— The  general   rule  is  that 

474;  Munster  v.  Cox,  10  App.  Cas.  680,  all  the  partners  must  join  as  plaintiffs 

affirming  Munster  v.  Railton,  11  Q.  B.  D.  in  an  action    to   enforce  a  partnership 

435.     As  to  execution,  see  tTi/Va,  §  3.  claim;  and  this   whether  the   action  is 

43o 


267^ 


TWO   FIRMS 


[book  Il.y 


Two  firms  with  common  partner. — Again,  there  appears  to  be  no 
reason  why  an  action  should  not  now  be  maintained  for  the  recovery 
of  a  debt  due  from  one  partner  to  the  firm ;  {y)  nor  why,  if  twa 


brought  before  or  pfter  the  dissohition 
of  the  partnership.  Cochran  v.  Cun- 
ningliam.  16  Ahi.  448 ;  Dob  v.  Halsey, 
16  Johns.  (N.  Y.)  34;  Gage  v.  Eoliins, 
10  Mete.  (Mass.)  348;  Gallot  v.  Mc- 
Cluskey,  18  La.  Ann.  259;  Holt  v.  Ker- 
nodle,  1  Ired.  (N.  C.)  L.  199;  Shiitts  v. 
Chaflee,  48  Wis.  617;  Snodgrass  v. 
Broadwell,  2  Litt.  (Ky.)  353;  Wright  v. 
Williamson,  2  Penn.  (N.  J.)  978. 
Where  one  of  the  partners  refuses  to 
join  in  an  action  for  the  enforcement  of 
a  firm  claim,  he  may  be  made  a  defend- 
ant with  the  partnership  debtor,  in  a  suit 
brought  by  his  copartner.  Hill  v.  Marsh, 
46  Ind.  218. 

A  suit  on  a  firm  claim  may  be  main- 
tained in  the  firm  name,  thougii  one 
partner  may  be  entitled  to  the  proceeds, 
if  the  claim  itself  has  not  been  applied 
to  extinguish  the  debt  due  sucli  partner. 
White  V.  Savery,  50  Iowa  515. 

Where,  after  the  institution  of  suit  in 
the  names  of  the  members  of  a  firm,  one 
of  them  dies,  it  is  not  error  to  file  subse- 
quently a  declaration  in  the  names  of  all 
of  them,  and  then  suggest  the  death  of 
the  deceased  member.  Byrne  v.  Schwing, 
6  B.  Mon.  (Ky.)  199. 

A  commercial  firm  cannot  demand  in 
the  same  suit  the  payment  of  two  promis- 
sory notes,  although  they  are  dated  at 
the  same  place  and  on  the  same  day, 
and  both  payable  to  the  firm  under  its 
firm  name,  where  it  is  shown  that  such 
firm  was  composed  of  diflerent  persons, 
when  the  indebtedness  was  created  which 
fornied  the  consideration  of  one  note, 
from  those  persons  who  composed  th« 
firm  when  the  indebtedness  was  incurred 
which  formed  the  consideration  of  the 
other  note.     It  would  be  a  case  of  dis- 


tinct creditors  joining  in  the  same  action 
their  separate  and  distinct  demands 
against  the  debtor.  Dyas  v.  Dinkgrave, 
15  La.  Ann.  502. 

If  one  partner  is  omitted  as  plaintiflT, 
and  made  a  party  defendant  with  an- 
other person  not  a  partner,  and  not  rep- 
resenting the  interests  of  one,  the  court 
will  not  have  equity  jurisdiction  as  it 
respects  the  latter.  Reed  v.  Johnson,  24 
Me.  322. 

Wiiere  there  were  one  hundred  part- 
ners who  had  executed  separate  mort- 
gages to  the  firm  to  secure  the  debts  of 
the  concern,  and  some  of  the  partners 
were  dead,  leaving  numerous  representa- 
tives, it  was  held  that  assignees  of  such 
mortgages  might  foreclose  by  separate 
suits  against  each  partner,  without  mak- 
ing the  others  parties.  Boisgerard  v. 
Wall,  1  Smed.  &  M.  (Miss.)  Ch.  404. 

Where  a  note  or  bill  is  payable  to  a 
firm,  strict  proof  is  required  that  the 
firm  consists  of  the  plaintifTs  on  the 
record.  M'Gregort;.  Cleveland,  5  Wend. 
(N.  Y.)  475. 

W^here  a  suit  is  brought  by  several  as 
partners,  and  one  of  them  proves  not  to 
have  been  a  partner  and  not  a  proper 
party,  a  verdict  for  all  cannot  be  sus- 
tained. Travis  v.  Tobias,  8  How.  (N. 
Y.)  Pr.  333. 

After  a  guaranty  had  been  made  to  a 
firm,  one  of  its  members  retired,  and 
the  other  partners  paid  the  whole  debt 
that  the  guarantor  had  stipulated  to  re- 
lieve the  firm  of.  Held,  that  the  late 
partner  was  not  an  improper  party  to  a 
suit  on  the  guaranty.  Brown  v.  Haven, 
37  Vt.  439. 

(y)  Piercy  v.  Fynney,  12  Eq.  69  j 
Tavlor  v.  Midland   Rail.  Co.,  28  Beav. 


436 


€HAP.  III.,  §  I.]  WITH   COMMON    PARTNER.  267* 

firms  have  a  common  partner,  an  action  should  be  maintained  by 
one  firm  against  the  other ;  not,  perhaps,  in  their  mercantile  names, 
but  by  those  members  of  one  firm  which  are  not  common  to  both 
against  the  members  of  the  other  firm ;  e.  g.,  if  there  are  two  firms, 
A,  B  &  C  and  A,  D  &  E,  an  action  may,  it  is  conceived,  be  now 
maintained  by  A,  B  &  C  against  D  and  E,  or  by  B  and  C  against 
A,  D  &  E,  or  vice  versa,  (z)  3 

287,  and  8  H.L.Cas.  751,  show  that  suits  not  bar  or  defeat  proceedings  against 
in  equity  would  lie  in  these  cases  in  aid    them  as  partners  with  others  in  another 


of  legal  rights.  See,  also,  Luke  v.  South 
Kensington  Hotel  Co.,  11  Ch.  D.  121 ; 
Williamson  v.  Barbour,  9  Ch.  D.  536,  per 
Jessel,  M.  K. 

(2)  Before  the  Judicature  acts  such 
actions  could  not  be  maintained.  Bosan- 
•quet  V.  Wray,  6  Taunt.  598;  1  Wms, 
Saund.  291,  h.  But  suits  in  equity  could. 
See  the  cases  in  the  last  note.  See,  as 
to  the  non-application  of  this  rule  at  law 


firm.  Ke  Jewett,  7  Biss.  (U.S.)  328; 
Id.  473  ;  16  Bank.  Keg.  48. 

A  was  a  member  of  the  firm  of  A  & 
B,  and  also  of  the  firm  of  A  &  C.  Held, 
that  A,  B  and  C  could  not  be  joined  in 
one  bankruptcy  proceeding,  even  though 
A  &  C  had  undertaken  to  pay  the  debts 
of  A  &  B.  Ee  Wallace,  12  Bank.  Eeg. 
191. 

An   action   at   law  cannot   be   main- 


to  companies,  Bosanquet  v.  Woodford,  5  tained  by  the  members  of  a  firm,  on  a 

Q.  B.  310.     As  to  estimating  damages  written  obligation  for  the  payment  of 

sustained  by  one  firm  by  reason  of  being  money  to  them,  where  one  of  the  obli- 

prevented  from   completing  a   contract  gors  is  a  member  of  the  firm.     Tindall 

made  with  another  firm,  some  members  v.  Bright,  Minor  (Ala.)  103. 

being  common   to  both,  see  Waters  v.  Where  two  different  firms  are  com- 

Towers,  8  Ex.  401.  posed  of  the  same   persons,  they  may 

3.  Two  firms  with   common    part-  be  sued  jointly  or  separately,  and   this 

ner.— At  common  law  no  action  will  lie,  whether  they  transact  business  in  one  or 

by  one  copartnership  against  another  co-  more  firm  names,  and  a  judgment  may 

partnership,  where  one  of  the  partners  be  rendered  against  them  as  individuals, 

is  a  member  of  both  firms.     Englis  v.  Hunt  v.  Semonin,  79  Ky.  270. 

Furniss,  4  E.  D.  Smith  (N.  Y.)   587 ;  Under  the  statute  of  Mississippi  de- 

Burley  v.  Harris,  8  N.  H.  235 ;  Calvin  v.  daring   all  notes   joint  and    several,   a 

Markham,    4    Miss.   343 ;    Eastman   v.  member  of  a  firm  may  be  a  coplaintiff 

Wright,  6  Pick.  (Mass.)  321 ;  Griffith  v.  in  a  suit  on  a  promissory  note  against 

Chew,  8  Serg.  &  R.  (Pa.)  30;  Green  v.  another  firm  of   which  he  is   partner, 

Chapman,  27  Vt.  236 ;  Graham  v.  Bar-  provided  he  is  not  also  joined  in  the 

ris,  5  Gill  &  J.   (Md  )  489;   Haven  v.  action  as  defendant.     Morris  v.  Hillery, 

White,  39  111.  509;   Portland  Bank  v.  7  How.  (Miss.)  61. 

Hyde,  11  Me.  196  ;  Eogers  v.  Eogers,  5  Where  three  firms,  having  each  a  dis- 

Ired.  (N.  C.)  Eq.  31 ;   Denny  v.  Metcalf,  tinct  name,  keeping  separate  books  and 

28  Me.  389.  doing  a  separate  business,  consist  of  the 

An  adjudication  in  bankruptcy  against  same  persons,  and  upon  the  bankruptcy 

persons  as  members  of  one  firm,  does  of  one  firm  its  claims  against  one  of  the 

437 


267*  ACTIONS    BY    PARTNEIIS.  [bOOK    II.^ 

Defences  to  actions  by  2ic<'>'tners  foimded  on  the  conduct  of  one  of 
them. — As  a  general  principle,  what  a  person  has  no  right  to  do 
himself  he  cannot  acquire  a  right  to  do  by  associating  others  with 
him.  (a)  Thus,  it  being  a  rule  that  a  trustee  cannot  cbini  from  his 
cestui  que  trud  compensation  for  trouble  or  loss  of  time  i-n  the  exe- 
cution of  the  trust,  it  has  been  held  that  if  one  *of  a  firm 
-*  of  solicitors  is  a  trustee,  and  the  firm  acts  as  solicitors  in 
the  matter  of  the  trust,  the  firm  cannot  claim  payment  for  his  ser- 
vices, the  disability  of  one  of  its  members  thus  extending  to  them 
all.  (6)  So,  if  one  member  of  a  firm  is  guilty  of  fraud  in  entering 
into  a  contract  on  behalf  of  the  firm,  his  fraud  may  be  relied  on  as 
a  defence  to  an  action  on  the  contract  brought  by  him  and  his  co- 
partners ;  for  their  innocence  does  not  purge  his  guilt,  (c)  So,  if 
one  partner  resident  abroad  sells  partnership  goods,  and  he  knows 
they  are  to  be  smuggled  into  this  country,  and  he  is  privy  to  their 
being  so  smuggled,  then,  although  his  copartners  are  innocent,  the 

others,  also   bankrupt,  is   sold   by   the        Mr.  Bell,  in  his  Commentaries   (vol. 

assignee  and  by  the  purchaser  proved  II.  (5th  ed.)  620),  says:  "In  Scotland 

against  the  debtor  firm,  he  cannot  after-  debts  between  companies  in  which  the 

wards    proceed    by   suit    for    the    debt  same  individual  is  a  partner  are  every 

against  either  of  the  partners.     Buckner  day  sustained,  as  quite  unexceptionable." 

V.  Calcote,  28  Miss.  432.  It  is  to  be  lamented  that  the  like  rule 

Where  a  person  is  a  member  of  two  has  not  been  incorporated  into  the  corn- 
partnerships,  his  separate  creditors  have  mon  law,  treating  the  firm,  for  the  pur- 
a  preference  over  his  interest  in  the  poses  of  the  suit,  as  an  artificial  body,  or 
property  of  one  of  the  firms  as  against  quasi  corporation.  It  would  be  highly 
creditors  of  the  other  firm.  Weaver  v.  convenient,  and  certainly  conformable  to 
Weaver,  46  N.  H.  188.  the   common    sense  of  the  commercial 

A    judgment   obtained    by   one   firm  world.     Story  Part.,  §  236,  n. 
against  another,  each  of  which  is  con-        (a)  See,  in  addition  to  the  cases  cited 

stituted  in  part  of  members  belonging  to  infra,  ante  pp.  *116,  *117,  and  Solomons 

both  firms,  thus  being  both  plaintiff  and  v.  Nissen,  2  T.  R.  674. 
defendant,  cannot  be  executed  by  a  levy        (6)  See  Broughton  v.  Broughton,  2Sm. 

upon  the  separate  property  of  an  indi-  &  G.  422,  and  5  De  G.,  M.  &  G.  160  ; 

vidual  member  of  the  defendant    firm.  Christophers  v.   White,  10  Beav.  523  ; 

Tassey  ^^  Church,  6  Watts  &S.  (Pa.)  465.  Collins  v.  Carey,  2  Id.  128;  Matthison 

Where  the  same  person  is  a  member  v.  Clarke,  3  Drew.  3.     See  the  exception- 

of  two  firms,  his  acts,  done  in  the  name  in  cases  of  litigation,     Cradock  v.  Piper, 

of  one  of  the  firms,  cannot  be  proved  in  1  Macn.  &  G.  664,  and  Re  Corsellis,  34 

an   action    against   the   other   firm,  the  Ch.  D.  675. 

same  persons  not  comprising  both  firms.        (c)  See  Kilby  v.  Wilson,  Ry.  &  M.  178. 
Kratzer  v.  L^on,  5  Pa.  St.  274. 

438 


CHAP.  III.,  §  I.]    CONDUCT  OF  ONE  PARTNER.  268* 

firm  cannot  recover  the  price  of  such  goods.  (cZ)  So,  if  one  of  sev- 
eral partners  draws  a  bill  in  his  own  name,  and  the  bill  is  accepted 
upon  condition  that  he  will  provide  for  it  when  due,  he  cannot,  by- 
endorsing  that  bill  to  the  firm  to  which  he  belongs,  entitle  himself 
and  his  copartners  to  sue  upon  it.  (e)  In  Astley  v.  Johnson  one  of 
three  partners  purchased  a  bill  in  the  partnership  name,  and  under- 
took to  pay  for  it  at  the  end  of  a  month.  He  remitted  the  bill  to 
his  copartners  in  England,  and  they  sued  upon  it.  The  bill,  how- 
ever, had  not  been  paid  for  as  agreed,  and  it  was  held  that  the 
plaintiffs  were  not  entitled  to  recover  and  were  in  no  better  position 
without  their  copartner  than  they  would  have  been  had  he  been  a 
coplaintifF  in  the  action.  (/)  4 

(d)  Biggs  V.  Lawrence,  3  T.  R.  454.  ship  to  Alzedo,  who  was  a  creditor  of 

(e)  Sparrow  v.  Chisman,  9  Barn.  &  C.  the  firm.  The  second  action  was  to  re- 
241 ;  and  see  Richmond  v.  Heapy,  1  cover  money  drawn  by  Sykes  from  the 
Stark.  202.  funds  of  himself  and  Bury,  and  paid  into 

(/)  Astley  V.  .Johnson,  5  Hurlst.  &  N.  the  hands  of  Yates,  in  further  discharge 

J37  of  the  balance  before  mentioned,  with- 

4.  Defences  to  actions  by  partners  out  the  knowledge  of  Bury.     Both  the 

founded  on    the   conduct   of  one  of  transactions  were  frauds  by  Sykes,  on 

them.— Where  one  partner,  in  the  usual  his  partner,  Bury,  and  it  must  be  taken 

course  of  business,  obtains  money  in  the  that  Yates  (at  least  when  the  bills  were 

name  of  the  firm,  the  other  partner  can-  endorsed  and  the  money  paid)  knew  the 

not  defend  on  the  ground  that  the  money  bills  and  money  came  from  the  funds  of 

was    obtained    without    his    knowledge,  Sykes  &  Bury,   without   the    knowledge 

and  fraudulently  converted  to  his  own  of  Bury.     It  may  be  doubtful  whether 

use  by  the    partner  obtaining  it.     Gil-  Young    was    actually    privy    to    either 

Christ  V.  Brande,  38  Wis.  184.  transaction  ;  but  in  our  view  of  the  case 

Lord  Tenterden.:  in  delivering  the  that  point  is  not  material.  On  behalf 
judgment  of  the  court  in  Jones  v.  Yates  of  the  defendant,  it  was  contended  that 
(9  Barn.  &  C.  532),  said  :  "These  were  Sykes  &  Bury  could  not  (if  they  had 
two  actions  brought  by  the  plaintiffs,  as  continued  solvent)  have  maintained  any 
assignees  of  Sykes  &  Bury.  The  first  action  against  Yates  &  Young,  in  re- 
was  an  action  of  trover  to  recover  the  spect  of  either  of  these  transactions; 
value  of  three  bills  of  exchange,  which  and  that,  if  that  were  so.  the  plaintiffs, 
belonged  to  Sykes  &  Bury,  and  which  their  assignees,  could  not  sue,  they  hav- 
Sykes  had  endorsed  to  the  defendants,  ing  no  better  remedy  at  law  than  Sykes 
with  whom  he  had  been  in  partnership,  &  Bury  would  have  had.  And  we  are  of 
in  part  payment  of  a  demand,  due  from  this  opinion.  It  is  unnecessary,  there- 
him  to  the  partnership  of  Sykes,  Yates  fore,  to  advert  to  any  of  the  other  points 
&  Young,  -and  by  him  again  immediate-  raised  in  the  argument  at  the  bar.  We 
ly  endorsed  in  the  name  of  that  partner-  are  not  aware  of  any  instance  in  which 

439 


268*  CONDUCT  OF  ONE  PARTNER        [bOOK  II., 

Surviving  partners  prejudiced  by  conduct  of  deceased  partner. — 
In  such  cases  as  these  the  inability  of  the  firm  to  sue  is  not  re- 
moved by  the  death  of  the  partner  who  has  created  the  inability. 

a  person  has  been  allowed,  as  plaintiff  own  misconduct,  and  make  that  miscon- 
in  a  court  of  law,  to  rescind  his  own  act  diKit  the  foundation  of  an  action  at  law. 
on  the  ground  that  such  act  was  a  fraud  Then,  if  Sykes  &  Bury  could  not  sue, 
on  some  other  person;  whether  the  how  could  the  plaintiffs,  who  represent 
party  seeking  to  do  this  has  sued  in  his  them  here?  It  was  said,  in  support  of 
own  name  only,  or  jointly  with  such  the  argument,  that  the  property  did  not 
other  person.  It  was  well  observed,  on  pass  from  Sykes  by  his  wrongful  act,  but 
behalf  of  the  defendants,  that  where  one  remained  in  Sykes  &  Bury.  This  was 
of  two  persons,  who  have  a  joint  right  of  ingeniously  and  plausibly  put;  but,  as 
action,  dies,  the  right  then  vests  in  the  against  Sykes,  the  property  did  pass  at 
survivor.  So  that,  in  this  case  (if  it  be  law,  and  there  was  no  remedy  at  law  for 
held  that  Sykes  &  Bury  may  sue),  if  Bury  to  recover  it  back  again.  He 
Bury  had  died  before  Sykes,  Sykes  could  not  do  so  without  making  Sykes  a 
might  have  sued  alone,  and  thus  for  his  party.  Further,  the  right  of  the  as- 
own  benefit  have  avoided  his  own  act,  signees  to  sue  in  this  case  was  said  to  be 
by  alleging  his  own  misconduct.  The  analogous  to  the  right  of  assignees  to  sue 
defrauded  partner  may  perhaps  have  a  for,  and  recover  back,  property  volun- 
remedy  in  equity,  by  a  suit  in  his  own  tarily  given  by  a  bankrupt  to  a  particu- 
name  against  his  partner,  and  the  per-  lar  creditor,  in  contemplation  of  his 
son  with  whom  the  fraud  was  commit-  bankruptcy,  in  favor  of  such  creditor, 
ted.  Such  a  suit  is  free  from  the  incon-  and  in  preference  to  him,  in  which  case 
sistency  of  a  party  suing  on  the  ground  the  bankiupt  could  not  have  sued,  if  no 
of  his  own  misconduct.  There  is  a  great  commission  had  issued,  yet  the  assignees 
difference  between  this  case  and  that  of  are  allowed  to  do  so.  That  is  a  case 
an  action  brought  against  two  or  more  where  the  representatives  could,  where 
partners  on  a  bill  of  exchange,  fraudu-  the  party  represented  could  not,  sue,  and 
lently  made  or  accepted  by  one  partner  it  is  the  only  instance  of  the  kind  men- 
in  the  name  of  the  others,  and  delivered  tioned  at  the  bar  that  has  occurred  to 
by  such  partner  to  a  plaintiff  in  dis-  us.  But,  if  we  attend  to  the  principle 
charge  of  his  own  private  debt.  In  the  on  which  the  assignees  are  allowed  to 
latter  case,  the  defence  is  not  the  defence  sue,  we  shall  find  there  is  no  analogy 
of  the  fraudulent  party,  but  of  the  de-  between  that  case  and  the  case  before 
frauded  and  injured  party.  The  latter  the  court ;  for  the  principle  on  which 
may,  without  any  inconsistency,  be  per-  assignees  have  been  held  entitled  to  re- 
mitted to  say,  in  a  court  of  law,,  that  al-  cover  in  such  cases  is  not  on  the  ground 
though  the  partner  may  for  many  pur-  of  fraud  on  any  particular  person,  but 
poses  bind  him,  yet,  that  he  has  no  au-  on  the  ground  that  there  has  been  fraud 
thority  to  do  so  by  accepting  a  bill  in  on  the  bankrupt  laws,  which  are  made 
the  name  of  the  firm  for  his  own  private  for  the  purpose  of  effecting  an  equal  dis- 
debt.  The  party  to  a  fraud,  he  who  tribution  of  the  insolvent's  estate  among 
profits  by  it,  shall  not  be  allowed  to  all  the  creditors,  and  which  purpose 
create  an  obligation  in  another  by  his    would  be  defeated  if  a  party  on  the  eve 

440 


CHAP.  III.,  §  I.]  FORMERLY   A   BAR.  268 

Thus,  in  Ex  parte  Bell,  {g)  one  of  a  firm  advanced  money  of  the 
firm  to  a  stranger  for  an  illegal  purpose,  and  it  was  held,  after  the 
death  of  the  partner  who  advanced  the  *money,  that  the 
survivors  could  not  recover  it  from  the  person  to.  whom  it  L  -"""^ 
was  lent.  So,  if  a  firm  has  become  bankrupt,  its  trustee  is  in 
general  in  no  better  position  than  the  partners  themselves  would 
have  been  in,  and  is  therefore  frequently  liable  to  be  defeated  on 
similar  grounds.  (A)  But  the  trustee  of  a  bankrupt  partner  can 
disaffirm  and  avoid  such  of  his  acts  as  are  fraudulent  as  against  his 
creditors,  and  consequently  acts  of  this  nature  afford  no  defence  to 
an  action  by  the  trustee  and  the  solvent  partner.  Thus,  in  Heilbut 
V.  Nevill,  (i)  a  solvent  partner  and  the  assignees  of  a  bankrupt  part- 
ner successfully  maintained  an  action  for  a  bill  of  the  firm,  given 
by  the  bankrupt  to  a  creditor  of  his  own,  under  circumstances 
which  amounted  to  a  fraudulent  preference. 

Frauds  by  one  partner  oyi  the  firm. — Owing  to  the  old  technical 
rules  relating  to  the  joinder  of  parties  to  actions,  the  principle  above 
discussed  was,  moreover,  applied  at  law  to  cases  where  it  produced 
great  injustice,  viz.,  to  cases  where  one  partner  acted  in  fraud  of  his 
copartners.  For  example,  where  a  partner  pledged  partnership 
property,  and  in  so  doing  clearly  acted  beyond  the  limits  of  his  au- 
thority, still,  as  he  could  not  dispute  the  validity  of  his  own  act,  it 
was  held  at  law  that  he  and  his  copartners  could  not  recover  the 
property  so  pledged,  [h)  So,  although  a  partner  has  no  right  to  pay 
his  own  separate  debt  by  setting  it  off  against  a  debt  due  from  his 
creditor  to  the  firm,  yet  if  he  actually  agreed  that  such  set-off  should 
be  made,  and  it  was  made  accordingly,  it  was  held  at  law  tliat  he 
and  his  copartners  could  not  afterwards  recover  the  debt  due  to  the 
firm.  {I)     So,  where  a  firm  of  tliree  partners  deposited  goods  upon 

of  a  bankruptcy,  and  with  a  view  to  it,  117.     For  tliese  reasons,  we  think  the 
could  distribute  his  effects  according  to  plaintiffs  are  not  entitled  to  recover." 
his  own  pleasure  among  some  favorite  {g)  1  Mau  &  S.  751.     See,  also,  Bran- 
creditors,  to  the  total  exclusion  of  the  don  v.  Scott,  7  El.  &  B.  237,  and  com- 
others.      This   is   mentioned    by   Lord  parelnnest).  Stephenson,  1  Moo.  &R.  147. 
Mansfield  as  the  principle  of  the  deci-  {h)  Jones  v.  Yates,  9  Barn.  &  C.  532. 
sions  in  the  early  cases  on  this  subject.  (i)  L.  R.,  4  C.  P.  354. 
Alderson  v.  Temple,  4  Burr.  2235;  Har-  {k)  Brownrigg  v.  Eae,  5  Ex.  489. 
man  v.  Fishar,  Id.  2237  ;  S.  C,  Cowp.  [l)  See  Wallace  v.  Kelsall,  7  Mees.  & 

441 


269*  CONTROL  OF  ONE  PARTNER         [bOOK  II., 

the  terms  that  they  were  not  to  be  parted  with  except  on  the  joint 
authority  of  all  three  partners,  and  they  were  nevertheless  given  up 
to  one  of  them,  it  was  held  at  law  that  the  firm  could  sustain  no 
action  for  the  recovery  of  the  goods.  (?n)  In  such  cases,  as  observed 
by  Lord  Tentcrden,  in  Jones  v.  Yates,  (n)  there  is  no  instance 
*"  in  which  a  person  has  been  allowed  as  plaintiff  in  a  court 
-I  of  law  to  rescind  his  own  act,  on  the  ground  that  such  act 
was  a  fraud  on  some  other  ])erson,  whether  the  party  seeking  to  do 
this  has  sued  in  his  own  name  only,  or  jointly  with  such  other 
person." 

In  such  cases  as  these,  however,  relief  might  have  been  had  in 
equity  ;  (o)  and  it  is  apprehended  that  the  cases  at  law  above  referred 
to  can  no  longer  be  relied  upon,  the  Judicature  acts  having  re- 
moved the  technical  difficultios  which  led  to  their  decision. 

If  a  partner  in  collusion  with  a  debtor  to  the  firm  gives  him  a 
receipt  for  his  old  debt  although  no  payment  or  anything  equivalent 
to  payment  is  made,  an  action  for  the  recovery  of  the  debt  is  never- 
theless maintainable  by  the  firm,  i.  e.,  by  the  partner  giving  the 
receipt  and  his  copartners,  (p)  For  a  receipt  does  not  preclude  the 
person  giving  it  from  showing  that  the  money  therein  expressed  to 
be  received  was  not  in  fact  received,  (g)  nor  does  it  discharge  the 
debt.  Again,  a  right  of  set-off  which  might  be  pleadable  to  an 
action  brought  by  one  partner  is  not  pleadable  to  an  action  by  him 
and  his  copartners  ;(r)  nor,  if  one  partner  covenants  not  to  sue  for  a 
partnership  debt,  will  this  preclude  him  from  joining  with  his 
copartners  in  an  action  for  the  recovery  of  that  debt,  (s)  In  each 
of  these  cases  there  is  only  a  right  of  cross  action  against  the  one 
partner  ;  and  although  such  right  might  be  relied  on  as  a  defence  to 

W.  264 ;  Gordon  v.  Ellis,  7  Man.  &  G.  Midland    Counties  Rail.  Co.,  28   Beav. 

607.     Compare  Kendal  v.  Wood,  L.  R.,  287. 

6  Ex.   243,   where   the    technical   diffi-  (/:>)  Henderson  u.  Wild,  2  Camp.  561 ; 

cnlty  did  not  arise.  Farrar  v.  Hutchinson,  9  Ad.  &  E.  641. 

(m)  Brandon  v.  Scott,  7  El.  &  B.  234.  (7)  Skaife  v.  Jackson,  5  Dowl.  &  R. 

(n)  9  Barn,  i^  C.  532,  and  see  Rich-  290,  and  3  Barn.  &  C.  421. 

mond  V.  Heapy,  1  Stark.  202.  (r)  See  infra,  book  II.,  ch.  3,  §  2. 

(0)  Piercy   v.   Fynney,    12    Eq.    69;  (s)  See  Walmsley  v.  Cooper,  11  Ad. 

Midland  Counties   Rail.  Co.  v.  Taylor,  &  E.  216. 
8  H.  L.  Cas.  751,   affirming  Taylor  v. 

442 


CHAP.  III.,  §  I.]  OVER   ACTIONS.  270* 

an  action  by  him  alone,  it  is  held  not  to  affect  the  firm  to  which  he 
belongs.  5 

Result  of  the  deGisions. — The  conclusion  to  be  drawn  from  the 
foregoing  cases  appears  to  be  that  the  conduct  of  one  partner  affords 
a  defence  to  an  action  by  him  and  his  copartners,  or  by  them  with- 
out him,  where  they  are  bound  by  this  act,  either  by  adopting  and 
seeking  the  benefit  of  it,  (^)  or  upon  the  ground  that  it  is,  on 
*ordinary  principles  of  agency,  the  act  of  the  firm,  and  r^.-,--. 
binding  upon  him  and  his  copartners  accordingly.  But 
the  cases  at  law  which  go  further  than  this  cannot,  it  is  submitted, 
be  now  relied  upon. 

Power  of  one  partner  to  ad  for  the  firm. — The  power  of  one  part- 
ner to  act  for  the  firm  in  legal  proceedings  may  be  conveniently 
noticed  in  the  present  place.6 


o.  Frauds  by  one  partner. — Where 
one  of  two  partners  makes  fraudulent 
representations,  whereby  goods  are  ob- 
tained and  consigned  to  his  partner,  re- 
plevin in  the  cepit  lies  against  botli. 
Olmsted  v.  Hotailing,  1  Hill  (X.  Y.j 
31.7. 

(0  As  in  Ex  parte  Bell,  1  Man.  &  S. 
751 ;  Broiighton  v.  Broughton,  5  De  G., 
M.  &  G.  160. 

6.  Power  of  one  partner  to  act  for 
the  firm. — Though  partners  may  bind 
each  other  in  the  course  of  trade,  they 
cannot  compel  each  other  to  appear  in 
suits,  nor  undertake  to  represent  each 
other  in  courts  of  law.  Hills  v.  Ross,  3 
Dall.  (U.  S.)  331.  But  when  a  suit  is 
commenced  against  a  firm,  one  of  the 
partners  has  power  to  employ  an  at- 
torney to  attend  to  the  suit ;  and  an  ap- 
pearance, entered  by  such  an  attorney, 
will  be  binding  upon  the  other  partners. 
Bennett  v.  Stickney,  17  Vt.  531. 

Partners  cannot,  by  articles  of  agree- 
ment between  themselves,  invest  such 
person  as  a  majority  of  them  shall  after- 
wards appoint  with  power  to  sue  in  his 
own  name  for  moneys  agreed  to  be  con- 


tributed by  each  partner  to  the  general 
fund.  Fortune  v.  Brazier,  10  Ala.  79L 
A  promise  to  one  of  a  firm,  to  refund 
money  belonging  to  the  firm,  inures  to 
the  benefit  of  the  firm,  and  an  action  for 
it  should  be  brought  by  the  firm.  Creel 
V.  Bell,  2  J.  J.  Marsh. V^y.)  309. 

Where,  by  the  terms  of  the  partner- 
ship agreement,  one  of  the  partners  is 
to  provide  a  certain  sort  of  merchandise 
for  the  firm,  and  he  contracts  therefor 
individually,  the  seller  may  sue  him 
alone  or  sue  the  firm,  at  his  option. 
Sylvester  i'.  Smith,  9  Mass.  119. 

Both  partners  must  join  in  an  action 
of  replevin  for  property  attached  on  a 
writ  against  one  of  them  only ;  non- 
joinder of  one  in  such  a  case  may  be 
pleaded  in  bar.  Fay  v.  Duggan,  135 
Mass.  242 ;  Saul  v.  Kruger,  9  How.  (N. 
Y.)  Pr.  569-. 

Where  a  debt  due  a  partnership  is  as- 
signed to  one  of  the  partners,  all  the 
partners  must  be  joined  in  a  bill  to  re- 
cover the  debt.  Gaither  v.  Caldwell,  1 
Dev.  &  B.  (N.  C.)  Eq.  504;  Russell  v. 
Swan,  16  Mass.  314. 


443 


271* 


CONTROL   OF   ONE    PARTNER 


[book  II., 


One  partner  suing  in  the  name  of  the  firm. — A  partner  may  sue  in 
the  name  of  himself  and  copartners  without  their  consent,  (w)  but 
if  he  sues  against  their  consent  he  must  indemnify  them  against  the 
costs,  {x)  So,  one  partner  may  defend  an  action  brought  against  the 
firm,  indemnifv'ing  the  firm  against  the  consequences  of  so  doing,  if 
he  acts  against  the  will  of  the  other  partners,  (y)  7 


(m)  Whitehead  v.  Hughes,  2  Cromp.  the  claim,  of  whidi   fact   the  account 

&M.  318;  and  see  Harwood  u.  Edwards,  contained   a   recital   declaring   that   he 

Gow  on  Part.  65,  note,  where   it  was  alone  was  entitled  to  the  benefit  of  the 

held   by  Chappie,  J.,  that   the   action  lien.     Jones  v.  Hurst,  67  Mo.  568. 

must  be  considered  as  brought    by  all.  When  a  suit  is  commenced  against  a 

See  below,  note  {z).  firm,  one  of 'the  partners  has  power  to 

(x)  Whitehead  v.  Hughes,  2  Cromp.  employ   an   attorney   to   attend    to   the 

&  M.  318.  suit;    and   an    appearance,   entered    by 

(y)  In  Goodman  v.  De  Beauvoir  (12  such  attorney,  will  be  binding  upon  the 

Jur.  989  and  1037)  a  solicitor  employed  other  partners.     Bennett  v.  Stickney,  17 

by  a  managing  committee  to  defend  a  Vt.  531.     See,  also,  Wheatley  v.  Tutt,  4 

suit  was  held  authorized  to  enter  an  ap-  Kan.  240. 

pearance  for  a  member  of  a  provisional  The  entry  by  an  attorney,  of  his  gen- 
committee,  who  had  made  the  man-  eral  appearance  for  the  defendants,  in 
aging  committee  his  agents.  See,  fur-  an  action  against  a  partnership,  must  be 
ther,  as  to  the  authority  of  one  partner  construed  to  be  an  appearance  for  the 
to  enter  an  appearance  for  his  copart-  partners  as  partners,  and  for  the  pur- 
ner,  Harrison  v.  Jackson,  7  T.  R.  207 ;  pose  of  defending  the  action  against  the 
Morley  v.  Stronibom,  3  Bos.  &  P.  254 ;  partnership,  and  not  as  an  appearance 
Goldsmith  v.  Levy,  4  Taunt.  299.  The  for  the  partners  individually,  severally 
authority  has  been  doubted  in  America,  and  personally,  so  as  to  render  a  judg- 
See  Hall  v.  Lanning,  1  Otto  (U.  S.)  ment  against  the  partnership,  in  such 
160.  action,  binding  on  an  individual  part- 

7.  One  partner   suing  in  name  of  ner  in  another  jurisdiction,   by  whom 

firm. — The  right  of  a  partner  to  collect  such    appearance    was    not    authorized, 

the   debts    of  the   partnership,    and    to  Phelps  v.  Brewer,  9  Cush.  (Mass.)  390. 

commence  suits  for  that  purpose,  is  an  After  the  dissolution  of  a  partnership, 

incident  to  the  partnership,  which  sur-  one  of  the  parties  cannot  authorize  an 

vives  the  dissolution,  and  is  inherent  in  appearance    for    the   other.     Haslet   v. 

either  partner.     Ward  v.  Barber,  1   E.  Street,  2  McCord  (S.  C.)  311 ;  Loomis  v. 

D.  Smith  (N.  Y.)  423.  Pearson,  Harp.  (S.  C.)  470. 

Any  partner  has  the  right  to  use  the  One  partner  has  no  authority,  after 
firm  name  in  perfecting  a  mechanic's  dissolution,  unless  specially  given,  to  re- 
lien  for  the  firm  ;  and  the  validity  of  tain  an  attorney  to  defend  the  other 
Buch  lien  is  not  impaired  by  the  fact  members  of  the  late  firm  in  an  action 
that  before  the  filing  of  the  account  for  brought  against  them.  Bowler  v.  Hus- 
that  purpose  in  the  firm  name,  one  of  ton,  30  Gratt.  (Va.)  266. 
the  partners  had  become  sole  owner  of 

444 


CHAP.  III.,  §  I.]  OVER   ACTIONS.  271* 

One  partner  staying  proceedings. — But  if  i't  is  competent  for  one 
partner  to  sue  for  the  firm,  it  is  as  competent  to  any  other  partner 
to  stay  proceedings  or  to  put  an  end  to  the  action  altogether  by 
means  of  a  release ;  and  although  the  court  will  not  allow  this  to 
be  done  by  collusion  with  the  defendant  for  the  purpose  of  defraud- 
ing the  other  partners  of  their  rights  (see  ante  p.  *145),  a  release  will 
be  effectual  where  there  is  no  fraud  in  the  case. 

In  Harwood  v.  Edwards  {z)  one  of  three  partners,  without  the 
knowledge  or  consent  of  the  other  two,  brought  an  action  in  his 
name  and  theirs  for  the  recovery  of  a  debt  due  to  the  firm.  The 
other  two  afterwards  agreed  with  the  defendant  that  proceedings 
should  be  stayed,  and  the  court  held  that  this  agreement  bound  all 
three,  and  proceedings  were  stayed  accordingly,  although  the  part- 
ner who  promoted  the  action  disputed  the  validity  of  the  agree- 
ment, and,  by  the  partnership  articles  it  had  been  agreed  between 
the  partners  that  one  *of  them  should  not  give  a  release 
-^  without  the  assent  of  the  others. 

Consenting  to  arbitration. — If  an  action  is  brought  for  the  re- 
covery of  a  debt  due  to  the  firm,  one  of  the  partners  cannot  bind 
the  firm  by  consenting  to  a  judge's  order  referring  all  matters  in 
difference  between  the  plaintiffs  and  the  defendant  to  arbitration,  (a) 

Consenting  to  judgment,  &g. — In  an  action  against  a  firm  it  has 
been  held  that  one  partner  has  no  authority  to  bind  the  firm  by  con- 
senting to  an  order  for  judgment  against  it,  (6)  or  by  giving  a 
cognovit  to  pay  the  debt  and  costs,  (c)  But  a  warrant  of  attorney 
executed  by  one  partner  in  the  name  of  the  firm,  with  the  consent 
of  the  other  partners,  is  not  invalid,  simply  because  the  others 
have  not  executed  it.  [d]  8 

(2)  Gow  on  Part.  65,  note.  cannot  bind  his  copartners  by  a  confes- 

(a)  Hatton  v.  Royle,  3  Hurlst.  &  N.  sion  of  judgment,  without  their  consent. 

500.  Christy  ;,■.  Sherman,  10  Iowa  535 ;  Ed- 

(6)  Hambridge  v.  De  la  Croupe,  3  C.  wards  v.  Pi.tzer,  12   Id.  607  ;  North  v. 

B.  742.     See,  also,  Munster  v.  Cox,  10  Mudge,  13  Id.  496;   Crane  d.  French,  1 

App.  Cas.  680.  Wend.  (N.  Y.)  311 ;   Barlow  v.  Reno,  1 

(c)  Rathbone  v.  Drakeford,  4  Moo.  &  Blackf.  (Ind.)  252;  Everson  v.  Gehrman, 

P.  57,  and  6  Bing.  375.  1  Abb.  (N,  Y.)  Pr.  167 ;  Shedd  v.  Bank, 

(rf)  Brutton  V.  Burton,  1  Chitty  707.  &c.,   32   Vt,  709;    Remington  v.  Cum- 

8.  Consenting  to  judgment,  &c. —  mings,    5  Wis.    138.     To  the  contrary. 

The  general  rule  is  that   one   partner  Lahey  v.  Kingon,  13  Abb.  (N.  Y.)  Pr. 

445 


272= 


SERVICE    ON    ONE    PARTXER, 


[book    II., 


Costs. — If  in  an  action  costs  are  ordered  to  be  paid  to  one  part- 
ner, payment  to  another  partner  is  not  sufficient,  (e) 

Service  on  one  partner. — One  partner  is  not  the  agent  of  his  co- 


192;  22  How.  Pr.  209.  Such  judgment 
will  bind  the  partner  who  confessed  it, 
and  be  void  as  to  the  others.  Bennett  v. 
Marshall,  2  Miles  (Pa.)  436;  Bitzer  v. 
Shunk,  1  Watts  &  S.  (Pa.)  340;  Herrick 
V.  Conant,  4  La.  Ann.  276 ;  Mitchell  v. 
Kich,  1  Ala.  228;  Morgan  v.  Richardson, 
16  Mo.  409 ;  Sloo  v.  State  Bank,  1  Scam. 
VIU.)  428;  York  Bank's  Appeal,  36  Pa. 
St.  458. 

Tlius,  a  prior  judgment  confessed  by 
two  of  three  parti>3rs,  for  a  firm  debt,  is 
a  lien  upon  the  interest  of  the  two  in  the 
firm  property,  and  is  superior  to  subse- 
quent judgments  recovered  against  the 
whole  firm.  Stevens  v.  Bank  of  Central 
New  York,  31  Barb.  (N.  Y.)  290. 

Where  one  of  the  partners  of  a  firm 
executed  a  warrant  of  attorney,  under 
seal,  for  himself  and  as  attorney  for  his 
partner,  authorizing  the  confession  of  a 
judgment,  the  court  refused  to  set  aside 
the  judgment  on  the  sole  application  of 
the  defendant,  who  had  executed  the 
warrant  of  attorney.  St.  John  v.  Holmes. 
20  Wend.  (N.  Y.)  609. 

A  declaration  was  served  on  one  part- 
ner only,  and  he  employed  an  attorney, 
and  authorized  him  to  give  a  cognovit, 
which  he  did  for  both,  in  good  faith. 
The  attorney  being  responsible,  the  court 
refused  to  set  aside  the  judgment,  but 
permitted  the  partner  who  had  not  been 
brought  in  to  contest  the  validity  of  the 
claim.  Grazebrook  v.  McCreedie,  9 
Wend.  (N.  Y.)  437.  Otherwise,  where 
the  attorney  is  irresponsible.  Groesbeck 
V.  Brown,  2  How.  (N.  Y.)  Pr.  21. 

Where  partners  are  sued,  one  of  them 


has  no  power  to  offer  judgment  under 
the  code,  on  behalf  of  himself  and  his 
copartner,  without  some  evidence  that 
his  copartner  authorized  him  to  make 
the  offer  or  assented  to  it,  but  the  ap- 
pearance of  an  attorney  for  both  on  the 
record  may  make  the  judgment  regu- 
lar. Binney  v.  Legal,  19  Barb.  (N.  Y.) 
592. 

Under  Oregon  Code  202,  |  252,  a  judg- 
ment Vw  confession  of  one  partner  does 
not  bind  his  copartners  in  the  partner- 
ship property,  unless  made  in  an  action 
pending.  Richardson  v.  Fuller,  2  Oreg. 
179. 

A  confession  of  judgment  by  one  part- 
ner for  a  partnership  debt,  does  not  dis- 
charge the  other  partners  from  liability 
for  the  same  debt,  since  the  act  of  April 
6th,  1830.  Kauffman  i'.  Fisher,  3  Grant 
(Pa.)  Cas.  302 

But  the  other  partners  may  ratify  the 
act  of  the  one  confessing  the  judgment. 
Thus,  where  a  warrant  of  attorney  to 
confess  a  judgment  was  executed  in  the 
firm  name  of  the  defendants,  it  was  held, 
on  error,  that  the  court  would  intend 
that  the  warrant,  although  executed  by 
one  partner  only,  was  adopted  by  the 
others.  Bissell  v.  Carville,  6  Ala.  503. 
And  where  a  bond  with  a  warrant  to 
confess  judgment  is  executed  by  one 
partner,  and  subsequently  all  the  part- 
ners revive  the  judgment  by  their  at- 
torney, it  is  a  ratification.  Overton  v. 
Tozer,  7  Watts  (Pa.)  331 ;  Cash  v.  Tozer, 
1  Watts  &  S.  (Pa.)  519.  So,  also,  a 
judgment  confessed  by  one  of  two  co- 
partners, using  a  corporate  namae,  my 


(e)  Showier  i;.  Stoakes,  2  Dowl.  &  L.    court,  see  the  Sup.  Ct.  Funds  Rules,  1886, 
3.     But  as  to  payment  out  of  money  in    r.  63. 

446 


OHAP.  411.,  §  I.]  AVIIEX    BINDS    THE    FIRM. 


272* 


partner,  except  as  to  partnership  matters  ;  and  if  one  partner  is 
sued  in  respect  of  some  private  affair  of  his  own,  he  must  be  pro- 
ceeded against  like  any  other  individual,  and  service  of  writs,  &c., 
must  be  made  accordingly,  and  they  must  not  be  left  at  the  place 
of  business  of  the  firm  to  be  served  on  the  other  partners.  (/)  And 
even  in  proceedings  relating  to  partnership  matters,  although  ser- 
vice on  one  partner  is  sometimes  held  equivalent  to  service  on  all. 


bind  the  other,  if  the  circumstances  cre- 
ate a  belief  that  he  knew  of  it  and  in- 
tended to  be  bound.  Bivingsville 
Manuf.  Co.  V.  Bobo,  11  Rich.  (S.  C.) 
386. 

In  some  jurisdictions  one  partner 
may  bind  the  firm  by  this  means. 
Thus,  under  N.  Y.  Laws  1833,  395, 
ch.  271,  judgment  against  partners  may 
be  entered,  upon  service  on  and  con- 
fession by  one  only ;  but  will  be  a 
lien,  and  can  be  enforced  only  against 
the  joint  property  of  the  defendants, 
and  the  individual  property  of  the 
defendant  served.  Kidd  v.  Brown,  2 
How.  (N.  Y.)  Pr.  20;  Stoutenburgh 
V.  Vandenburgh,  7  Id.  229.  Compare, 
also,  Matter  of  Lowenstein,  7  How. 
(N.  Y.)  Pr.  100. 

A  judgment  against  one  partner  is  a 
bar  to  an  action  against  both  partner^, 
though  the  new  defendant  was  a  dor- 
mant partner  not  discovered  till  after 
the  judgment.  Smith  v.  Black,  9  Serg. 
&  R.  (Pa.)  142. 

A  judgment  confessed  by  one  partner 
in  favor  of  his  copartner,  to  secure  him 
for  capital  advanced  to  the  concern,  is 
valid  against  the  judgment  of  a  private 
creditor  of  the  partner  who  confessed 
the  judgment.  Purdy  v.  Lacock,  6  Pa. 
St.  490. 

Though  one  partner  cannot  confess  a 
judgment  against  another  partner,  even 
for  a  partnership  debt,  yet  a  creditor  of 


the  firm  cannot  be  permitted  to  make 
objection  to  the  judgment  on  that  ac- 
count; and  a  sale  of  partnership  prop- 
erty, on  an  execution  issuing  from  such 
judgment,  will  pass  a  perfect  title  t«> 
the  purchaser  ;  and,  if  the  first  lien,  will 
be  entitled  to  the  proceeds  of  the  sale ; 
but  the  judgment  will  not  aflect  the 
persons  nor  the  separate  property  of  the 
other  partners.  Grier  v.  Hood,  25  Pa. 
St.  430 

In  Ross  V.  Howell  (84  Pa.  St.  129) 
it  was  held  that  the  interest  of  all 
the  partners  in  the  firm  property  may 
be  sold  under  an  execution  upon  a 
judgment  confessed  by  a  single  part- 
ner in  the  firm  name,  and  for  a  firm 
debt. 

An  injunction  issued  in  a  suit  by  a 
partner,  prohibiting  the  other  partners 
from  meddling  with  the  partnership 
property,  will  not  prevent  creditors  of 
the  firm  from  proceeding  at  law  to  re- 
cover their  debts,  nor  will  it  restrict  any 
member  of  the  firm  from  confessing  a 
judgment  to  such  creditors,  so  as  to  give 
them  preference  in  payment.  Hewitt  v. 
Patrick,  26  Tex.  326. 

(/)  See  Petty  v.  Smith,  2  You.  &  J. 
Ill ;  Fairlie  V.  Quin,  1  Smythe  189.  See, 
as  to  substituted  service,  Lees  v  Martin, 
13  Eq.  77,  and,  as  to  delivering  a  solici- 
tor's bill  of  costs,  Eggington  v.  Cum- 
berledge,  1  Ex.  271. 


447 


272*                                 SERVICE    ON    ONE    PARTNER,  [bOOK    II., 

this  is  not  the  case  where  the  service  is  relied  on  as  tlie  foundation 
of  process  of  contempt  or  of  any  proceedings  of  a  penal  nature,  {g)^ 

♦Having  made  these  general  observations,  it  will  be  con-  p^^^<, 

venient  to   consider,   in   the  first  place,  the  general  rules  '• 

{g)  Young  v.  Goodson,  2  Euss.  255;  all   the  defendants,  when   process  was 

and  see  Moulston  v.  Wire,  1  Dowl.  &  L.  served    on    a    portion   of    them    only. 

527  ;  Re  Holiday,  9  Dowl.  1020 ;  Grant  Shapard  v.  Lightfoot,  56  Ala.  506. 

V.   Prosser,  Sm.   &   B.  95;    Murray   v.  As  to  the  effect  of  the  acceptance  of 

Moore,  1  Jones  Ir.  Ex.  129 ;  Nolan  v.  service  of  process  by  one  partner,  see 

Fitzgerald,  2  Ir.  C.  L.  R.  79;  Kitchen  Bowen  v.  Sutherlin,  44  Ala.  278;  Clark 

r.  Wilson,  4  C.  B.  (N.  S.)  483.     In  Leese  v.   Stoddard,   3    Ala.   366;    Demott    v. 

V.  Martin,  13  Eq.  77  ;  Carrington  v.  Can-  Swain,  5  Stew.  &  P.  (Ala.)  293  ;  Bright 

tillon,  Bunb.  107 ;  and  Coles  v.  Gurney,  v.  Sampson,  20  Tex.   21 ;    Freeman    v. 

1  Mad.  187,  service  of  a  bill  on  one  part-  Carhart,  17  Ga.  348. 

ner  was  allowed,  the  other  being  abroad  ;  In  some  jurisdictions,   however,  the 

and  in  ejectment  against  a  firm,  service  rule  is  not  strictly  applied.     Thus,   in 

on  an  acting  partner  is  sufficient  (Doe  t;.  Iowa,  service   upon   one  member  of  a 

Roe,  9  Dowl.  1039),  and  in  an  action  firm  is  sufiicient  to  give  the  court  juris- 

against  a  firm  on  its  promissory  note,  the  diction  over  the  other  members  of  the 

order  to  compute  (after  judgment  by  de-  firm.     Gregory    v.    Harmon,    10    Iowa 

fault),  need  only  be  served  on  one  of  445 ;    Walker  v.   Clark,   8    Iowa    474 ; 

the    defendants.      Fiegins    v.    Ward,    2  Saunders  v.  Bentley,  Id.  516. 

Cromp.  &  M.  424 ;  Carter  v.  Southall,  3  In  Louisiana,  persons  associated   to- 

Mees.  &  W.  128.  gelher  for   carrying    personal  property 

9.  Service  on  one  partner,  when  for  hire  in  vessels,  are  commercial  part- 
binds  the  firm. — The  weight  of  au-  ners,  and  may  be  cited  in  the  manner 
thority  is  to  the  effect  that  service  of  prescribed  for  the  citation  of  such  as- 
process  on  one  partner,  in  an  action  sociations ;  but  it  is  only  where  they  are 
against  the  firm,  is  not  equivalent  to  associated  together  under  a  title,  or  as  a 
service  upon  all.  Beal  v.  Snedicor,  8  firm,  that  the  service  of  a  citation  ad- 
Port.  (Ala.)  523;  Duncan  v.  Tombeck-  dressed  to  the  partnership  in  its  social 
bee  Bank,  4  Port.  (Ala.)  181;  Demoss  name,  made  on  one  of  its  members  only, 
v.  Brewster,  12  Miss.  661;  Faver  v.  is  sufficient.  Hefferman  d.  Brenham,  1 
Briggs,  18  Ala.  478  ;  Rice  v.  Doniphan,  La.  Ann.  146.  Thus,  suit  being  brought 
4  B.  Mon.  (Ky.)  123;  Scott  v.  Bogart,  against  R.  F.  and  C.  W.,  as  composing 
14  La.  Ann.  261.  And  will  not  be  notice  the  commercial  firm  of  R.  F.  &  Co.,  and 
to  them.  Demoss  v.  Brewster,  12  Miss,  the  petition  and  citation  served  on  R. 
661.  F.  alone,  it  was  held  that  the  service  of 

In  Alabama,  in  an  action  against  a  citation  was  sufficient  as  to  both  part- 
firm,  setting  «ut  the  individual  names  ners.  Kearney  v.  Fenner,  14  La.  Ann^ 
of  the  several  partners,  the  present  stat-  870. 

ute  (Rev.  Code,  |  2538),  unlike  the  In  some  other  states,  also,  firm  prop- 
former  (Clay's  Dig.  323,  I  63),  does  not  erty,  or  the  separate  property  of  the 
authorize  a  judgment  by  default  against  partner  served,  may  be  subjected  to  the 

448 


CHAP.  III.,  §  I.]  WHEN    BINDS   THE    FIRM. 


273^ 


which  apply  to  actions  by  and  against  partners  when  there  has  been 
no  change  in  the  firm  between  the  time  when  the  right  sought  to  be 


debts  of  the  firm  by  service  of  citation 
on  one  member  of  the  firm.  Alexander 
V.  Stern,  41  Tex.  193;  Hale  v.  Van 
Saun,  18  Iowa  19;  Flannery  v.  Ander- 
son, 4  Nev.  437  ;  Brooks  v.  Mclntyre,  4 
Mich.  316;  Kidd  v.  Brown,  2  How.  (N. 
Y.)  Pr.  20;  Stoutenburgh  v.  Vander- 
burgh, 7  Id.  229.  See,  also.  In  re  Low- 
enstein,  7  How.  (N.  Y.)  Pr.  100. 

Even  after  dissolution  such  service 
has  been  held  good.  Thus,  it  has  been 
decided  that  wliere  a  firm  or  its  sur- 
vivors are  sued,  it  is  not  necessary  to 
pray  process  against  all  of  them,  nor  is 
a  return  of  non  est  inventus  necessary  to 
bind  the  interests  in  the  partnership 
effects  of  those  not  served  (Printup  v. 
Turner,  65  Ga.  71),  and  that  a  service 
of  notice  upon  one  member  of  a  firm 
after  dissolution,  if  sued  as  partners, 
would  be  sufficient  to  give  the  court 
jurisdiction  of  the  parties,  so  far  as  to 
authorize  a  judgment  against  the  firm, 
as  such,  to  be  satisfied  out  of  the  joint 
property,  or  the  separate  property  of  the 
partner  served.  Hale  v.  Van  Saun,  18 
Iowa  19. 

But  the  better  opinion  is  that  after 
the  dissohition  of  the  partnership,  ser- 
vice upon  one  of  the  partners,  in  an  ac- 
tion against  all  as  late  partners,  is  not  a 
service  upon  the  others.  Beal  v.  Snedi- 
cor,  8  Port.  (Ala.)  523  ;  Faver  v.  Briggs, 
18  Ala.  478.  Thus,  a  service  made  on 
one  partner  after  dissolution  is  clearly 
insuflScient  in  a  case  where  the  interest 
of  the  partner  upon  whom  tlie  service  is 
made  is  adverse  to  that  of  the  partners 
who  are  not  served  with  notice.  Stephens 
V.  Parkhurst,  10  Iowa  70.  And  a  judg- 
ment rendered  in  a  sister  state  against 
all  the  members  of  a  firm  after  dissolu- 
tion, does  not  personally  bind  a  partner 


not  served  and  who  did  not  appear  in 
the  case,  although  the  other  partners 
were  served,  or  appeared  and  caused  an 
ajipearance  to  be  entered  for  all.  Bow- 
ler V.  Huston,  30  Gratt.  (Va.)  266.  So, 
also,  where  a  defendant  is  sued  as  silent 
partner  in  a  commercial  firm,  service  of 
citation  on  the  clerk  of  the  firm  is  not 
sufficient.  Eidge  v.  Alter,  14  La.  Ann. 
866. 

Rights  of  those  not  served. — Where 
one  only  of  a  firm  is  served,  the  judg- 
ment will  bind  the  firm's  real  estate  and 
that  of  the  partner  served,  but  will  not 
bind  the  separate  property  of  those  not 
served.  Patten  v.  Cunningham,  63  Tex. 
666. 

Where  a  state  statute  provides  that  in 
suits  against  two  or  more  jointly  in- 
debted, the  judgment  shall  be  evidence, 
as  against  those  not  served  with  process, 
only  of  the  extent  of  the  plaintifi''s  de- 
mand, the  original  demand  against  the 
parties  not  brought  into  court  is  not 
merged  in  the  judgment  against  those 
who  were.  Mason  v.  Eldred,  6  Wall. 
(U.  S.)  231. 

Two  of  several  mining  partners  mort- 
gaged their  interest  in  the  mining  prop- 
erty to  plaintiff",  and  subsequently  de- 
fendants brought  an  action  against  the 
partnership  for  supplies  furnished.  Two 
of  the  partners  were  not  served  with 
summons,  and  did  not  appear.  The 
action  was  not  brought  under  Code 
Civil  Pro.  Cal.,  |  388,  which  provides 
for  the  suing  of  associates  transacting 
business  under  a  common  name,  by  such 
name;  service  upon  one  being  service 
upon  all,  and  the  judgment  binding  the 
joint  property  of  all  the  associates. 
Held,  that  under  Code  Civil  Pro.  Cal., 
§  414,  providing  that  "where  an  action 


449 


29 


273*  SERVICE  ON  ONE  PARTNER.         [bOOK  II., 

enforced  accrued,  and  the  time  when  proceedings  are  taken  to  en- 
force it;  and  th.cn  to  consider  liow  far  those  rules  apply  or  have  to 
be  modified  when  a  change  has  taken  place. 

is  against  two  or  more  defendants,  name,  and  citation  was  served  on  but  one 
jointly  or  severally  liable,  and  the  sum-  of  the  two  owners,  the  judgment,  though 
mons  is  served  on  one  or  more,  but  not  rendered  against  the  part  owner  who 
on  all,  the  plaintiff  may  proceed  against  was  cited,  and  against  the  steamer  itself, 
the  defendants  served  in  the  same  man-  cannot  be  executed  by  seizing  the  whole 
ner  as  if  they  were  the  only  defendants,"  boat.  The  part  owner  who  was  not 
the  partners  not  served  were  not  bound  cited,  and  made  no  appearance,  must  be 
by  the  judgment,  and  the  partners  who  regarded  as  a  stranger  in  the  proceed- 
were  bound  having  mortgaged  their  in-  ings ;  and  he  may,  by  an  opposition, 
terest  to  plaintiff  before  the  judgment  under  article  395  e<  seg.  of  the  Louisiana 
was  obtained  by  defendants,  such  mort-  Code  of  Practice,  arrest  the  sheriff  in 
gage  was  a  prior  lien  upon  the  prop-  any  attempt  to  seize  his  share  of  the  boat 
erty.  Golden  State  and  Miners'  Iron  to  satisfy  the  judgment;  and  he  is  not 
Works  V.  Davidson  (Cal.),  15  Pac.  Rep.  bound  to  notice  the  proceedings  until 
20.  an  attempt  is  made  to  seize  liis  share  of 

Where,  in  a  suit  against  partners  on    the  boat.     Hefferman  v.  Brenham,  1  La. 
a  partnership  debt,  there  is  a  regular    Ann.  146. 

return  of  service  as  to  one,  and  no  re-  Where  a  suit  is  brought  against  a  firm, 
turn  whatever  as  to  the  other,  the  lat-  the  name  of  one  of  the  partners  com- 
ter  may  come  in  even  as  late  as  the  reg-  posing  which  is  alleged  to  be  unknown, 
ular  trial  term,  acknowledge  due  ser-  a  judgment  cannot  be  rendered  against 
vice,  waive  copy  and  previous  entry  of  the  firm  so  far  as  concerns  the  unknown 
service,  and  consent  that  the  case  then  partners ;  but  where  the  other  partner, 
stand  for  trial.  Judgment  rendered  at  not  liaving  been  personally  cited,  ap- 
or  after  the  second  term  succeeding  the  peared  and  filed  a  general  denial,  and, 
entering  and  signing  of  such  acknowl-  upon  judgment  being  rendered  against 
edgment  on  the  declaration  will  affect  the  firm,  appealed  as  a  partner,  it  was 
third  persons  the  same  as  if  the  evi-  held  that  he  was  bound  by  the  decree, 
dence  of  service  had  been  complete  in  Grieff  i'.  Kirk,  15  La.  Ann.  320. 
the  first  instance.  Oates  v.  Brown,  59  If  firm  property  has  been  bona  fide 
(ja.  711.  conveyed  to  one,  it  cannot  be  subjected 

In  an  action  against  partners,  on  only  to  a  judgment  against  the  firm  to  which 
a  part  of  whom  process  lias  been  served,  he  was  not  made  a  party,  U|ion  a  mere 
a  plea  filed  for  defendants  generally,  suggestion,  on  an  attempt  to  levy  on  the 
without  naming  them,  will  not  be  coo-  property,  that  he  was  a  copartner,  as 
sidered  as  the  plea  of  all.  Boyce  v.  that  would  be  to  bind  him  as  partner 
Watson,  3  J.  .J.  Marsh.  (Ky.)  498.  without  notice  of  suit,  and  without  any 

Where,  in   an  action  on  a  claim   for    regular  proceeding  against  him  as  such, 
supplies  furnished  to  a  steamer,  the  pro-    Strong  ?■.  Ilines,  35  Miss  201. 
ceedings  are  not  in  rem,  and  the  owners        Incidental  matters  of  practice— If 
are    not   shown    to    have   had    a   social    all  the  partners  made  defendants  in  an 

450 


€HAP.  III.,  §  I.]  ACTIONS   BY   PARTNERS.  273* 

2.  Actions  by  and  againd  partners  where  no  change  in  the  firm  has 

occurred. 

A.  Actions  in  retyped  of  legal  rights. 

(a)   Actions  by  the  Jinn. 

Actions  ex  contractu. 

In  order  to  determine  who  ought  to  sue  on  behalf  of  a  firm  upon 
a  contract  made  witli  it,  it  is  necessary  to  distinguish  between 

1.  Contracts  under  seal. 

2.  Bills  of  exchange  and  promissory  notes. 

3.  Other  contracts. 

1.  Actions  by  partners  on  contracts  under  seal. — As  regards  con- 
tracts under  seal,  the  old  rule  was  that  if  such  a  contract  was  en- 
action have  not  been  served  with  pro-  individual  debt.  Held,  that  he  was  not 
cess,  the  plaintiff  may  discontinue  against  a  party  to  the  suit,  and  it  was  error  to 
those  not  served.  Clark  v.  Stoddard,  render  a  judgment  against  him  alone. 
3  Ala.  366;  Earbee  v.  Evans,  9  Port.  Craig  ?;.  Smith  (Colo.),  15  Pac.  Rep.  337. 
(Ala.)  295.  But  under  Tex.  Kev.  Stat.,  In  a  suit  against  two  as  partners, 
art.  1346,  authorizing  a  judgment  against  where  service  is  made  only  on  one,  and 
a  partnership,  and  against  such  of  the  the  officer  returns  non  est  inventus  as  to 
partners  as  have  been  actually  served,  the  other,  if  the  one  served  dies,  the 
and  prohibiting  a  personal  judgment  plaintiff  may,  under  the  act  of  1820, 
against  a  partner  not  served,  where  one  make  his  legal  representatives  parties, 
partner  only  is  served,  a  formal  dis-  and  proceed  to  judgment  and  execution 
continuance  as  to  the  other  is  unneces-  against  them.  Koss  v.  Everitt,  12  Ga. 
sary  to  the  validity  of  a  judgment  30.  S.  P.,  Wright  «.  Harris,  24  Ga.  415. 
against  the  firm.  Burnett  v.  Sullivan,  The  declarations  of  a  partner  as  to 
58  Tex.  535.  whom  the  suit  was  dismissed  for  want 

While  in   an  action  against  partners  of  service   are   inadmissible    in   a   suit 

judgment  should  not  be  rendered  against  against  the  firm  to  prove  the  partnership 

those  not  served  with  process,  still  such  of  the  defendants  as  against  the  other 

a  judgment,  though  erroneous,  is  valid  partness.     Rimel  v.  Hayes,  83  Mo.  200. 

as  against   those   served.     Davidson   v.  But    in    Pennsylvania,    in     an    action 

Knox,  67  Cal.  143.  against  partners,  if  only  one  has  been 

Suit  was  brought  against  a  firm  to  col-  served  with    process,  evidence    may  be 

lect  an  alleged  partnership  debt.  Service  given  by  the  plaintiff  of  the  declarations 

was  had  on  one  partner  only,  and  judg-  of  the  one  not  served.     M'Coy  v.  Light- 

ment  was  rendered  against  him  as  for  an  ner,  2  Watts  (Pa.)  347. 

451 


273*  ACTIONS    BY    PARTNERS  [bOOK    II., 

tered  into  witii  one  partner  only,  he  alone  eould  sue  upon  it;  and 
that  if  it  was  entered  into  with  more  than  one  partner,  all  those 
with  whom  it  was  expressly  entered  into  must  sue  upon  it,  and  no 
others  eould,  whatever  their  interest  in  its  performance  might  be.  (/i) 
But  their  joinder  will  now  he  of  no  consequence  unless  the  defendant 
is  prejudiced  by  it.  (i) 

*  Covenant  with  A  &  Co. — It  is  apprehended  that  a  cove- 
■J  nant  entered  into  with  A,  B  &  Co.  may  be  sued  upon  by 
the  persons  who,  when  the  covenant  was  m-ade,  constituted  that 
firm.lO 

2.  Actions  by  partners  on  bills  and  notes.  Blank  endorsements. — 
As  regards  bills  of  exchange  and  promissory  notes.  If  they  have 
been  endorsed  in  blank,  any  person  holding  them  may  sue  upon 
them,  {k) 

Spcoial  endorsements. — When  a  bill  or  note  is  not  endorsed  in 
blank,  the  proper  persons  to  sue  upon  it  are  those  named  in  the 
instrument  as  drawers,  payees  or  endorsees,  as  the  case  may  be.  [l) 
Whether  they  are  partners  or  not  is  of  no  consequence,  and  there- 
fore if  a  bill  is  drawn  in  the  name  of  two  persons  as  if  they  were 
partners,  they  ought  both  to  join  in  an  action  on  the  bill,  although 

One  copartner  cannot  authorize  an  ap-  plaintiff,  who  carries  on  business  as  a 

pearance  for  another.     Haslet  v.  Sheet,  firm    using   after    his    name    "&   Co.," 

2  McCord  (S.  C.)  310.     And,  if  one  part-  must  allege  and  prove  that  he  alone  is 

ner  appears,  and   the  other  makes  de-  interested  in  the  business,  or  he  will  be 

fault,  the  regular  mode  of  proceeding  is  non-suited.      Ferguson  v.  King,  5    La. 

for  the  plaintiff  to  get  judgment  for  the  Ann.  642. 

whole  debt,  against  the  one  appearing,  {k)  See  Ord  v.  Portal,  3  Camp.  239 ; 

and    to   execute    the    writ   of    inquiry  Attwood  v.  Rattenbury,  6  Moore  579 ; 

against  the  one  making  default,  for  the  Lowe  v.   Copestake,   3   Car.  &   P.  300. 

whole  also.     Simpson  v.  Geddes,  2  Bay  See,  also.  Law  v.  Parnell,  7  C.  B.  (N. 

(S.  C.)  533.     See  Hills  v.  Ross,  3  Dall.  S.)  282,  in  which  the  manager  of  a  joint 

(U.  S.)  331.  stock  bank  was  held  entitled  to  sue,  in 

(A)  See  the  note  to  Cabell  y.  Vaughan,  his  own   name,   on   a   bill  endorsed   in 

1  Saund.  291,  i;    Metcalf  v.  Rycroft,  6  blank  and  given  to  him  by  a  customer 

Mau.  <5  S.  75 ;  Scott  v.  Godwin,  1  Bos.  of   the   bank   on   account  of   advances 

&  P.  67  ;  Vernon  v.  Jeffreys,  2  Str.  1146.  made  by  it  to  him.    Machell  v.  Kinnear, 

(i)  Ord.  XVI.,  r.  11.  1  Stark.  499,  is   rendered   unimportant 

10.  Actions    by   partners    on    con-  by  Ord.  XVL,  rr.  1  and  11. 

tracts  under  seal. —  In  a  suit  on  an  ob-  (/)  See  Pease  v.  Hirst,  10  Barn.  &  C. 

ligation    payable   to   himself  "&   Co.,"  122. 

452 


CHAP.  III.,  §  I.]  ON    BILLS    AND    NOTES. 


274=^ 


one  of  them  has  no  interest  in  it.  (m)  So  it  is  immaterial 
whether  the  bill  or  note  relates  to  partnership  matters  or  not,  for  if 
a  debtor  to  a  firm  makes  his  promissory  note  payable  to  one  of  the 
partners  only,  such  one  is  the  proper  person  to  sue  on  the  note,  (n) 

Bills  in  name  of  A  &  Co. — If  a  bill  is  drawn  by  or  in  favor  of  a 
firm  in  its  commercial  name,  the  persons  who  composed  the  firm 
when  the  bill  was  drawn  ought  to  be  plaintiffs,  (o)  But  they  can 
now  sue  in  their  mercantile  name,  (p) 

Bills  accepted  for  honor. — If  one  partner  in  his  own  name 
accepts  a  bill  drawn  on  a  stranger,  for  his  honor,  and  pays  the  bill, 
when  due,  out  of  the  funds  of  the  partnership,  with  the  consent  of 
his  copartners,  the  partner  who  accepted  the  bill  is  the  proper  per- 
son to  sue  the  drawee  for  indemnity,  {q)^^ 


(m)  Guidon  v.  Robson,  2  Camp.  302. 
^Sed  qucei-e  now.     See  Ord.  XVI. 

(n)  Ba wdeu  v.  Howell,  3  Man.  &  G.  638. 

[o)  McBirney  v.  Harran,  5  Ir.  L. 
Eep.  428 ;  Phelps  v.  Lyle,  10  Ad.  &  E. 
113. 

(  p)  Ante  p.  *265. 

(q)  Driver  v.  Burton,  17  Q.  B.  989. 

11.  Actions  by  partners  on  bills 
and  notes. — In  a  suit  by  several,  on  a 
note  payable  to  a  firm,  proof  that  they 
■compose  the  firm  is  only  called  for 
where  the  title  of  plaintiffs  is  put  in 
issue  by  a  plea  sworn  to.  Rees  v.  Simons, 
10  Ind.  82;  Hauser  v.  Smith,  13  Ind. 
532;  Shepherd  v.  Frys,  3  Graft.  (Va.) 
442 ;  Bell  v.  Crosby,  4  Ala.  575 ;  Pratt 
V.  Willard,  6  McLean  (U.  S.)  27  ;  Smith 
V.  Davis,  2  Stew.  (Ala.)  224;  Smiih  v. 
Hunt,  Id.  222.  But  in  an  action  on  a 
■note  endorsed  specially  to  a  firm  (the 
plaintiflTs),  the  partnership  must  be 
proved.  Boswell  v.  Dunning,  5  Harr. 
(Del.)  231 ;  Ege  v.  Kyle,  2  Watts  (Pa.) 
222. 

In  a  suit  by  a  partnership  on  a  note 
and  mortgage  executed  to  the  firm,  the 
showing  of  the  copartnership  relation 
of  the  plaintiffs  is  not  indispensable  in 

4 


the  caption,  if  in  the  body  of  the  com- 
plaint it  be  specifically  averred  that  the 
plaintiffs  are  in  fact  copartners,  and  it 
appears,  from  the  facts  alleged,  that  the 
obligation  relied  upon  is  one  that  has 
been  created  in  favor  of  such  copartner- 
sliip.  Wise  V.  Williams  (Cal.),  14  Pac. 
Rep.  204. 

Where  a  note  payable  to  order  is  en- 
dorsed by  the  payee,  and  transferred  to 
two  persons,  who  bring  an  action  thereon 
as  "  H.  &  A.  F.  Randolph,  partners," 
&c.  Held,  that  plaintiffs,  being  the 
lawful  holders  of  the  note,  if  not  part- 
ners, could,  in  their  individual  names, 
maintain  an  action  thereon  as  "  H.  &  A. 
F.  Randolph."  Walgamood  v.  Ran- 
dolph (Neb.),  35  N.  W.  Rep.  217. 

In  Guidon  v.  Robson  (2  Camp.  302), 
the  case  being  an  action  by  Guidon 
alone  against  Robson,  upon  a  bill  of  ex- 
change, drawn  in  the  name  of  Guidon 
&  Hughes  (the  latter  being  a  mere 
clerk  of  Guidon)  on  Robson,  and  ac- 
cepted by  him.  Lord  Ellenborough  said  : 
"  There  being  such  a  person  as  Hughes, 
I  am  clearly  of  opinion  that  he  ought 
to  have  been  joined  as  a  partner.  He 
is  to  be  considered  in  all  respects  a  part- 

53 


275^ 


ACTIONS    EX    CONTRACTU. 


[book  II., 


3.  Actions  by  jxirturrs  on  ordinarj/  contracts. — With  respect  to 
other  simple  contracts,  whether  written  *or  verbal,  where  p^,^„p. 
intract  is  entered  into  with  several  persons  jointly,  they  ^ 


a  cont 


should  all  join  in  an  action  upon  it.  (/■)  But  if  a  simple  contract, 
written  or  verbal,  expressed  or  implied,  has  been  entered  into  with 
an  agent,  it  may  be  sued  upon  by  his  principal,  even  if  undisclosed, 
provided  he  can  show  that  in  point  of  fact  the  agent  contracted  on 
his  behalf,  (s)  12 


ner,  as  between  himself  and  the  rest  of 
the  world.  Persons  in  trade  had  better 
be  very  cautious  bow  they  add  a  ficti- 
tious name  to  their  firm  for  the  purpose 
of  gaining  credit.  But  where  the  name 
of  a  real  person  is  inserted  with  his  own 
consent,  it  matters  not  what  agreement 
there  may  be  between  him  and  those 
who  share  the  profit  and  loss.  They 
are  equally  responsible,  and  the  con- 
tract of  one  is  the  contract  of  all.  In 
this  case  the  declaration  states  that  the 
defendant  promised  to  pay  the  money 
specified  in  the  bill  to  the  plaintiff  only, 
whereas  she  promised  to  pay  it  to  the 
plaintiff  jointly  with  another  person. 
The  variance  is  fatal." 

(r)  1  Wms.  Saund.  291,  k,  and  1  Chit. 
PI.  10,  15.  Formerly,  mistakes  in  this 
respect  were  fatal,  but  see  now  Ord. 
XVI.,  r.  11. 

(s)  See  Phelps  i'.  Prothero,  16  C.  B. 
370;  Sims  «;.  Bond,  5  B.  &  Ad.  389.  See, 
also,  Beckham  v.  Drake,  9  Mees.  &  W. 
79,  and  11  Id.  315,  noticed  ante  p.  *178, 
and  Trueman  v.  Loder,  11  Ad.  &  E.  589, 
as  to  suing  u-ndisclosed  principals  on 
written  contracts.  Foreign  principals, 
as  a  rule,  do  not  enter  into  contracts  in 
this  country  through  agents.  The  agents 
here  themselves  contract  as  ])rincipals, 
though  acting  for  others.  See  Elbinger 
Actien  Gesellschaft  v.  Claye,  L.  R.,  8  Q. 
B.  313;  Button  v.  Bullock,  L.  R,  8  Q. 
B  331,  and  9  Id.  .572. 


12.  Actions  by  partners  on  ordinary 
contracts. — Where  partners  sue  upon  a 
promise,  and  the  general  issue  is  pleaded, 
the  burden  devolves  upon  the  plaintiffs 
to  prove  every  fact  necessary  to  main- 
tain their  action,  and  they  must  show  a 
joint  promise  to  all  of  them.  Burr  v. 
Morrison,  8  B.  Mon.  (Ky.)  131:  Roberts 
V.  Atwood,  Id.  209  ;  Ardley  v.  Russell,  1 
Browne  (Pa.)  14') ;  Patten  v.  Whitehead, 
13  Rich.  (S.  C.)  156.  But  see  Heintz  v. 
Cahn,  29  111.  308. 

All  the  partners  should  join  in  the  suit. 
On  this  subject  Lord  Tenterden  says: 
"  In  the  case,  however,  of  an  action  for 
the  freight  of  goods  conveyed  in  a  gen- 
eral ship,  all  the  part  owners  ought  to 
join,  or  if  they  do  not,  the  defendant 
may  avail  himself  of  the  objection  by 
evidence  at  the  trial,  and  without  plea 
in  abatement,  according  to  the  general 
rule  of  law  and  the  distinction  between 
contracts  and  wrongs ;  unless,  perhaps, 
some  one  should  have  received  his  own 
share,  or  have  released  his  claim  to  it. 
The  necessity  of  all  the  part  owners  join- 
ing as  plaintifis  in  the  suit,  in  this  case,  is 
founded  >ipon  the  consideration  that  all 
of  them  are  partners  with  respect  to  the 
concerns  of  the  ship ;  and  ui)on  this  con- 
sideration, the  present  Lord  Chancellor 
(Eldon),  in  a  case  of  bankruptcy,  wherein 
it  appeared  that  the  owners  of  a  ship,^ 
upon  a  settlement  of  accounts  with  the 
master,    who    had  become   a  bankrupt, 


454 


CHAP.  III.,  §  I.]  ACTIONS    EX    CONTRACTU. 


275^ 


All  may  sue,  though  not  named. — This  doctrine  is  constantly  ap- 
plied in  partnership  cases  ;  it  happens  every  day  that  a  firm  sues  on 
a  contract  entered  into  on  its  behalf  by  one  of  its  members,  and  it 


were  indebted  to  him,  and  that  on  the 
other  hand  he  also  was  indebted  to  some 
of  them  severally  upon  separate  and  dis- 
tinct concerns,  refused  to  allow  the  latter 
to  set  off  their  respective  demands 
against  the  claim  of  his  assignees  for 
their  shares  of  the  general  debt."  Ab- 
bott on  Shipping  (5th  ed.),  pt.  1.,  c.  3, 
§  14,  p.  82. 

In  an  action  by  plaintiffs  claiming  as 
partners,  it  is  a  good  defence  under  the 
general  issue  to  show  that  the  debt  is 
due  to  one  of  them  only.  The  statute 
of  Alabama,  dispensing  with  the  proof 
of  a  partnership,  unless  put  in  issue  by 
plea  in  abatement,  does  not  apply  to 
such  case.     Kenan  v.  Starke,  6  Ala.  773. 

Where  parties  do  not  sue  as  partners, 
the  statute  of  Illinois  does  not  dispense 
with  proof  of  their  joint  interest  upon  a 
general  denial.  Woodworth  v.  Fuller, 
24  111.  109. 

Where  the  plaintiffs  sue  jointly  as 
partners,  but  not  on  any  contract  with 
the  defendant  as  partners,  or  on  negotia- 
ble paper,  they  must  prove  partnership 
inter  se,  and  joint  right  to  and  interest  in 
the  subject  of  suit.  And  the  question  is, 
where  the  partnership  is  put  in  issue, 
whether  the  plaintiffs  are  partners  as 
between  themselves,  not  whether  they 
have  made  themselves  liable  as  partners 
to  third  parties.  Gray  v.  Gibson,  6 
Mich.  300. 

A  firm  may  sue  as  such  for  compensa- 
tion for  what  it  has  done,  even  though 
outside  the  scope  of  the  partnership 
business.  Tiernan  v.  Doran,  19  Neb. 
492. 

If  partners,  as  partners,  are  sureties 
for  one  who  died  insolvent,  and  a  judg- 
ment against  them  on  the  note  is  satis- 


fied by  levy  on  the  separate  estate  of 
one  of  them,  the  claim  against  the  estate 
of  the  deceased  principal  is  correctly 
made  by  and  in  the  name  of  the  part- 
ners. Parker,  v.  Gregg,  3  Fost.  (N.  H.) 
416. 

In  a  suit  upon  a  written  contract  en- 
tered into  by  plaintiff  to  do  certain 
work,  for  the  price  of  the  work,  the  de- 
fendant may  show  that  plaintiff  had  a 
partner  in  the  job,  and  that  such  part- 
ner had  been  paid  in  full.  Shepard  v. 
Ward,  8  Wend.  (N.  Y.)  542. 

In  an  action  by  a  partnership  upon  a 
debt  due  the  firm,  it  is  necessary  for  the 
plaintiffs  to  prove  that  they  are  the  per- 
sons constituting  the  firm,  unless  that 
fact,  being  stated  in  the  declaration,  is 
not  denied  in  the  aSidavit  of  the  de- 
fendant. Barnes  v.  Elmbinger,  1  Wis. 
56. 

Illustrations. — Where  a  sui't  was 
brought  in  the  name  of  certain  persons, 
as  composing  a  commercial  firm,  and  the 
defendant  excepted  to  the  petition,  upon 
the  ground  that  all  the  members  of  the 
firm  had  not  been  joined  in  the  action, 
it  was  held  that  where  it  was  shown 
that  the  name  of  one  of  the  persons  used 
in  the  style  of  the  firm  was  omitted,  the 
burden  of  proof  was  on  the  plaintiffs  to 
show  that  they  alone  composed  the  firm. 
Kugely  V.  Gill,  15  La.  Ann.  509. 

Where  a  vessel  was  built  by  several 
individuals,  and  advances  were  made  by 
two  part  owners,  who  were  partners,  out 
of  the  partnership  funds,  the  liability  of 
the  other  owners  for  such  advances  is  to 
the  firm,  and  not  to  the  several  members 
of  it.     Stevens  v.  Lunt,  19  Me.  70. 

Four  persons  formed  a  partnership  in 
the  ice  business,  under  the  name  of  G., 


455 


275=^ 


ACTIONS    EX   CONTRACTU. 


[book  II., 


is  not  by  any  means  necessary  tliat  the  person  dealing  with  hiui 
should  have  been  aware  that  the  one  partner  was  acting  on  behalf 
of  himself  and  other  people.  The  question  is :  With  whom  was 
the  contract  made  in  point  of  law?  And  the  true  answer  to  this 
question  does  not  by  any  means  entirely  depend  on  the  answer  to 
be  given  to  the  more  simple  question,  With  whom  was  the  contract 
made  in  point  of  fact  ? 

Thus,  in  Garrett  v.  Handley,  (t)  all  the  members  of  a  firm  were 
held  entitled  to  sue  on  a  written  guarantee  given  to  one  of  the  part- 
ners only,  there  being  evidence  to  show  that  the  guarantee  was  in- 
tended for  the  benefit  of  the  firm.  So,  where  a  member  of  a  firm 
of  bankers  was  asked  for  a  loan,  and  he  made  it  out  of  the  funds 
of  the  bank,  it  was  held  that  an  action  for  the  recovery  of  the 
money  lent  was  properly  brought  by  all  the  members  of  the  firm, 
although  the  borrower  had  not  requested  any  loan  from  the  bank,  (u) 
So,  where  one  partner  *sells  goods  belonging  to  the  firm,  (.f) 


=276] 


or  does  work  (3/)  of  the  kind  he  and  his  copartners  under- 


take, an  action  for  payment  may  be  maintained  by  him  and  them 
jointly,  although  the  person  to  whom  the  goods  were  sold,  or  for 


H.  &  Co,  and  transacted  their  business 
in  Charlestown  (Mass.)  The  same  per- 
sons and  C,  afterwards,  by  written  arti- 
cles, formed  a  partnership,  under  the 
name  of  C.  &  Co.,  in  the  business  of  sliip- 
ping  ice  to  Mobile  (Ala.),  and  selling  it 
there.  By  these  articles  G.,  H.  &  Co. 
were  to  ship  ice  to  Mobile,  consigned  to 
C.  &  Co.,  and  C.  was  to  devote  his  per- 
sonal attention  to  the  sale  of  the  ice 
there,  and  C.  &  Co.  were  to  pay  from 
the  proceeds  of  the  sales,  to  G.,  H.  &  Co., 
a  certain  price  per  ton  for  the  ice  shipped 
at  Charlestown,  and  also  to  pay  rent  for 
an  ice-house  at  Mobile,  and  all  freights 
and  expenses  on  the  ice  shipped,  and  all 
expenses  of  discharging  and  transport- 
ing it  from  the  vessels  to  the  ice-house, 
and  ail  other  expenses  of  taking  care  of 
and  selling  it;  and  the  proceeds  of  the 
sales,  after  deducting  all  said  expenses, 
were  to  be  divided  equally  between   C. 


and  the  firm  of  G.,  H.  &  Co.  R.  made 
an  agreement  with  the  firm  of  G.,  H.  & 
Co.  to  transport  a  cargo  of  ice  for  them 
from  Charlestown  to  Mobile,  but  did  not 
fulfill  his  agreement,  and  the  four  mem- 
bers composing  that  firm  brought  an  ac- 
tion against  him  to  recover  damages  for 
breach  of  that  agreement.  Held,  that 
the  action  could  not  be  maintained  with- 
out joining  C.  as  a  plaintiflT.  Gage  v. 
Rollins,  10  Mete.  (Mass.)  348. 

(0  4  Barn.  &.  C.  664.  See  the  same 
case,  3  Barn.  &  C.  462,  where  an  action 
by  the  one  partner  failed.  See  Hopkin- 
son  V.  Smith,  1  Bing.  13,  as  to  actions  by 
attorneys  not  retained  by  the  defendant. 

(u)  Alexander  v.  Barker,  2  Cromp.  & 
J.  133 ;  Sims  v.  Britain,  4  B.  &  Ad.  375, 
and  Sims  v.  Bond,  5  Id.  389. 

(x)  Skinner  v.  Stocks,  4  B.  &  A.  437. 

iy)  Townsend  v.  Neale,  2  Camp.  189 ; 
Arden  v.  Tucker,  4  B  &  Ad.  817. 


456 


CHAP.  III.,  §  I.]  ACTIONS    BY    PARTNERS. 


276' 


whom  the  work  was  done,  knew  nothing  of  the  other  partners.  In 
Cooke  V.  Seeley  {z)  a  partner  had  an  account  at  a  bank  in  his  own 
name,  but  there  was  evidence  to  show  tiiat  it  was  a  partnership 
account,  and  was  know^n  to  the  bankers  to  be  so,  and  under  these 
circumstances  it  was  held  that  all  the  partners  were  entitled  to  sue 
the  bankers  for  dishonoring  a  cheque  drawn  on  them  by  the  one 
partner  for  partnership  purposes.^3 

(z)  2  Ex.  746.  Court  of  King's  Bench  held  that  as  the 

13.  All  may  sue,  though  not  named,  guaranty  was  proved  to  have  been  in- 
— Upon  this  subject,  Mr.  Gow,  in  his  tended  for  the  benefit  of  the  firm,  the 
treatise  on  Partnership  (ch.  3,  §  1,  pp.  action  was  properly  brought  by  the  sar- 
121-123),  says  as  follows:  "Partners  viving  partners;  and,  under  such  cir- 
sometimes  seek  to  enforce  a  guaranty  cumstances,  it  is  not  competent  to  the 
given  to  secure  the  repayment  of  an  partner  to  whom  the  guaranty  may  have 
advance  to  be  made  by  the  firm.  In  been  addressed,  to  treat  the  advance  as 
such  a  case  the  action  must  necessarily  one  made  by  himself  on  his  individual 
be  brouffht  by  all  the  partners  to  whom  account,  and  in  that  character  to  support 
the  guaranty  is  given,  and  by  whom  the  a  separate  action.  This  was  determined 
advance  is  made.  And  where  a  contract  in  a  previous  action  on  the  same  guar- 
of  that  description  is  apparently  entered  anty,  and  in  which  the  plaintiff  declared 
into  in  favor  of  one  partner  only,  yet  in  that  in  consideration  that  he  would  ad- 
fact  if  it  be  intended  as  an  indemnity  to  vance  a  sum  of  money  to  A  B,  the  de- 
the  firm,  in  respect  of  an  advance  to  be  fendant  promised  that  provision  should 
made  by  them,  a  joint  action  may  be  be  made  for  paying  the  plaintiff.  At 
maintained.  Thus,  in  the  late  case  of  the  trial  it  apfteared  that  the  defendant 
Garrett  v.  Handley,  4  Barn.  &  C.  664,  had  given  to  the  plaintiff  the  guaranty 
which  was  an  action  on  a  guaranty  by  stated  in  the  declaration,  and  that  the 
two,  as  the  survivors  of  a  firm  of  three  latter  was  a  partner  with  two  other  per- 
partners,  it  appeared  that  the  guaranty  sons  in  a  banking-house,  and  that  the 
was  addressed  to  one  of  the  partners  firm  had  advanced  the  money;  and 
only  ;  but  evidence  was  produced  which  charged  A  B  in  account  with  the  same ; 
established  that  the  advance  to  secure  and  it  was  held  that  the  averment  in  the 
which  the  guaranty  was  entered  into,  declaration,  that  the  plaintiff  had  ad- 
was  made  by  the  firm,  and  that  the  vanced  the  money,  was  not  sustained  by 
guaranty  was  given  for  their  joint  benefit  the  proof,  there  being  no  evidence  to 
and  not  to  indemnify  the  single  partner  show  that  the  money  had  been  advanced 
only.  It  was  objected  at  Nisi  Prius,  and  to  the  plaintiff  by  the  firm,  and  by  him 
afterwards  insisted  upon  on  a  motion  to  to  A  B.  It  is  not  to  be  collected  from 
enter  a  nonsuit,  that  there  was  a  mis-  either  of  the  two  preceding  cases,  nor 
Joinder;  for,  as  the  guaranty  was  in  was  it  in  fact  necessary  to  determine 
terms  given  to  one  partner,  to  whom  whether  the  partner  to  whom  the  guar- 
alone  the  promise  could  be  construed  to  anty  was  actually  given  could  have 
have  been  made,  the  action  should  have  maintained  a  separate  action  upon  it, 
been    brought   by    him   only.     But  the    provided    his   declaration  so  truly  and 

457 


276^ 


ACTIONS    BY    PARTNERS. 


[book  Il.y 


Dormant  partners. — It  follows  from  the  principle  on  which  these 
cases  were  decided,  and  although  formerly  doubted,  (a)  it  is  now 


correctly  stated  tlie  facts,  as  not  to  have 
been  open  to  the  objection  of  a  variance 
between  the  allegation  and  the  proof. 
But  judging  from  analogy  to  the  rule 
applicable  to  a  policy  of  insurance, 
which  allows  the  action  to  be  brought 
either  by  the  party  for  whose  benefit  it 
was  effected  or  in  tlie  name  of  him  who 
effected  it,  it  would  seem  that  that  part- 
ner, as  being  the  party  witii  whom  the 
contract  was  made,  might  have  support- 
ed such  an  action." 

In  Alexander  v.  Barker  (2  Cromp.  & 
J.  133,  138)  Baron  Bayley,  speaking  of 
the  case  of  Garrett  v.  Handley,  cited 
above,  says :  "  I  have  no  doubt  in  this 
case  but  that  this  action  is  maintainable 
by  the  plaintiffs ;  and  in  that  opinion  I 
am  fortified  by  the  case  of  Garrett  v. 
Handley.  Here  D.  Alexander  stood  in 
the  double  capacity  of  an  individual  and 
a  member  of  the  firm.  Barker  wanted 
an  advance  of  money,  and  to  him  it  was 
quite  immaterial  by  whom  the  advance 
was  made,  whether  by  D.  Alexander 
alone,  or  by  the  house  of  which  he  was 
a  member.  He  applies  to  D.  Alexander 
to  make  the  advance.  He  does  not 
qualify  that  application  and  say,  '  You 
may  be  a  member  of  a  firm,  and  I  will 
deal  with  you  only,  ^nd  will  not  be  an- 
swerable to  other  persons ;'  but  he  makes 
his  application  without  any  qualifica- 
tion. By  thus  applying  generally,  he 
entitles  D.  Alexander,  if  he  makes  the 
advance,  to  place  him  in  the  situation 
of  being  answerable  to  him  in  either  of 
his  capacities,  according  to  that  in  which 
he  makes  the  advance.  From  the  testi- 
mony it  appears  that  the  advance  was 
made  by  D.  Alexander,  not  individually, 


but  with  the  money  of  the  firm.  He  ac- 
cepted, therefore,  the  application  for  the 
advance,  not  as  an  individual,  but  in  his- 
capacity  as  a  member  of  the  firm.  In 
Garrett  v.  Handley  the  contracting  part- 
ner first  brought  the  action  in  his  own 
name;  but  it  appeared  that  the  advance 
was  made  by  the  house,  and  the  court 
said,  '  You  did  not  make  the  advance 
and  cannot  maintain  the  action.'  An- 
other action  was  then  brought  in  the 
name  of  the  firm,  and  the  court  being  of 
opinion  that  the  guaranty  was  intended 
to  apply  to  advances  made  by  the  firm, 
thought  that  the  action  was  maintain- 
able. The  language  of  that  guaranty 
was  much  more  pointed  than  this  letter. 
It  was  addressed  to  an  individual,  and 
was  to  this  effect :  '  I  understand  from 
Mr.  G.,  that  you  have  had  the  goodness 
to  advance  £550,  &c.,  upon  my  assur- 
ance, which  I  hereby  give,  that  provi- 
sion shall  be  made  for  repaying  jou  this 
sum,'  &c.  But  the  advance  was  not  made 
by  the  individual  alone;  and  it  was 
holden  that  the  firm  by  whom  the  ad- 
vance was  made  ought  to  sue.  It  appears 
to  me,  therefore,  that  the  plaintiffs  were 
the  persons  who  might  and  ought  to  sue 
in  this  case."  And  again  he  says :  "  I 
am  the  less  surprised  that  the  learned 
judge  should  have  considered  D.  Alex- 
ander as  the  person  with  whom  the  de- 
fendant contracted,  and  who  alone  could 
maintain  the  action,  because  I  remember 
that  it  was  at  one  period  the  impression 
of  Lord  Ellenborough  that  where  money 
was  lent  by  a  partner,  the  action  must 
in  all  cases  be  brought  by  the  individual 
with  whom  the  contract  was  made.  But 
he  was  afterwards  convinced  of  what  is 


(a)  .See  Mawman  v.  Gillett,  2  Taunt.  325 ;  Lloyd  v.  Archbowle,  Id.  324. 

458 


CHAP.  III.,  §  I.]  ACTIOXS    BY    PARTNERS. 


276* 


clearly  established  that  dormant  partners  may  join  as  plaintiffs  in 
an  action  on  a  contract  entered  into  on  behalf  of  the  firm  of  which 
they  are  members.  (6) 

But  a  dormant  partner  never  need  be  joined  as  a  coplaintiff  in  an 
action  on  a  contract  entered  into  with  the  firm  or  with  one  of  its 
members,  (c)  14 

Position  of  nominal  partners. — Nominal  partners,  i.  e.,  persons 
who  are  not  entitled  to  share  the  profits  of  the  firm,  but  whose 
names  appear  and  are  used  as  if  they  were,  never  need  join  a& 
plaintiffs  in  an  action  on  an  ordinary  contract  not  under  seal,  {d) 
If  a  partner  retires  and  leaves  his  name  in  the  firm,  it  is  not  neces- 
sary that  he  should  be  a  coplaintiff  in  an  action  brought  by  the 
continuing  partners  in  respect  of  what  has  happened  since  the 
retirement,  (e) 

doubtless  the  true  rule,  viz.,  that  where    (N.  Y.)  84;  Clark  v.  Miller,  4  Wend. 


a  contract  is  made  by  one  on  behalf  of 
others,  the  action  may  be  brought  in  the 
name  of  the  principals." 

Where  one  of  several  partners,  to 
whom  an  indemnity  is  given,  is  com- 
pelled by  legal  proceedings  to  pay  out 
moneys  on  account  of  a  demand  against 
his  firm,  the  action  to  recover  back  the 
moneys  thus  paid  may  be  brought  in 
the  name  of  all  the  members  of  the 
firm.  Hill  v.  Packard,  5  Wend.  (N. 
Y.)  375. 

(6)  Cothay  v.  Fennell,  10  Barn.  &  C. 
671.  See,  also,  ante  notes  (s)  and  {t)  ; 
Robson  V.  Drummond,  2  B.  &  Ad.  303, 
per  Littledale,  J. 

(c)  Leveck  v.  Shafto,  2  Esp.  468,  ac- 
tion for  work  and  labor.  See  Phelps  v. 
Lyle,  10  Ad.  &  E.  113,  as  to  contracts 
with  the  "directors"  of  a  company. 

14.  Dormant  partners  as  plaintiffs. 
— Ordinarily,  a  dormant  partner  need 
not  join  in  an  action  brought  in  behalf 
of  the  firm  by  the  ostensible  partner, 
against  a  person  who  dealt  with  the 
latter  only.  Wood  v.  O'Kelly,  8  Cush. 
(Mass.)  406  ;  Clarkson  v.  Carter,  3  Cow. 


(N.  Y.)  628  ;  Rogers  v.  Kichline,  36  Pa. 
St.  293;  Curtis  v.  Belknap,  21  Vt.  436; 
Desha  v.  Holland,  12  Ala.  513;  Sylves- 
ter V.  Smith,  9  Mass.  119;  Wilson  v. 
Wallace,  8  Serg.  &  R.  (Pa.)  55;  Hilli- 
ker  V.  Loop,  5  Vt.  116;  Cleveland  v. 
Woodward,  15  Vt.  302;  Blin  v.  Pierce, 
20  Vt.  25;  Hagar  v.  Stone,  Id.  106; 
Waite  V.  Dodge,  34  Vt.  181.  An  osten- 
sible partner  may  maintain  an  action  in 
his  own  name,  without  joining  a  dormant 
partner,  although  the  latter  was  known 
to  the  defendant  when  the  debt  was  con- 
tracted, and  actually  sold  him  the  goods, 
for  the  price  of  which  the  action  was 
brought.  Monroe  v.  Ezzell,  11  Ala. 
603.  But  a  dormant  partner  must  join 
with  his  active  partner  in  a  suit  for 
work  and  labor  done  by  the  firm.  Se- 
cor  V.  Keller,  4  Duer  (N.  Y.)  416.  To 
the  contrary,  Speake  v.  Prewitt,  6  Tex. 
252. 

(d)  Kell  V.  Nainby,  10  Barn.  &  C.  20. 
See,  also,  Spurr  v.  Cass,  L.  R.,  5  Q.  B. 
656,  where  the  contract  was  in  writing 
and  with  the  nominal  partner. 

(e)  Cox  V.  Hubbard,  4  C.  B.  317. 


459 


276**  ACTIONS   EX    CONTRACTU.  [bOOK    II., 

Where  nominal  partners  must  sue. — But  if  a  nominal  partner's 
name  is  on  a  bill  of  exchange  or  promissory  note,  he  ought  to  be  a 
party  to  the  action  brouglit  *upon  it;  and  the  same  rule  p^^-- 
applies  to  actions  on  contracts  under  seal.  (/)  '- 

Actions  by  one  partner. — One  partner  may  sue  alone  on  a  written 
contract  made  with  himself  if  it  does  not  appear  from  the  contract 
itself  that  he  was  acting  as  agent  of  the  firm ;  [g)  and  one  partner 
ought  to  sue  alone  on  a  contract  entered  into  with  himself,  if  such 
contract  is  in  fact  made  with  him  as  a  principal,  and  not  on  behalf 
of  himself  and  others.  Therefore,  if  each  of  several  partners  lends 
money  out  of  his  own  funds,  each  ought  to  sue  alone  for  repayment 
of  his  advance,  although  the  loans  may  have  been  made  in  pur- 
suance of  some  arrangement  with  all  the  partners ;  for  each  loan 
creates  a  separate  debt  to  each  partner,  and  the  several  loans  do  not 
together  form  one  debt  to  the  firm.  (A)  Again,  if  one  partner  alone 
holds  a  certain  office  and  does  work  in  his  official  capacity,  he  alone 
ought  to  sue  for  payment  of  the  work  so  done,  (i)  15 
/ 

(/)  Guidon  V.  Eobinson,  2  Camp.  302.  name  against  a  debtor  of  the  firm  to  re- 

{g)  See  Skinner  v.  Stocks,  4  B.  &  A.  cover  his  shave  of  the  debt.     Vinal  v. 

437,  and  Cothay  v.  Fennel!,  10  Barn.  &  West  Virginia  Oil,  &c.,  Co.,  110  U.  S. 

C.  671.  See,  also,  Cawthron  d.  Trickett,  15  215.     Nor  will  an  account  in  favor  of  a 

C  B.  (N.  S.)  754,  as  to  actions  by  a  mas-  firm  support  a  bill  in  equity  by  one  of 

ter  and  part  owner  of  a  ship  on  bills  of  the  partners  only,  unless  it  appears  on 

lading,  and  Agacio  v.  Forbes,  14  Moo.  the  face  of  the  bill,  either  that  the  other 

P.  C.  160,  in  the  privy  council,  where  it  partner  is  dead,  or  that  he  has  parted 

was  held  that  one  partner  might  main-  witli  his  interest.     Frost  v.  Shackleford, 

tain  an  action  upon  an   agreement   in  57  Ga.  260 ;  Hatzenbuhler  v.  Lewis,  51 

writing  made  with  him  alone,  altliough  Mich.   585.     And  even    in  that  case  it 

the  agreement  related  to  the  business  of  must  be  shown  that  the  debt  to  the  firm 

the  firm,  and  was,  in  truth,  for  its  bene-  has  been  extinguished,  and  a  new  lia- 

fit,  and  the  consideration  was  a  release  bility   assumed   to  the  plaintiff  alone : 

by  the  partner  in  question  of  a  debt  due  and  if  a  new  contract  be  made,  it  must 

to  the  firm.  be  declared   on  specially.     De  Grott  v 

{h)    See     Tiiacker     v.    Shepherd,    2  Darby,  7  Rich.  (S.  C.)  118. 
Chitty  652;   Brand  v.  Boulcott,  3  Bos.        There  is  no  rule  of  pleading  or  prac- 

&  P.  235.  tice  which  authorizes  a  recovery  by  one 

(i)  Brandon   v.  Hubbard,  2  Brod.  &  partner  in  his  own  name,  on  what  his 

B.  11.  partners  agree  is  his  share  of  a  debt  due 

15.  Actions  by  one  partner— when  tlie  firm.     In  all  cases  of  indebtedness 

one  may  not  sue. — One  partner  cannot  to  a  firm,  the  action  must  be  brought  by 

prosecute  an  action  at  law  in  his  own  the  members  of  the  firm ;  nor  does  an 

460 


CHAP.  III.,  §  I.]  ACTIONS    BY    PARTNERS. 


277* 


Covenant  ivith  one  partner. — Again,  if  a  partner  enters  into  a 
contract  under  seal  for  the  payment  of  money  and  the  money  is 
paid  out  of  the  funds  of  the  firm,  and  it  then  appears  that  the  con- 


agreement  to  divide  the  claims  among 
themselves  change  the  right.  American 
Cent.  R.  R.  Co.  v.  Miles,  52  111.  174. 

Thus,  an  action  for  goods  sold,  which 
belonged  to  a  partnership  at  the  time 
of  the  sale,  musl  be  brought  in  the  name 
of  all  the  partners,  although  the  defend- 
ant was,  at  the  time  of  the  purchase,  igno- 
rant of  the  existence  of  the  partnership. 
Bennett  v.  Scott,  1  Cranch  (U.  S.)  C.  C. 
339.  And  even  though  the  firm  busi- 
ness is  done  in  the  name  of  one  partner 
only.  Wilson  v.  Wallace,  8  Serg.  &  R. 
(Pa.)  53.  And  the  rule  is  not  changed 
by  the  fact  that  the  partner  attempting 
to  sue  for  a  debt  due  the  firm  had  pre- 
viously agreed  to  be  responsible  to  the 
other  partner  for  the  payment  of  the 
debt ;  there  having  been  no  settlement 
between  the  partners  making  the  claim  a 
separate  one.  Cushing  v.  Marston,  12 
Cush.  (Mass.)  431.  So,  also,  one  part- 
ner cannot  sue  in  his  own  name  to  re- 
cover property  of  the  firm  fraudulently 
assigned  by  a  copartner  to  his  indi- 
vidual creditor.  Miller  v.  Price,  20 
Wis.  117. 

Although  one  partner  is  not  bound, 
singly,  to  pay  a  debt  due  from  him  and 
his  partner,  if  when  sued  he  plead  in 
abatement  the  omission  to  join  his  part- 
ner in  the  action,  yet  he  is  not  entitled 
to  recover,  in  his  own  name,  a  partner- 
ship debt ;  and  if  he  sue  singly  in  his 
own  name,  the  defendant  may  take  ad- 
vantage of  it  on  the  trial  on  the  general 
issue.  Jordan  v.  Wilkins,  3  Wash.  (U. 
S.)  110. 

So,  also,  where,  on  the  dissolution  of 
a  firm,  a  third  person  acquires  the  in- 
terest of  the  surviving  partner,  he  can- 
not maintain  a  suit  in  his  own  name  for 


services  rendered  individually,  and  as  a 
member  of  the  firm.  Mosgrove  v.  Gol- 
den, 101  Pa.  St.  605. 

When  one  may  sue. — Where  one 
partner,  by  express  stipulation  in  the 
articles  (for  the  cultivation  of  a  farm  for 
a  term  of  years),  has  "a  lien  on  the  pro- 
duce of  the  said  farm,  and  upon  the  stock 
and  mules  on  said  farm,  to  secure  the 
payment  of"  the  other  partner's  notes 
for  a  half  interest  in  them,  and  is  au- 
thorized "  to  control  the  crops  grown  on 
said  farm  exclusively,  and  to  sell  the 
cotton,"  he  may  maintain  detinue  for 
the  coiion  in  his  own  name.  Pierce  v. 
Jackson,  56  Ala.  599. 

One  partner  can  assign  his  interest  in 
an  open  account  due  to  the  firm,  to  his 
copartner,  and  the  latter  may  become 
the  reaJ  party  in  interest,  so  as  to  main- 
tain a  suit  on  the  account  in  his  own 
name.  Swails  v.  Coverdill,  17  Ind.  337  ; 
Cook  V.  Beech,  10  Humph.  (Tenn.)  412. 
But  see  Horbach  v.  Huej,  4  Watts  (Pa.) 
455. 

But  an  endorsement  by  one  partner,  in 
his  individual  name,  to  his  copartner,  of 
a  promissory  note  payable  to  both  of 
them  or  order,  will  not  enable  the  en- 
dorsee to  sue  thereon  in  his  own  name. 
Estabrook  v.  Smith,  6  Gray  (Mass.)  570. 

One  partner  may  recover  his  propor- 
tion of  a  debt  due  the  firm,  if  the  debtor 
and  all  the  parties  have  agreed  that  the 
debt  be  severed  and  paid  to  him.  Aus- 
tin V.  Walsh,  2  Mass.  401.  Thus,  where 
two  partners  agree  to  divide  a  partner- 
ship debt,  and  the  debtor  consents  to  it, 
and  promises  one  of  the  partners  to  pay 
a  moiety  to  him,  such  partner  may  main- 
tain an  action  for  his  moiety  against  the 
debtor.     Blair  v.  Snover,  10  N.  J.  L.  153. 


461 


277*  ACTIONS    EX    CONTRACTU.  [bOOK    TI., 

tract  was  invalid  on  the  ground  of  fraud,  the  partner  who  entered 
into  the  covenant  may  sue  alone  for  the  recovery  back  of  the 
money,  (k)  Lastly,  if  one  partner  acting  for  the  firm  has  repre- 
sented himself  to  be  acting  on  his  own  account  only,  and  has  osten- 
sibly entered  into  a  contract  on  his  own  account,  he  alone  ought  to 
sue  on  it.  {I) 

The  Judicature  acts  and  the  rules  promulgated  under  them  have 
rendered  it  comparatively  unimportant  to  consider  whether  *in  any 

ffiven    case    all    partners   who   can    sue    nuist  do  so,   and 
*2781  ^  '■  . 

-"  whether  an  action  should  be  brought  in  the  name  of  one 

partner  or  of  all ;  for  mistakes  on  such  matters  are  no  longer  fatal 

to  an  action.     At  the  same  time,  mistakes  create  delay  and  expense, 

and  attention  ought  therefore  still  to  be  paid  to  the.  points  above 

adverted  to ;  and  if  all  the  members  of  a  firm  sue  when  one  only 

ought  to  do  so,  or  one  only  sues  wdien  all  ought  to  do  so,  and  the 

defendant  can  show  that  he  is  thereby  prejudiced,  he  can  apply  to 

have  the  improper  parties  struck  out  or  the  proper  parties  joined, 

as  the  case  may  be.  (m)  16 

Stronger  proof  is  required  to  prevent  demand  due  the  partnership — Held,  that 

one  partner  from  maintaining  a  suit  in  he  could  not  impeach  the  title  of  an- 

his  own  name  than  is  sufficient  to  charge  other  who  had,  in  good  faith  and  without 

persons  as  partners  when  sued  as  defend-  notice,  purchased  the  judgment    recov- 

ants.     Bishop  v.  Hall,  9  Gray  (Mass.)  ered,  from  the  former,  who  was  plaintiff 

132.  on  the  record.     McCotter  v.  McColter, 

Where  two  partners  were  compelled  16  Abb.  (N.  Y.)  Pr.  265;  25  How.  Pr. 

to  pay  a  debt  of  a  third  person  (the  one  478. 

as  surety,  and  the  other  as  the  heir  of  a  (k)  Lefevre  v.  Boyle,  3  B.  &  Ad.  877. 

co-surety)  from  the  partnership  funds,  it  (l)  Lucas  v.  De  in  Cour,  1  Mau.  &  S. 

was  held  that  a  separate  action  might  be  249. 

maintained  by  each  against  the  principal  (m)  See  Ord.  XVI.,  r.  11. 

foramoietyof  the  money  so  paid.  G.miM  16.  Actions  by  one— covenant  with 

V.  Gould,  6  Wend.  (N.  Y.)  263.  one. — An  action  for  goods  mortgaged  to 

One  of  two  partners  of  a  law  firm  lu.y  une   partner,  to  secure  an  indebtedness 

maintain  an  action  where  the  business,  to  the  firm  of  which  he  is  a  member,  is 

respecting  which    a  suit  is  brought,  is  rightly   brought    in   the    name    of   the 

uniformly  done  in  the  name  of  the  party  mortgagee  alone.     Trott  i'.  Irish,  1  Allen 

suing.     A  set-off  will  be  allowed  in  such  (Mass.)  481. 

suit  of  a  demand  against  the  firm.    Piatt  Where  one  partner,  who  was  agent  of 

V.  Halen,  23  Wend.  (N.  Y.)  456.  his  copartners,  made  a  contract  in  his 

Where   one   allowed    his    j)artner    to  own  name— i7eW,  that  he  might  sue  on 

bring  an  action  in  his  own  name  on  a  that  contract  without  joining  his  part- 

462 


€HAP.  III.,  §  I,]  ACTIOX.S    BY    PARTNERS.  278* 

Actions  ex  delicto. 

Actions  by  jxuiners  for  torts. — With  respect  to  actions  by  part- 
ners not  founded  on  any  breach  of  contract,  or  of  quasi  contract, 
but  on  some  tort,  the  general  principle  is  that  where  a  joint  dam- 
age accrues  to  several  persons  from  a  tort,  they  ought  all  to  join  in 
an  action  founded  upon  xt;{n)  whilst,  on  the  other  hand,  several 
persons  ought  not  to  join  in  an  action  ex  delicto,  unless  they  can 
show  a  joint  damage,  (o)  i7 

Actions  for  libel. — These  doctrines  are  well  illustrated  by  actions 
for  libel.  A  libel  on  a  firm  can  be  made  the  subject  of  an  action 
by  the  firm,  (p)  If  the  libel  reflects  directly  on  one  partner,  and 
through  him  on  the  firm,  two  actions  will  lie,  viz.,  one  by  the  party 
libeled,  and  the  other  by  him  and  his  copartners ;  (g)  but  the  dam- 
age in  the  first  action  must  not  appear  to  be  joint,  nor  must  that 
in  the  second  appear  to  be  confined  to  the  libeled  partner  only.  (/•) 
If  one  partner  is  libeled,  and  the  firm  cannot  be  shown  to  have 
been  damnified,  an  action  for  the  libel  should  be  brought  in  the 

name  of  the  individual  partner  *aggrieved,  and  not  bv  the   ^ 

"  r*279 

firm;(s)   and   he  may  sue  alone,  although  the  libel  more  '- 

ners.     Elancy  v.  French,  1  Blackf.  (Ind.)  the    firm    property,    on    an    execution 

353.  against  his  copartner.     Hughes  v.  Bor- 

In  an  action  upon  a  note  payable  to  ing,  16  Cal.  81. 
the  order  of  the  plaintiff  alone,  he  was  Where  two  sue  as  copartners  for  con- 
non-suited,  on  the  ground  that  the  evi-  version  of  goods,  the  mere  fact  that  it 
dence  showed  that  the  money  for  which  appears  in  evidence  that  plaintiffs  are 
the  note  was  given  was  advanced,  and  the  not  copartners  will  not  entitle  the  de- 
note given  in  pursuance  of  a  contract  be-  fendant  to  a  verdict.     Hine  v.  Bowe,  21 
tween  the  defendants  and  a  firm  of  which  N.  Y.  Week.  Dig.  558. 
the   plaintiff  was  a  member;   and   that  ( p)  See  Cook.-?  v.  Batchellor,  3  Bos.  & 
therefore  the  plaintiff  could  not  maintain  P.  150;  Forster  v.  Lawson,  3  Bing.  452  ; 
an  action  alone,  even  if  his  partner,  as  be-  Williams  v.   Beaumont,   10   Bing.   260; 
tween  themselves,  had  no  interest  in  the  The  Metropolitan  Saloo.n  Omnibus  Co. 
note.     Held,  that  the  non-suit  was  error.  ?•.  Hawkins,  4  Hurlst.  &  N.  87. 
Mynderse  v.  Snook,  53  Barb.  (N.  Y.)  234.  (q)  The  two  actions  can  now  be  com- 

(ji)  See  1  Wms.  Saund.  291,  »>i;   Ad-  bined  in  one.     See  Ord.  XVIIL,  r.  6. 

■dison  V.  Overend,  6  T.  R.  766 ;  Sedgworth  (r)  See  Harrison  v.  Bevington,  8  Car. 

V.  Overend,  7  T.  R.  279.  &  P.  708 ;  and  Forster  v.  Lawson,  3  Bing. 

(o)  2  Wms.  iSaund.  116,  a.  452;  2  Wms.  Saund.  117,  6;  Haythorne 

17.  Generally. — One  partner  cannot  v.  Lawson,  3  Car.  &  P.  196. 

recover  against  a  sheriff  for  levying  upon  (s)  Solomons  i;.  Medex,  1  Stark.  191. 

463 


279* 


ACTIONS    EX    DELICTO. 


[book    II., 


particularly  affects  him  in  the  way  of  his  business.  (^)  Moreover, 
a  general  statement  not  clearly  pointing  to  any  particular  person, 
but  libelous  as  to  an  entire  class,  may  be  treated  by  any  individual 
of  that  class,  who  can  show  that  he  was  in  fact  intended,  as  a  libel 
on  himself;  and  this  principle  is  as  applicable  to  libels  affecting  a 
firm  as  to  those  affecting  single  individuals.  (?t)  18 


(<)  Harrison  v.  Bevington,  8  Car.  & 
P.  708 ;  Eobinson  v.  Marchant,  7  Q.  B. 
918. 

(m)  Le  Fanu  v.  Malcolmson,  1  H.  L. 
Cas.  637. 

18.  Actions  for  libel. — In  Forster  v. 
Lawson  (3  Bing.  452)  Best,  C.  J.,  said : 
"An  objection  lias  been  made  to  the 
declaration  in  this  case,  namely,  that 
the  action  has  been  brought  by  three 
persons  jointly,  and  that  they  could  not 
properly  join  in  such  an  action.  The 
general  rule  of  law  is,  as  laid  down  in 
the  case  of  Smith  v.  Cooker  (Cro.  Car. 
512),  namely,  that  where  several  per- 
sons are  charged  with  being  jointly  con- 
cerned in  a  murder,  each  of  them  must 
bring  a  separate  action  for  it;  and  the 
reason  is  that  they  have  no  joint  inter- 
est to  be  affected  by  the  slander.  Where, 
however,  two  persons  have  a  joint  in- 
terest affected  by  the  slander,  they  may 
sue  jointly ;  and  th.e  case  of  Cooke  i'. 
Batchellor  is  not  the  first  case  which 
has  determined  this  point.  In  the  note 
in  Saunders,  to  which  the  court  has 
been  referred,  the  learned  editor  states 
that  two  joint  tenants  or  coparceners 
might  join  in  an  action  for  slander  of 
the  title  to  their  estate,  and  the  form 
of  the  declaration  in  such  an  action  is 
to  be  found  in  Brownlow.  This  doc- 
trine has  also  beem  recently  considered 
and  confirmed  in  the  case  of  Collins  v. 
Barrett,  in  which  it  was  holden  that 
two  persons  might  bring  a  joint  action 
for  a  maliciously  holding  them  to  bail, 
if  the  complaint  in  the  declaration  was 


confined  to  the  expenses  which  they 
were  jointly  put  to  in  procuring  their 
liberty.  It  has  been  said  that  notwith- 
standing the  judgment  against  the  de- 
fendants in  this  action,  if  either  of  the 
plaintiffs  has  sustained  any  separate 
damage,  he  may  still  maintain  a  sepa- 
rate action.  I  cannot  see  how  there  can 
be  any  separate  damage.  The  business 
injured  is  the  joint  business,  and  the 
libel  only  affects  the  plaintiffs  through 
their  business.  If,  however,  a  copart- 
nership be  libeled,  and  the  libel  con- 
tains something  which  particularly  af- 
fects the  character  of  one  of  that  firm,  I 
think  a  joint  action  may  be  maintained 
against  the  libeler,  wiio  would  have 
less  reason  to  complain  of  such  pro- 
ceedings than  he  woidd  have  if  each 
partner  brought  a  separate  action  for  the 
injnry  done  to  the  firm.  Another  objec- 
tion raised  by  the  defendant's  counsel  is 
that  the  plaintiffs  liave  not  stated  the  pro- 
portion of  interest  whicli  each  respective- 
ly had  in  their  joint  business.  It  is  not 
necessary  for  them  to  do  so ;  with  their 
several  proportions  the  defendant  has 
nothing  to  do.  Any  compensation  they 
may  recover  will  belong  to  them  gen- 
erally, and  it  is  nothing  to  the  defendant 
how  it  may  be  divided  among  them.  It 
has  also  been  urged  that  the  words  con- 
tained in  the  paragraph  are  not  action- 
able. I  have  no  hesitation  in  deciding 
that  to  say  of  any  bankers  that  they 
have  suspended  payment,  is  actionable. 
For  what  can  be  the  meaning  of  such  a 
statement,  except  that  they  are  no  longer 


464 


CHAP.  III.,  §  I.J 


ACTIONS    EX    DELICTO. 


279* 


Consequence  of  non-joinder  of  partners. — An  action  for  the  re- 
covery of  goods  of  the  firm,  or  for  damages  for  their  loss  or  injury, 
ought  to  be  brought  in  the  name  of  the  firm  or  by  all  its  mem- 
bers; (a;)  but  if  one  only  sues,  he  will  be  entitled  to  recover  dam- 
ages in  respect  of  his  interest  in  the  goods; (a;)  and  if,  after  he  has 
done  so,  another  action  is  brought  by  one  of  his  copartners,  that 
action  cannot  be  stopped.  (2/) 

Actions  ivhere  one  partner  colludes  with  defendant. — If  a  person 
colludes  with  one  partner  in  a  firm  to  injure  the  other  partners,  the 
latter  can  jointly  sustain  an  action  against  such  perrson.  Tluis, 
where  the  bankers  of  a  firm  of  four  partners  knew  that  one  of 
them  was  in  the  habit  of  drawing  bills  in  the  name  of  the  firm  for 
his  own  private  purposes,  and  the  bankers  colluded  with  him  and 
kept  his  (iopartners  in  ignorance  of  what  was  going  forward,  and 
paid  the  funds,  when  due,  out  of  the  funds  standing  to  the  credit  of 


solvent?  Saying  that  a  banker  has  sus- 
pended payment  is  saying  that  he  can- 
not pay  his  debts.  A  temporary  inability 
to  pay  debts  is  insolvency.  The  charge 
of  suspending  payment  is  a  charge  of  in- 
solvency. Such  a  statement  will  instantly 
bring  all  the  creditors  of  a  banking-house 
upon  it,  and  completely  stop  their  busi- 
ness by  preventing  any  one  from  taking 
their  bills.  But  here  special  damage  is 
stated,  and  I  think  correctly  stated.  It 
has  been  objected  that  the  special  dam- 
age is  not  set  out  with  suflScient  cer- 
tainty. Even  if  that  were  so,  advantage 
could  be  taken  of  it  only  by  a  special 
demurrer.  In  my  opinion,  however,  the 
special  damage  is  clearly  and  distinctly 
set  out.  The  plaintiffs  state  that  they 
had  a  number  of  promissory  notes  out- 
standing and  in  circulation,  and  that  in 
consequence  of  these  libels  they  were 
called  upon  and  forced  and  obliged  to 
pay  those  notes ;  how  or  when  was  not 
material,  it  being  sufficient  that  they  de- 
clare that  they  have  thereby  lost  all  the 
benefit  and  advantage  which  would 
otherwise  have  accrued  to  them  in  their 


trade  and  business,  from  the  notes  re- 
maining outstanding  and  in  circulation. 
The  declaration  goes  even  further ;  it 
states  that  the  plaintiffs  have  suffered 
and  sustained  a  great  loss  in  raising  and 
procuring  sufficient  money  to  pay  and 
satisfy  their  several  notes.  It  appears 
to  me  that  the  declaration  is  unobjec- 
tionable, and  that  the  plaintiffs  are  en- 
titled to  judgment." 

While  a  suit  for  oral  slander  will  not 
lie  against  two  or  more  jointly,  yet  a  suit 
may  be  maintained  against  a  firm  the  • 
members  of  which  have  falsely  and 
fraudulently  recommended  an  insolvent 
person  as  worthy  of  credit,  thereby  in- 
ducing the  plaintiff  to  sell  such  person 
goods  on  credit,  which  the  defendan(s 
immediately  seized  for  a  debt  due  from 
such  person  to  them.  Patten  v.  Gunney, 
17  Mass.  182. 

(x)  See  Addison  v.  Overend,  6  T.  R. 
766 ;  Bleadon  v.  Hancock,  4  Car.  &  P. 
152.  See  Dockway  v.  Dickenson,  Comb. 
366. 

(2/)  Sedgworth  v.  Overend,  7  T.  R. 
279. 


465 


30 


279*  ACTIONS    AGAINST    PARTNERS.  [bOOK    II., 

tlie  firm,  it  was  held  that  an  action  lay  against  the  bankers  at  the 
suit  of  the  other  three  partners.  (3)19 

Actions  of  ejectment. — An  action  of  ejectment  for  the  recovery 
of  real  property  belonging  to  the  firm  ought  to  be  brought  in  the 
names  of  all  those  persons  in  whom  the  legal  estate  is  vested,  (a) 
If,  however,  one  partner  only  has  made  a  lease  of  the  partnership 
property,  then,  as  his  title  cannot  be  disputed  by  the  lessee,  notice 
to  quit  may  be  given  and  ejectment  maintained  *by  the 
-^  lessor  alone ;  and  if  he  alone  has  the  legal  estate,  the  cir- 
cumstances that  rent  has  been  paid  to  the  firm,  and  receipts  for  it 
have  been  given  by  all  the  partners,  will  not  affect  his  right  to  give 
the  notice  and  bring  the  action  in  his  own  name,  (b) 

(b)  Actions  against  the  firm. 

Actions  against  partners. — In  considering  who  ought  to  be  sued  in 
respect  of  a  breach  of  contract  committed  by  a  firm,  or  some  or  one 
of  its  members,  regard  must  be  had  in  the  first  instance  to  the  persons 
upon  whom  that  contract  is  legally  binding.  This  matter  has  been 
already  discussed  at  length  in  the  first  and  second  chapters  of  the 
present  book,  and  it  is  needless  to  repeat  what  has  there  been  said. 
Assuming,  therefore,  the  question  of  liability  to  be  determined,  it 
remains  only  to  consider  whether  all  the  persons  who  are  liable 
ought  to  be  sued  jointly,  or  whether  any  and  which  of  them  may 
be  sued  without  the  others.  If  there  is  any  doubt  on  this  question, 
the  proper  way  is  to  sue  them  all,  for  this  is  now  expressly  author- 
■  ized  to  be  done,  (c)  In  order,  however,  to  save  expense,  the  follow- 
ing; rules  will  be  found  useful.20 

(z)    Longmau    v.    Pole,    Moo.    &    M.  the  firm.     Cochrane  v.  Quackenbush,  29 

223.      Now,   the   other   partner   might  Wis.  376. 

be  joined    as    a   defendant.      See    ante  (a)  See  1  Chitty  on  Plead.  74. 

p.  *267,  note  {y).  (6)  See  Doe  v.  Baker,  2  B,  Moore  ]89. 

19.  Actions  where  one  partner  col-  (c)  Ord.  XVI.,  rr.  1,  4,  6.     Honduras 

ludes  with  defendant. — Two  of  three  Rail.  Co  v.  Tucker,  2  Ex.  D.  301.     See, 

partners  may  join  in  an  action  against  also,  Ord.  XXI.,  r.  20,  abolishing  pleas 

the  third   partner  and  others,  who,   in  in  abatement. 

collusion  with  such  third  partner,  wrong-  20.  In  general. — Where  a  suit  is 
fully  and  maliciously,  and  without  brought  against  a  firm  upon  a  partner- 
probable  cause,  attached  the  property  of  ship  debt,  the    names   of  the   partners 

466 


CHAP.  III.,  §  I.]  ACTIONS   EX   CONTRACTU.  280* 

Actions  ex  contractu. 

Actions  against  partners  on   contracts. — All    persons  who   are 
jointly  liable  on   a  contract  ought  to  be  sued  jointly,  (cZ)  unless 

must  be  proved ;  but  slight  evidence  as  Where,  in  an  action  against  two  as 
to  this  will  authorize  the  court  to  leave  partners,  it  appears  that  there  is  no 
the  question  of  partnership  to  the  jury,  partnership,  and  that  one  of  the  defend- 
Varnum  v.  Campbell,  1  McLean  (U.  S.)  ants  only  is  liable,  the  action  does  not 
313.  abate,  but  may  proceed  against  the  one 

In  an  action  against  the  makers  of  a  who  is  liable.  Francis  v.  Dickel,  68  Ga. 
note  signed  "A  and  B,"  it  is  unneces-    255. 

sary  to  allege  a  partnership  between  the  The  question  of  partnership  should  be 
makers,  although  that  would  be  more  put  in  issue  by  a  plea  in  abatement  prop- 
technical.  Davis  r.  Abbott,  2  McLean  erly  verified.  Shufeldt  v.  Seymour,  21 
(U.  S.)  29.  111.   524  ;  Warren  v.  Chambers,  12  111. 

Where,  on  the  face  of  the  pleadings,  124;  McKinney  v.  Peck,  28  111.  174. 
the  execution  of  a  note  declared  upon  When  a  proper  plea  denies  the  joint 
as  given  to  the  plaintiffs  as  partners  is  liability  and  the  partnership,  in  an  action 
admitted,  proof  of  the  partnership  of  on  an  apparently  joint  note,  the  partner- 
plaintiffs  is  unnecessary.  Pratt  v.  Wil-  ship  must  be  proved.  King  v.  Haines, 
lard,  6  McLean  (U.  S.)  27.     See,  also,    23  111.  340. 

Maret  v.  Wood,  3  Cranch  (U.  S.)  C.  C.  2.  A  defence  in  assumpsit,  good  to  one 
Where  several  are  sued  as  copart-  of  several  copartners,  is  good  to  all. 
ners,  the  plaintiff  may  discontinue  at  Cooley  v.  Sears,  25  111.  613 ;  Gribbin  v. 
any  time  as  to  such,  if  any,  as  are  not  Thompson,  28  111.  61. 
partners.  Wheeler  v.  Bulhird,  6  Port.  Under  the  law  of  Louisiana,  so  long 
(Ala.)  352;  Guzzam  v.  Bebee,  8  Port,  as  a  commercial  copartnership  exists, 
(Ala.)  49.  the  firm  must  be  sued  for  a  firm  debt; 

A  creditor  may  sue  one  or  all  of  the  individual  partners  can  be  charged  only 
members  of  a  firm,  on  a  debt  contracted  through  the  firm.  Liverpool,  &c.,  Nav. 
in  the  firm  name,  and  may  declare  on  Co.  v.  Agar,  4  Woods  (U.  S.)  201 ;  S.  C. 
the  demand  as  the  individual   liability    14  Fed.  Rep.  615. 

of  the  partner  or  partners  sued.  Mc-  Where  a  party  defendant  denies  that 
Culloch  V.  Judd,  20  Ala.  703.  he  was  a  member  of  the  firm  sued,  it  is 

A  plea  of  one  sued  as  a  partner  on  a  incumbent  on  the  plaintiff  to  prove  the 
note,  that  he  was  not  a  partner,  and  did  fact.  Atwater  v.  Colton,  18  La.  Ann. 
not  sign,  nor  authorize  any  one  to  sign    226. 

for  him,  is  a  good  plea  in  bar  denying  If  a  note. or  bond  be  signed  in  the 
the  note  sued  on.  Holman  v.  Carhart,  name  of  a  partnership,  any  one  of  the 
25  Ga.  608.  partners  may  be  sued  alone.     Griffin  v. 

To  a  suit  against  A  and  B,  as  partners,    Samuel,  6  Mo.  50. 
on  a  note  signed  "  A,"  a  plea  by  B  that        (d)  See  the  note  to  Cabell  v.  Vaughan, 
at  the  time  he  was  not  a  partner,  puts    1  Wms.  Saund.  291,  6;  Byers  i;.  Dobey,  1 
the  onus  on  the  plaintiff  to  prove  that    H.  Bl.  236 ;  Bonfield  v.  Smith,  12  Mees. 
he  was.     Strauss  v.  Waldo,  25  Ga.  641.    &  W.  405. 

467 


280^ 


ACTIONS    EX    CONTRACTU. 


[book    II., 


some  of  them  are  abroad,  (e)  This  rule  applies  to  actions  against 
partners  for  the  recovery  of  penalties  imposed  upon  them  by  stat- 
ute, (/)  and  to  actions  in  form  ex  delicto,  but  founded  in  substance 
on  a  breach  of  contract,  express  or  implied  ;(^)  but  it  is  subject  to 
certain  real  or  apparent  exceptions  which  require  notice.21 


(e)  See  3  and  4  Wm.  IV.,  c.  42,  |  8; 
JoU  V.  Lord  Carson,  4  C.  B.  249.  See, 
before  this  statute,  Sheppard  v.  Baillie,  6 
T.  K.  327. 

(  /■)  Bristow  V.  James,  7  T.  R.  257. 

[g)  Powell  V.  Lay  ton,  2  Bos.  &  P.  N. 
R.  365  ;  Buddie  v.  Willson,  6  T.  R.  369. 

2L  On  contracts,  generally.  —  Or- 
dinarily, a  suit  on  a  partnership  debt 
must  be  brought  against  all  the  part- 
ners. Bowen  v.  Crow,  16  Neb.  556.  But 
it  is  competent  for  a  person  having  a 
cause  of  action  against  a  firm,  on  a 
partnership  contract,  to  sue  one  or  more 
of  the  partners,  at  his  election.  Hicks 
V.  Maness,  19  Ark.  701 ;  Johnson  v.  Byrd, 

1  Hempst.  (U.  S.)  434  ;  Hamilton  v.  Bux- 
ton, 6  Ark.  24;  Burgen  v.  Dwinal,  11 
Ark.  314;  Hicks  v.  Bronton,  21  Ark. 
186;  Kent  v.  Wells,  Id.  411;  Ryerson 
V.  Hendrie,  22  Iowa  480  ;  Williams  v. 
Rogers,  14  Bush  (Ky.)  777;  Yates  v. 
Watson,  54  Mo.  585.  See,  also,  Green 
V.  Pyne,  1  Ala.  235;  McCuUough  v.  Judd, 
20  Ala.  703 ;  and,  in  some  of  the  states, 
judgment  may  be  rendered  against  less 
than  the  whole  number  sued.  White  v. 
Tudor,  32  Tex.  758  ;  Finney  v.  Allen,  7 
Mo.  416 ;  Williams  v.  Rogers,  14  Bush 
(Ky.)  777;  Dean  v.  Savage,  28  Conn. 
359 ;  Miles  v.  Von  Deyn,  6  N.  W.  Rep.  39. 

In  an  action  against  partners  on  an  ac- 
count, the  partnership  must  be  proved. 
Trowbridge  i;.  Sanger,  4  Ark.  179;  Alfred 
V.  Thompson,  5  Ark.  347  ;  Teller  v.  Mnir, 

2  Penn.  (N.  J.)  749. 

In  an  action  against  a  partnership  for 
goods  sold,  where  the  defence  is  that 
goods  sold  to  an  individual  member  of 


a  firm  were  sold  on  his  private  account, 
it  is  error  for  the  court  to  reject  letters, 
ofiered  in  evidence  by  the  defendant, . 
which  were  written  by  the  plaintifi"  to  a 
third  party,  and  were  to  the  effect  that 
the  account  was  against  the  individual 
member  of  the  firm.  Adams  v.  Eath- 
erly  Hardware  Co.  (Ga.),  3  S.  E.  Rep. 
430. 

If  one  partner  promises,  individually, 
to  pay  a  debt,  he  will  not  be  allowed  to 
show  that  it  was  due  jointly  from  him- 
self and  copartners.  Conley  v.  Good, 
Breese  (111.)  96. 

In  a  suit  upon  a  copartnership  note, 
either  member  of  the  firm,  if  the  note  is 
tainted  with  usury,  may  set  up  that  fact 
in  defence,  without  the  consent  of  the 
other  members ;  and  one  member  who 
has  purchased  the  interest  of  the  others, 
assuming  the  partnership  debts,  and  has 
renewed  the  note  tainted  with  usury,  by 
the  execution  of  a  new  one  in  his  own 
name,  may  set  up  this  defence.  But 
aliler  as  to  a  third  party  assuming  pay- 
ment of  a  note  thus  tainted.  Machinists* 
Bank  v.  Krum,  15  Iowa  49. 

If  a  partnership  and  an  individual  are 
joint  makers  of  a  note,  when  nothing 
appears  to  the  contraiy,  the  partnership 
is  liable  for  one-half  the  amount  of  the 
note.     Hosmer  v.  Burke,  26  Iowa  353. 

Where  (he  holder  of  a  note  signed 
with  the  firm  names  of  two  different 
firms,  sues  several  individuals  as  mem- 
bers of  said  firms,  and  it  appears  on  the 
trial  that  one  of  the  defendants  is  not 
liable  because  not  a  member  of  either 
firm,  and   also  that  another  of  the  de- 


468 


CHAP.  III.,  §  I.]  ACTIONS    EX    CONTRACTU. 


281* 


Actions  against  infant  partners. — In  the  first  place,  an   infant 
partner,  not  being  bound  by  any  *contract  entered  into  by  r;i-f,o-| 
or  on  behalf  of  the  firm,  ought  not  to  be  joined  as  a  de-  "- 
fendant  in  an  action  on  any  such  contract.  (/;)  22 


fendants  is  not  liable,  because  the  person 
who  signed  the  firm  name  of  one  of  the 
firms  had  no  authority  to  do  so,  nor  any 
authority  to  bind  this  particular  defend- 
ant, the  plaintiff  may  dismiss  his  action 
against  those  two  defendants  who  are  not 
liable,  and  take  judgment  against  those 
who  are  shown  to  be  liable.  Silvers  v. 
Foster,  9  Kan.  56. 

To  a  joint  declaration  against  part- 
ners, a  plea,  by  one,  that  they  did  not 
promise  within  five  years,  is  a  good  plea. 


Vallandingham  v.  Duval,  7  J.  J.  Marsh. 
(Ky.)  262. 

Where  a  firm  holding  a  lease  of 
premises  with  the  privilege  of  renewal, 
dissolves  partnership,  and  one  of  the 
former  partners  claims  the  right  of 
renewal,  the  other  partner  need  not  be 
made  a  party  to  an  action  to  remove 
him  from  such  premises.  Geheebe  v. 
Stanley,  1  La.  17. 

To  support  an  action  against  two  as 
acceptors  of  a  draft  in  their  partnership 


(h)  See  1  Wms.  Saund.  207,  a;  Chan- 
dler' V.  Danks,  3  Esp.  76 ;  Burgess  v. 
Merrill,  4  Taunt.  468 ;  Jaffrey  v.  Fre- 
bain,  5  Esp.  47.  Formerly  it  was 
thought  that  an  infant  partner  ought  to 
be  made  a  codefendant.  See  Ex  parte 
Henderson,  4  Ves.  164;  Gibbs  v.  Mer- 
rill, 3  Taunt.  307. 

22.  Actions  against  infant  part- 
ners.— In  Burgess  v.  Merrill,  cited  in 
the  text,  infancy  was  held  to  be  a  good 
replication  to  a  plea  of  non-joinder  of  an 
infant  partner  as  defendant ;  but  that 
case  has  not  been  followed  in  America. 
In  this  country,  where  one  of  several 
defendants  in  assumpsit  pleads  infancy 
and  gives  it  in  evidence  upon  the  trial, 
the  jury  may  find  a  verdict  for  the  in- 
fant defendant,  and  for  the  plaintiff" 
against  the  other  defendants,  and  judg- 
ment may  be  rendered  thereon.  Cutts 
V.  Gordon,  13  Me.  474;  Allen  v.  Butler, 
9  Vt.  126;  Barlow  v.  Wiley,  3  A.  K. 
Marsh.  (Ky.)  457 ;  Cole  v.  Penneli,  2 
Eand.  (Va.)  149;  Hartness  v.  Thomp- 
son, 5  Johns.  (N.  Y.)  160;  Tuttle  v. 
Cooper,  10  Pick.  (Mass.)  281;   Wams- 


ley  V.  Lindenberger,  2  Rand.  (Va.)  179  ; 
Woodward  v.  Newhall,  1  Pick.  (Mass.) 
500.  Thus,  where  in  an  action  on  a 
contract  defendant  pleads  non-joinder  of 
his  copartner,  a  reply  that  such  co- 
partner is  an  infant  is  bad  on  demurrer. 
Slocum  V.  Hooker,  13  Barb.  (N.  Y.)  536. 
In  such  a  case  the  plaintiff  may  enter  a 
nolle  prosequi  against  the  infant,  and  pro- 
ceed to  judgment  against  the  other  de- 
fendants. See  Woodward  v.  Newhall, 
1  Pick.  (Mass.)  500;  Kirby  v.  Cannon, 
9  Tnd.  371 ;  Ex  parte  Nelson,  1  Cow. 
(N.  Y.)  417 ;  Mason  v.  Dennison,  1-5 
Wend.  (N.  Y.)  66. 

Judgment  was  rendered  in  an  action 
against  a  partnership,  for  a  firm  debt,  in 
favor  of  two  of  the  partners,  on  the 
ground  of  their  infancy  at  the  time  the 
debt  was  contracted,  and  in  favor  of  the 
plaintiff  against  the  other  partner. 
Held,  that  the  firm  assets  could  be  ap- 
plied towards  the  payment  of  the  judg- 
ment against  the  adult  partner.  Whit- 
temore  v.  Elliott,  7  Hun  (N.  Y.)  518. 
S.  P.,  Gay  V.  Johnston,  32  N.  H.  167. 


469 


281* 


ACTIONS   EX   CONTRACTU. 


[book  II. ^ 


Actions  against  dormant  partners. — Secondly,  as  regards  dormant 
partners.  It  has  been  seen  that  they  are  liable  on  all  contracts  en- 
tered into  on  behalf  of  the  firm  to  wliich  they  belong,  and  whether 


name,  the  plaintiff  must  prove  the  part- 
nership, and  tliat  one,  at  least,  of  the  de- 
fendants accepted  the  draft.  Head  v. 
Sleeper,  20  Me.  314. 

If  the  narr.  charges  (he  partnership  in 
the  ordinary  way,  and  the  affidavit  ac- 
companying it  alleges  the  sum  sued  for 
to  be  due  from  A  and  B,  copartners, 
trading  as  A  &  Co.,  upon  a  note  filed 
with  the  declaration,  that  is  a  sufiBcient 
allegation  of  partnership  to  require  de- 
fendant to  deny  it  in  the  manner  pro- 
vided by  the  statute.  Thome  v.  Fox 
(Md.),  8  Atl.  Rep.  667. 

An  action  will  lie  against  one  partner 
who  makes  a  warranty  on  the  sale  of 
goods,  on  the  warranty,  without  joining 
the  other  partner.  Clarke  v.  Holmes,  3 
Johns.  (N.  Y.)  148;  Cookingham  v. 
Lasher,  38  Barb.  (N.  Y.)  656. 

Where,  in  an  action  against  three  de- 
fendants, sought  to  be  charged  as  part- 
ners, only  one  appears  and  defends,  and 
there  is  evidence  of  his  liability,  the 
objection  cannot  be  maintained  that 
there  is  not  sufficient  evidence  of  the 
liability  of  the  other  defendants ;  be- 
cause, if  they  were  not  served  with  pro- 
cess, a  judgment  would  not  affect  them, 
and  if  they  were  served  with  process, 
and  failed  to  appear,  their  default  is  an 
admission  of  their  liability.  Van  Eps 
V.  Dillaye,  6  Barb.  (N.  Y.)  244. 

Under  the  code,  in  an  action  against 
three  as  partners,  judgment  may  go 
against  the  two  who  alone  were  served 
and  appeared,  upon  proof  that  they 
alone  composed  the  firm.  Pruyn  v. 
Black,  21  N.  Y.  300. 

Where  separate  judgments  are  ren- 
dered against  the  defendants  in  an  ac- 
tion against  a  firm  on  a  partnership  ob- 


ligation, instead  of  a  joint  judgment 
against  all,  the  court  cannot  set  aside 
the  judgments  on  motion  made  more 
than  one  year  after  their  rendition. 
Judd  V.  Hubbell,  76  N.  Y.  543. 

It  is  a  good  defence  to  an  action,  on  a 
draft  of  a  firm,  that  one  of  the  defend- 
ants is,  in  fact,  the  owner  of  the  draft, 
and  that  plaintiff  has  no  title  thereto. 
Stettheiraer  v.  Stettheimer,  2  N.  Y.  St. 
Rep.  358. 

Where  three  defendants,  partners,  have 
been  served  with  process,  and  one  has 
pleaded,  judgment  against  him  is  erro- 
neous, without  first  taking  an  interlocu- 
tory judgment  against  the  other  two. 
Nelson  v.  Lloyd,  9  Watts  (Pa.)  22. 

In  a  suit  against  several  partners,  some 
of  whom  have  not  appeared,  if  the  plain- 
tiff declare  against  all,  he  may,  after 
verdict  against  those  who  have  appeared, 
have  judgment  against  those  who  have 
not.  Taylor  v.  Henderson,  17  Serg.  & 
R.  (Pa.)  453. 

Illustrations. — In  an  action  upon  the 
obligation  of  a  firm,  contracted  while  one 
of  the  members  was  a.  feme  sole,  but  who 
had  since  married — Held,  that  her  hus- 
band was  properly  joined  as  a  party 
defendant.    Keller  v.  Hicks,  22  Cal.  457. 

If  A,  being  a  partner  of  B,  executes 
certain  notes,  procures  B  to  endorse  them, 
and  then  delivers  them  to  the  firm  ta 
enable  it  to  replace  money  which  he 
owes  it,  and  thereupon  the  firm  offers 
the  notes  at  a  bank  for  discount,  and  the 
bank  discounts  them,  and  places  the  pro- 
ceeds to  the  credit  of  the  firm,  it  is  a 
question  for  the  jury  whether  or  not  a 
partnership  liability  is  not  thereby  in- 
curred, and  it  cannot  be  affirmed,  as 
matter  of  law,  tlrat  the  liability  is  merely 


470 


CHAP.  Ill,,  §  I.]  ACTIONS    EX    CONTRACTU. 


281  = 


such  a  contract  is  written  or  unwritten,  express  or  implied,  it  is 
clear  that  a  dormant  partner  may  be  sued  upon  it.  (i)  Dormant 
partners,  moreover,  ought  to  be  made  codefendants  in  an  action  on 
a  contract  binding  the  firm.  (^)  But  a  person  who  holds  himself 
out  to  another  as  the  only  person  with  whom  that  other  is  dealing, 
cannot  be  allowed  afterwards  to  say  that  such  other  was  also  deal- 
ing with  somebody  else,  [l)  23 


individual.  City  Bank  of  New  Haven's 
Appeal  (Conn.),  7  Atl.  Eep.  548. 

A  partner  dealing  in  the  name  of  his 
firm  was  inquired  of  by  the  parly  with 
whom  he  dealt,  of  what  persons  the  firm 
consisted,  and  replied,  of  himself  and 
another,  whose  names  he  gave  in 
writing.  In  a  suit  against  tlie  two  as 
partners,  they  pleaded  that  there  was 
another  partner  not  joined,  and  the 
promises  alleged  were  made  by  the 
three  jointly.  Upon  issue  joined,  the 
defendants  were  held  to  be  estopped  to 
prove  the  partnership  to  consist  of 
three.     Chase  v.  Deming,  42  N.  H.  274. 

In  a  suit  against  partners,  plaintiff 
declaring  especially  on  a  note,  with  the 
common  counts,  failed  to  allege  that  de- 
fendants were  partners.  Held,  that  he 
could  recover  either  on  the  note,  or, 
under  the  common  counts,  on  another 
note  signed  by  the  firm  name  by  one 
only  of  the  partners.  Hawley  v.  Hurd, 
56  Vt.  617. 

In  an  action  against  a  partnership  of 
B.,  \V.  &  Co  ,  W.  appeared  and  pleaded 
71071  assumpsit.  Afterwards  B.,  against 
whom  the  suit  had  been  abated,  entered 
his  appearance,  and  without  filing  any 
plea,  entered  into  the  trial  and  defended 
the  suit.  It  was  held  that  a  judgment 
against  B.  and  W.  only  was  not  errone- 
ous, as  they  did  not  discover,  by  a  plea 
in  abatement,  that  there  were  other 
partners,  and  as  B.,  by  appearing  and 
going  to  trial  without  a  separate  plea, 
had  bound  himself  to  abide  by  the  plea 

4 


of  his  other  partner.  Barnet  v.  Watson, 
1  Wash.  (Va.)  372. 

(i)  Robinson  v.  Wilkinson,  3  Price 
538 ;  Beckham  v.  Drake,  9  Mees.  &  W. 
79,  and  11  Id.  315,  overruling  Beckham 
V.  Knight,  4  Bing.  N.  C.  234,  and  see 
ante  p.  *178.  Of  course,  if  a  person  is 
sued  on  the  ground  that  he  is  a  dormant 
partner,  that  fact  must  be  proved,  for 
otherwise  no  case  will  be  made  against 
him.  See  Hall  v.  Bainbridge,  8  Dowl. 
583. 

[k)  See  Bonfield  v.  Smith,  12  Mees.  & 
W.  405  ;  Dubois  v.  Ludert,  5  Taunt.  609, 
where  it  was  held  that  a  dormant  partner 
ought  to  be  joined. 

(1)  See  De  Mautort  v.  Saunders,  1  B. 
&  Ad.  398 ;  Stansfeld  v.  Levy,  3  Stark. 
8.  Whether  a  defendant  has  so  held 
himself  out  is  a  question  for  the  jury. 
Compare  the  cases  in  the  last  note. 

23.  Actions  against  dormant  part- 
ners.— Dormant  and  secret  partners 
furnish  exceptions  to  the  rule  that  in 
actions  on  contract  against  partners  all 
the  ostensible  and  public  members  of  the 
firm  who  belonged  thereto  at  the  time 
of  the  making  of  the  contract  sued  on 
must  be  joined  as  defendants.  Page  v. 
Brant,  18  111.  37;  Mitchell  ?;.  Dale,  2 
Harr.  &  G.  (Md.)  159  ;  Jackson  v.  Alex- 
ander, 8  Tex.  109. 

Thus,  a  dormant  partner  is  an  allow- 
able, but  not  an  essential  party  to  a  suit. 
Desha  v.  Holland,  12  Ala.  513  ;  Mitchell 
V.  Dale,  2  Harr.  &  G.  (Md.)  159. 

In  an  ordinary  action  against  a  com- 

71 


281* 


ACTIONS    EX    CONTRACTU. 


[book  II,, 


One  partner  liable  if  others  are  not  disclosed. — If,  therefore,  a 
person  carries  on  business  in  his  own  name,  and  incurs  debts  in  so 


mercial  partnership,  to  recover  a  debt 
due  for  goods  sold,  a  dormant  partner 
who  is  not  a  privy  to  the  contract  need 
not  be  joined  with  the  ostensible  part- 
ners.    Jackson  v.  Alexander,  8  Tex.  109. 

In  the  case  of  a  dormant  partnership, 
an  attachment  of  the  stock  in  trade  in 
the  hands  of  the  ostensible  partner,  in  a 
suit  against  him  alone,  has  preference  to 
a  subsequent  attachment  of  the  same 
goods  by  another  person  in  an  action 
against  the  partners.  Lord  v.  Baldwin, 
6  Pick.  (Mass.)  348. 

Where  a  limited  and  dormant  part- 
nership is  carried  on  by  one  partner  in 
his  individual  name,  and  he  borrows 
money,  avowedly  for  the  use  of  the  part- 
nership, the  dormant  partners  will  be  lia- 
ble without  further  proof  that  the  money 
wetit  to  the  use  of  the  firm.  Otherwise, 
if  when  he  borrows,  he  makes  such  rep- 
resentation. Etheridge  v.  Binney,  9  Pick. 
(Mass.)  272. 

A  person  who  is  held  out  as  a  partner, 
or  as  a  dormant  partner,  may,  although 
he  has  not  signed  the  articles  of  part- 
ners'hip,  be  sued  and  held  jointly  with 
those  who  did  sign  them.  Wood  v.  Cul- 
len,  13  Minn.  394. 

In  assumpsit  for  goods  sold  and  deliv- 
ered, the  plaintifif  need  not  join  a  merely 
nominal  partner  of  the  purchaser  as  a 
defendant.  Hatch  v.  Wood,  43  N.  H. 
633. 

A  bill  against  dormant  partners,  after 
judgment  recovered  against  the  ostensi- 
ble partners,  cannot  be  sustained  with- 
out showing  special  cause  for  relief,  as 
that  the  plaintiff  was  kept  in  ignorance 
of  the  partnership  by  undue  means;  that 
he  has  used  due  diligence  to  inform  him- 
self, &c.  Penny  v.  Martin,  4  Johns.  (N. 
Y.)  Ch.  566. 


Under  the  code,  suits  for  debts  of  a 
limited  partnership  may  be  brought 
against  the  general  partners  only,  and 
a  levy  in  pursuance  thereof  on  firm 
property  binds  the  interests  of  all  the 
partners.  Artisans'  Bank  v.  Treadwell, 
34  Barb.  (N.  Y.)  553. 

The  plaintifl'  in  an  action  upon  an 
agreement  made  by  a  firm  need  not  join 
as  defendant  a  dormant  partner  therein, 
whom  he  did  not  know  to  be  a  partner 
when  the  agreement  was  made,  if  there 
was  nothing  in  the  style  of  the  firm  in- 
dicating the  existence  of  any  other  part- 
ner. Hurlbut  V.  Post,  1  Bosw.  (X.  Y.) 
28;  Brown  v.  Birdsall,  29  Barb.  (N.  Y.) 
549.  See.  also,  Farwell  v.  Davis,  65 
Barb.  (N.  Y.)  73. 

In  order  to  charge  a  dormant  partner 
on  a  firm  note,  it  must  be  shown  either 
that  the  loan  was  on  the  credit  of  the 
firm,  or  that  the  money  for  which  the 
note  was  given  was  used  in  the  business 
or  for  the  benefit  of  the  firm.  Fosdick 
V.  Vanhorn,  40  Ohio  St.  459. 

The  liability  of  a  dormant  partner 
may  be  avoided  by  proof  of  fraud  in 
forming  the  partnership,  if  no  part  of 
the  funds  has  been  received  by  such 
dormant  partner.  Mason  v,  Connell,  1 
Whart.  (Pa.)  381. 

A  failure  to  name  as  a  party  defend- 
ant, in  an  action  against  a  partnership, 
a  dormant  partner,  is  immaterial,  as  a 
judgment  will  bind  such  partner  as 
fully  as  though  made  a  party  to  the 
record.  Tynberg  v.  Cohen  (Tex.),  2  S. 
W.  Kep.  734. 

Although  a  partnership  may  be  open 
and  notorious  in  the  immediate  neigh- 
borhood of  the  place  of  business  of  the 
firm,  yet,  if  its  existence  be  not  known 
to  the  plaintiff,  and  one  member  of  the 


472 


CHAP.  III.,  §  I.]  ACTIONS    EX    CONTRACTU. 


281* 


doing,  he  may  be  properly  sued  alone  for  such  debts,  (m)  The  same 
holds  whenever  a  partner  enters  into  a  written  contract  in  which  he 
does  not  disclose  the  fact  that  he  is  acting  for  other  people,  for 
although  they  may  be  sued,  he  cannot  insist  that  they  shall  be 
sued,  (n) 


firm  make  the  contract  with  the  plain-  themselves  out  as  partners,  and  that  the 
tiffin  his  own  name,  and  credit  be,  plaintiff  had  dealt  witli  and  trusted  them 
upon  reasonable  grounds,  given  by  the  accordingly— i?e/d,  that  such  special  tind- 
plaintiff  to  him  alone,  an  action  upon  ing  was  not  inconsistent  with  the  general 
the  contract  may  be  sustained  against  verdict,  and  that  judgment  was  properly 
him,  without  joining  his  copartners  as  entered  thereon  for  the  plaintifi'.  Reber 
defendants.  Hagar  v.  Stone,  20  Vt.  106  ;  v.  Columbus,  &c.,  Co.,  12  Ohio  St.  175. 
Cleveland  v.  Woodward,  15  Vt.  302;  Where  a  firm  consisting  of  three  mem- 
Blin  V.  Pierce,  20  Vt.  25.  See,  also,  bers,  B.,  A.  and  M.,  did  business  under 
Farwell  v.  Davis,  66  Barb.  (N.  Y.)  73.  the  firm  name  of  "  B.  &  A.,"  and  every- 
where a  partnership  exists  between  thing  in  the  apparent  mode  of  transact- 
two  persons,  one  of  whom  is  a  dormant  ing  their  business  indicated  that  B.  and 
partner,  and  the  creditors  of  the  firm  A.  constituted  the  sole  members  of  the 
have  obtained  judgments  against  the  firm;  and  there  was  nothing  to  signify 
ostensible  partner,  founded  on  debts  to  ordinary  dealers  with  the  firm  that  M. 
created    on    the    partnership    account,  had  anything  to  do  with  it;  and  there 


upon  which  executions  have  been  issued 
and  returned  nulla  bona,  a  bill  in  equity 
against  both  partners  will  be  sustained, 
upon  the  allegation   that  the  dormant 


was  an  entire  omission  on  the  part  of  B. 
and  A.  to  communicate  tlie  fact  of  such 
connection  to  one  dealing  with  them; 
and  actual  ignorance   by   him    of  such 


partner  has,  by  fraudulent  connivance  connection,  and  apparent  good  fiiith  on 
with  the  ostensible  one,  obtained  the  his  part  in  treating  B.  and  A.  as  the  only 
possession  of  and  laid  claim  to  all  the  parties  interested,  it  was  held  tiiat  the 
partnership  assets,  in  fraud  of  the  credi-  referee  was  right  in  regarding  M.  as  a 
tors;  the  relief  which  equity  will  give  dormant  partner,  and  therefore  not  neces- 
is  to  subject  the  whole  assets  to  the  pay-  sary  to  be  joined  as  a  codefendant  with 
ment  of  such  debts.  How  v.  Kane,  2  B.  and  A.  North  v.  Bloss,  30  N.  Y. 
Chand.  (Wis.)  222.  374. 

Illustrations.— Where  one  or  more  (m)  See,  in  addition  to  the  cases  cited 
of  several  defendants,  sued  as  partners,  in  the  last  note,  Mullett  v.  Hook,  Moo. 
answered,  denying  that  they  were  mem-  &  M.  88;  Baldney  v.  Ritchie,  1  Stark. 
bers  of  the  firm,  or  indebted  to  the  plain-  338 ;  Doc  v.  Chippenden,  Abbott  on 
tifi"  on  the  cause  of  action  stated  in  the  Shipping  84;  Colson  v.  Selby,  I  Esp. 
petition,  and  on  the  trial  of  this  issue  452.  Dubois  v.  Ludert,  5  Taunt.  609,  is 
the  jury  returned  a  general  verdict  for  the  other  way,  but  cannot,  it  is  con- 
the  plaintiff",  and  also  found  specially,  ceived,  be  supported, 
under  the  direction  of  the  court,  that  the  (n)  See  Higgins  v.  Senior,  8  Mees.  & 
defendants  so  answering  were  not,  in  W.  834,  where  the  plaintiff"  knew  the 
fact,  members  of  the  firm,  but  had  held    defendant  was  acting  as  agent. 

473 


281*  ACTIONS    EX    CONTRACTU.  [bOOK    II., 

Statutory  exceptions  to  general  rule. — Thirdly,  to  the  general  rule 
that  all  persons  jointly  liable  on  a  contract  ought  to  be  sued  jointly,, 
there  are  a  few  statutory  exceptions.  Thus,  by  the  Carriers'  act,  a 
person  sued  as  a  common  carrier,  and  not  on  any  special  agreement, 
cannot  ^require  his  copartners  to  be  joined  ;(o)  and  by  the 
-'  Companies'  act,  1862,  members  of  a  registered  company, 
who  know  that  it  has  carried  on  business  for  more  than  six  months 
^vith  less  than  seven  members,  are  severally  liable  for  the  debts  of 
the  company  contracted  after  such  six  months,  and  cannot  require 
the  other  members  to  be  joined,  [p) 

Actions  on  joint  and  several  contracts. — With  respect  to  joint 
and  several  contracts,  the  rule  now  is  that  all  persons  liable  on 
them  may  be  sued  jointly  or  separately,  or  in  the  alternative  in 
one  action.  (9')  2-i 

(0)  11  Geo.  IV.,  and   1  Wm.  IV.,  c.  individual  debt,  but  if  the  creditor  treat 

68   ^§  5  6.  the  contract  as  joint,  by  suing  all  the 

(p)  25  and  26  Vict.  c.  89,  §  48.  partners,  he  must  prove  a  joint  contract 

(g)  Ord.  XVI.,  rr.  1,  4,  6.     See,  as  to  as  alleged,  and  cannot  amend  by  discon- 

the  old  law,  the  note  to  Cabell  i;.Vaughan,  tinuing  as  to  part  of  the  defendants  and 

1  Wms.  Saund.  291,  (7;  and  as  to  staying  joining   a  count  on  a  contract   by  one 

one  action,  when  the  creditor  has  been  only,  in  order  to  meet  the  proof  which 

satisfied  in  another,  see  Carne  n.  Legh,  isof  such  a  contract.    Miller  r.  Northern 

6  Barn.  &  C.  124 ;  Nesbitt  v.  Howe,  8  Ir.  Bank,  &c.,  34  Miss.  412. 

L.  Rep.  273.  The  liability  of  those  composing  the 

24.  Actions    on  joint    and    several  firm  for  a  firm  debt  is  joint  and  several, 

contracts.— The  doctrine  of  courts  of  and  judgment  may  be  rendered  against 

equity  that-  partnership  debts  are  joint  any  one  or  more  of  the  copartners  with- 

and  several  does  not  obtain  in  courts  of  out  the  joinder  of  others.     Simpson  v. 

law.     Exchange  Bank  v.  Ford,  7  Colo.  Schulte,  21  Mo.  App.  639. 

3]^4  On  a  firm  note,  in   terms   promising 

The  mere  fact  that  the  defendants  are  jointly  and  severally,  the  partner  who 

partners  in  the  practice  of  medicine,  does  signed  the  firm  name  may  be  sued  alone, 

not  render  them  jointly  liable  for  the  Snow  v.  Howard,  35  Barb.  (N.  Y.)  55. 

expenditures  of   each  other  having  no  In   Devaynes  v.  Noble   (1   Mer.   529, 

connection  with  their  partnership  busi-  563,  564)  the  Master  of  the  Rolls  said  : 

ness  as  physicians.     Thompson  v.  How-  "It  may  be  proper,  however,  to  observe 

ard   2  Ind.  245.  tliat  the  common  law,  though  it  professes 

All  partnership  contracts  are  declared  to   adopt    the    lex    mercatoria,    has    not 

by  statute  to  be  joint  and  several ;  there-  adopted  it  throughout  in  what  relates  to 

fore,  in  a  suit  against  one  partner,  counts  partnership  in  trade.     It  holds,  indeed, 

on  a  firm  debt  for  which  he  is  severally  that  although  partners  are  in  the  nature 

liable,  may  be  joined  with  counts  on  an  of  joint  tenants,  there  shall  be  no  surviv- 

474 


CHAP.  III.,  §  I.]    ACTIONS    AGAINST    PARTNERS. 


282^ 


Actions  on  contracts  not  binding  on  firm. — The  previous  remarks 
have  been  addressed  to  th-e  case  of  actions  on  contracts  binding  the 
firm.  But  a  contract  may  be  entered  into  by  a  partner  and  not 
bind  the  firm,  either  because  it  was  not  entered  into  on  behalf  of 
the  firm,  or  because  if  it  was,  the  partner  entering  into  it  exceeded 
his  authority,  express  and  implied.  In  such  cases,  the  old  rule  was 
that  the  partner  contracting,  and  no  one  else,  ought  to  be  sued.  If 
he  contracted  as  a  principal,  he  ought  to  be  sued  on  the  contract ; 
whilst  if  he  contracted  as  an  agent,  he  ought  to  be  sued  as  having 
done  so  without  authority,  (r)  If  a  partner  entered  into  a  contract 
on  behalf  of  the  firm,  but  exceeded  his  authority,  and  the  contract 
did  not  bind  the  firm,  and  the  firm  repudiated  it,  the  partner  con- 
tracting, and  not  the  firm,  ought  to  have  been  sued  for  money  paid 
to  him  under  it,  and  sought  to  be  recovered  back,  (s)  But  now  in 
cases  of  this  description,  whenever  there  is  any  doubt  as  to  wha 
ought  to  be  sued,  the  prudent  course  is  to  sue  all  the  parhiers, 
and  so  to  frame  the  statement  of  claim  as  to  be  able  to  obtain 
judgment  against  the  right  persons  according  to  the  evidence  on 
the  trial.  (^)  25 

orship  between  them  in  point  of  interest,  to  distinguish  them  from  ordinary  part- 
Yet,  with  regard  to  partnership  contracts,  nership  debts  ?" 

it  applies  its  own  peculiar  rule,  and,  be-        (r)  See  Lewis  v.  Nicholson,  18  Q.  B. 

cause  they  are  in  form  joint,  holds  them  503. 

to  produce  only  a  joint  obligation,  which        (s)  See  Hudson  i;.  Robinson,  4  Mau. 

consequently  attaches  exclusively  upon  &  S.  475. 

the  survivors  ;  whereas,  I  apprehend,  by  {t)  See  Ord.  XVI.,  r.  1.  Honduras 
the  general  mercantile  law,  a  partner-  Rail.  Co.  v.  Tucker,  2  Ex.  D.  301. 
ship  contract  is  several  as  well  as  joint.  25.  Actions  on  contracts  not  bind- 
That  may  probably  be  the  reason  why  ing  on  firm. — In  a  suit  against  part- 
courts  of  equity  have  considered  joint  ners,  if  one  of  them  shows  that  the  name 
contracts  of  this  sort  (that  is,  joint  in  of  the  firm  was  put  to  the  note  without 
form)  as  standing  on  a  different  footing  his  authority,  and  that  the  debt  was  not 
from  others.  The  cases  of  relief  on  joint  a  firm  debt,  and  he  is  discharged  by 
bonds  may  be  accounted  for  on  the  the  jury,  judgments  may  be  entered, 
ground  of  mistake  in  the  manner  of  for  him  and  against  his  partner.  And 
framino-  the  instrument ;  and  it  may  be  in  such  a  case  the  holder  of  the  note 
said  that  equity  gives  to  them  no  other  may  bring  a  several  suit  against  the 
effect  than  it  was  the  intention  of  tlie  partner  liable  and  recover  a  several 
parties  themselves  to  have  given  to  judgment.  Parker  v.  Jackson,  16  Barb, 
them.  But  how  is  it  possible  to  explain  (N.  Y.)  33. 
the  cases  upon  partnership  notes,  so  as 

475 


283^ 


ACTIONS   EX   DELICTO. 


[book  II., 


*Actio7is  ex  delicto.  r*9,R'\ 

Actions  of  tort  against  partners. — It  is  not  every  tort  which, 
though  committed  by  several  persons  acting  together,  is  legally  im- 
putable to  them  all  jointly  ;(w)  but  supposing  a  tort  to  be  imputa- 
ble to  a  firm,  an  action  in  respect  of  it  may  be  brought  against  all 
or  any  of  the  partners.  If  some  of  them  only  are  sued,  they  can- 
not insist  upon  the  other  partners  being  joined  as  defendants,  (a;) 
and  this  rule  applies  even  where  the  tort  in  question  is  committed 
by  an  agent  or  servant  of  the  firm,  and  not  otherwise  by  the  firm 
itself  (2/)  But  there  is  a  distinction  between  ordinary  actions  of 
tort  and  those  which  are  brought  against  persons  in  respect  of  their 
common  interest  in  land,  for  all  joint  tenants,  or  tenants  in  com- 
mon, ought  to  be  joined  in  an  action  for  an  injury  arising  from 
the  state  of  their  land; (2)  and  this  rule  applies  to  partners  as  well 
as  to  persons  who  are  not  partners.26 


(u)  See  2  Wms.  Saund.  117,  b  and  c  ; 
1  Chitty  on  Plead.  96,  97. 

(x)  Sutton  V.  Clarke,  6  Taunt.  29. 

iy)  Mitchell  v.  Tarbutt,  5  T.  R.  649; 
Ansel  1  V.  Water  house,  6  Mau.  &  S.  385. 

(2)  1  Wms.  Saund.  298,/  and  g,  and 
Mitchell  V.  Tarbutt,  5  T.  K.  649. 

26.  Actions  of  tort  against  partners 
generally. — An  attachment  may  be 
sued  out  against  one  of  several  partners, 
without  joining  the  others.  Green  v. 
Pyne,  1  Ala.  235. 

When  persons  occupying  relations  to 
others  as  partners  have  obtained  undue 
advantage  of  the  latter  by  means  of  false 
representations  and  unlawful  acts,  they 
are  answerable  in  solido  for  whatever  loss 
has  been  incurred  thereby,  irrespective 
of  their  obligations  as  partners.  Baldy 
V.  Brackenridge  (La.),  2  So.  Rep.  410. 

A  firm  is  liable  for  an  injury  caused 
by  the  negligence  of  one  of  the  partners, 
or  an  employee  of  the  firm,  while  trans- 
•acting  its  legitimate  business.  Linton 
V.  Hurley,  14  Gray  (Mass.)  191. 

Creditors  of  a  firm  sued  those  whom 


they  supposed  to  be  the  partners,  and 
attached  the  firm  property,  after  its  con- 
veyance, by  bill  of  sale  in  the  firm 
name,  to  third  persons,  claiming  that 
the  conveyance  was  fraudulent;  and,  in 
replevin  brought  by  the  transferees 
against  the  attaching  officer,  the  plain- 
tiffs sought  to  show  by  the  partnership 
articles  that  one  of  the  attachment  de- 
fendants was  not  a  partner  in  the  firm, 
but  that  his  mother  was  the  partner. 
Held,  that  it  was  open  to  the  defendant 
to  show  that  the  son  was  the  real  part- 
ner, and  was  held  out  as  such,  although 
he  signed  the  partnership  article?  in 
the  name  of  his  mother.  Bishop  v. 
Austin  (Mich.),  33  N.  W.  Rep.  525. 

An  action  on  the  case  for  negligence 
occasioning  the  loss  or  destruction  of  a 
slave  hired  by  plaintiff  to  a  copartner- 
ship may  be  maintained  against  one  of 
the  members  of  the  firm,  without  join- 
ing the  other  partners.  So,  if  the  neg- 
ligence be  that  of  an  agent  of  the  co- 
partnership. White  V.  Smith,  12  Rich. 
(S.  C.)  595. 


476 


CHAP.  III.,  §  I.]  EQUITABLE   ACTIONS.  283* 

B.  Actions  in  respect  of  equitable  rights. 

Parties  to  actions  in  the  Chancery  Division. — Actions  by  and 
against  partnersliips  for  the  specific  performance  or  the  rescission 
of  contracts,  for  taking  agency  accounts,  as  well  as  in  respect  of 
frauds,  breaches  of  trust,  and  other  matters,  are  by  no  means  un- 
usual ;  and  an  action  by  a  creditor  of  a  firm  to  obtain  payment 
out  of  the  estate  of  a  deceased  partner,  is  a  matter  of  almost  daily 
occurrence,  (a)  27 

As  a  general  rule,  an  action  in  the  Chancery  Division  by  or 
against  an  ordinary  partnership  will  be  defective  for  want  of 
parties,  unless  all  the  partners  are  before  the  court.  But  it  was 
early  held  that  where  some  partners  are  abroad,  a  suit  against 
those  who  remain  may  be  prosecuted  with  effect,  and  a  decree  be 
obtained  against  them  for  payment  of  the  whole  of  the  amount 
due  from  the  firm.  (6) 

All  the  members  of  a  firm  ought  to  be  parties  to  an  action  *for 
a  general  account;  (c)  and  in  an  action  for  payment  of  a 
-^  partnership  debt  out  of  the  assets  of  a  deceased  partner 
the  surviving  partners  ought  to  be  parties,  {d)  But  if  the  ground 
of  action  is  fraud,  it  is  not  necessary  to  join  a  partner  not  impli- 
cated in  it  and  not  sought  to  be  made  liable,  (e) 

Actions  against  agents. — An  agent  of  the  firm  may  be  sued  for 

(a)  See,   on    this   subject,  book  IV.,  the  survivors  of  a  partnership  to  stand 

ch.  3.  in  the  place  of  a  deceased  partner  and 

27.  Actions  in  respect  of  equitable  to  satisfy  his  demands  upon  the  firm, 

rights.— Except  in  case  of  the  death  of  cannot,  in  a  suit  to  settle  the  partner- 

a  copartner,  creditors  of  a  partnership  ship  affairs,  object  that  the  representa- 

can    enforce    their    claims,    which    are  tives  of  the  deceased  should  have  been 

purely   legal,  against   the   property   of  parties.     Waugh  v.  Mitchell,  1  Dev.  & 

the  partnership,  only  at  law.     Parish  v.  B.  (N.  C.)  Eq.  510. 
Lewis,  1  Freem.  (Miss.)  Ch.  299.  {b)  See   Darwent  v.  Walton,   2   Atk 

One  who  was  a  partner  when  a  mort-  510 ;  Cowslad  v.  Cely,  Prec.  in  Ch.  83 

gage  was  given  to  the  firm  (but  in  the  and  see  Orr  v.  Chase,  1  Mer.  729. 
name   of   one   partner  only),  and   also        (c)  Coppard  v.  Allen,  2  De  G.,  J  &  S. 

when   advances   were   afterwards   made  173. 

thereon  by  the  firm,  and  when  the  bill        [d)  Ex   parte   Hodgson,   31    Ch.   D. 

was  filed,  ought  to  be  a  party  to  a  suit  177  ;  Hills  v.  M'Rae,  9  Hare  297.     See,. 

to  foreclose.  De  Greiff  v.  Wilson,  3  Stew,  also,  infra,  book  IV.,  ch.  3,  'i  2. 
(N.  J.)  435.  (e)  See   Plumer  v.  Gregory,   18   Eq. 

A  person  who  has  covenanted  with  621 ;  Atkinson  v.  Mackreth,  2  Eq.  570. 

477 


284*  ACTIONS    BY    AXD    AGAINST    PARTNERS         [bOOK    II., 

an  account  by  all  the  partners,  although  he  only  knew  of  one  of 
them,  and  was  employed  by  and  has  transacted  business  with  that 
one  alone.  (/)  At  the  same  time,  an  agent  is  only  liable  to  account 
to  his  principal ;  and  therefore,  if  a  person  has  been  employed  by 
one  partner  only  as  principal,  or  has  been  induced  by  that  partner 
to  believe  that  he  alone  was  the  principal,  in  such  a  case  the  other 
partners  have  no  right  to  eall  the  person  so  employed  to  account 
with  them.(^)  On  the  other  hand,  if  a  person  has  throughout 
dealt  with  some  partners  only,  and  has  all  along  treated  them  as 
principals,  he  can  be  compelled  by  them  to  account,  and  he  cannot 
successfully  insist  that  the  other  partners  ought  to  be"  parties  to  the 
action.  (A) 

Actions  by  surviving  partner. — A  surviving  partner  may  sue  an 
agent  of  the  firm  for  an  account  without  making  the  executors  of 
the  deceased  partner  parties,  (i)  for  the  surviving  partners  are  the 
proper  pei-sons  to  get  in  and  give  receipts  for  debts  owing  to  the 
iirra.  [k) 

3.  Actions  by  and  against  partners  where  a  change  in  the  firm 
has  occurred. 

Effect  of  change  in  firm  on  actions  by  and  against  it. — In  the 
preceding  remarks  upon  the  persons  who  ought  to  sue  and  be  sued 
when  a  rig-ht  is  sought  to  be  enforced  bv  or  against  a  firm,  it  has 
been  assumed  that  no  change  in  the  members  of  the  firm  has  oc- 
curred between  the  period  when  the  right  in  *question  p^.^^.- 
accrued  and  the  time  when  the  action  to  enforce  it  is  ^ 
brought.  It  is  proposed  now  to  consider  to  what  extent  the  rules 
above  established  require  modification,  when  some  such  change  has 
taken  place  by  reason  either  of  the  introduction  of  a  new  partner, 
or  of  the  retirement,  death  or  bankruptcy  of  an  old  one.28 

(/)  See  Killock  v.  Greg,  4  Russ.  285 ;  (k)  See   Philips   v.    Philips,  3   Hare 

Anon.,  Godb.  90.  281 ;   Brasier  v.  Hudson,  9  Sim.  1. 

(g)  See  Killock  f.  Greg,  4  Russ.  285;  28.  Effect    of   change    in    firm    on 

Maxwell  I).  Greig,  1  Coop.  Cas.  in  Ch.  491.  actions    by   and    against    it. —  Where 

(h)  Benson   v.  Hadfield,  4  Hare  32 ;  one  partner  sells  his  share  in  the  part- 

and  see  Aspinall  v.  The  London  and  N.  nership  stock  to  a  stranger,  and  receives 

W.  Rail.  Co.,  11  Hare  325.  payment  therefor,  and  the  purchaser  be- 

(i)  Haig  V.  Gray,  3  De  G.  &  S.  741.  comes  a    partner  in  the  concern,  such 

478 


€HAP.  III.,  §  I.]    WHERE    A    CHANGE    HAS    OCCURRED.  285* 

First,  with  respect  to  changes  causetl  by  the  introduction  of  new 
partners  and  the  retirement  of  old  ones. 

Alterations  made  by  Judicature  acts. — By  section  25,  clause  6,  of 
the  Judicature  act,  1873,  debts  may  now  be  assigned  by  writing 
and  notice  to  the  debtor  so  as  to  entitle  the  assignee  to  sue  for 
them  in  his  own  name.  Consequently,  if  on  the  introduction  of 
a  new  partner,  or  the  retirement  of  an  old  partner,  the  debts  due 
to  the  old  firm  are  thus  assigned  to  the  new  firm,  the  new  firm  can 
sue  in  respect  of  them,  either  in  its  mercantile  name  or  in  the 
names  of  its  members.  Again,  a  new  partner  may,  it  is  appre- 
hended, always  be  joined  in  an  action  to  recover  a  debt  or  enforce 
a  demand  in  which  he  has  an  interest,  provided  his  joinder  does 
not  prejudice  the  rights  of  the  defendants.  Further,  if  an  incom- 
ing partner  has  agreed  with  his  copartners  to  take  upon  himself 
the  debts  and  liabilities  of  the  old  firm,  they  can  require  hira  to 
be  made  a  defendant  for  their  own  partial  indemnity.  {I) 

'When  new  partner  can  be  sued. — Except,  however,  in  these  cases 

purchase  and  payment  will  not  have  the  or  his  executor  or  aflministrator  to  sue 
effect  to  relieve  the  share  of  the  stock  of  alone  for  his  share,  without  the  consent 
the  remaining  partner  from  liability  for  of  the  debtor  to  such  severance ;  but  all 
the  debts  of  the  old  firm.  Nixdorf  v.  the  partners,  if  living,  must  join  in  the 
Smith,  16  Pet.  (U.  S.)  132.  action ;  and   if  any   of  them   be   dead, 

In  a  suit  by  two,  as  late  partners,  it  the  action  must  be  brought  by  the  sur- 
is  admissible  for  the  defendant,  on  the  vivor  or  survivors.  Peters  v.  Davis,  7 
general  issue,  to  prove  that  no  partner-  Mass.  257  ;  Austin  v.  Walsh,  2  Id.  405. 
ship  existed  at  the  time  of  the  contract.  Where  a  creditor  of  a  firm  which  is 
Starke  v.  Kenan,  11  Ala.  818.  dissolved  takes  in  payment  a  note  of  the 

In  an  action  by  several  alleging  them-  successors  of  the  firm,  not  knowing  of 
selves  to  be  copartners,  the  general  issue  the  dissolution,  and  believing  the  note 
pleaded  does  not  admit  that  the  plain-  to  be  that  of  the  firm,  he  may  sue  on  the 
tiffs  were  the  persons  composing  that  original  claim  without  proving  that  he 
partnership  when  the  contract  declared  was  fraudulently  induced  lo  take  the 
■on  was  made ;  but  it  is  an  admission  of  note.  Buxton  v.  Edwards,  134  Mass. 
the  existence  of  a  copartnership  of  that  567. 
name.     Norcross  v.  Clark,  15  Me.  80.  Two  partners  who  make  a  special  con- 

A  dissolution  of  a  partnership  by  the  tract  to  do  work  for  a  third  peison  must 
death  of  one  of  the  partners,  or  other-  join  as  plaintiffs  in  a  suit  on  the  con- 
wise,  and  an  adjustment  of  the  partner-  tract,  even  though  the  firm  be  dissolved 
ship  concerns,  will  not  be  such  a  sever-  before  the  completion  of  the  work.  Fish 
ance  of  a  joint  demand  in  favor  of  the  v.  Gates,  133  Mass.  441. 
partnership  as  will  entitle  either  partner        {1}  Ord.  XVI.,  rr.  48,  et  seq. 

479 


285^ 


ACTIONS    BY    AND    AGAINST    PARTNERS         [bOOK    II., 


an  incoming  partner  can  neither  sue  nor  be  sued  in  respect  of  a 
liability  of"  the  old  firm,  unless  there  is  some  agreement,  express  or 
implied,  between  himself  and  the  person  suing  him  or  being  sued 
by  him.(m) 

As  regards  negotiable  instruments,  indeed,  any  persons  who  can 
agree  to  sue  jointly  upon  them  may  do  so,  provided  the  instrument 
is  in  such  a  state  as  to  pass  by  deliv'ery;  therefore,  if  a  bill  or  note, 
endorsed  in  blank,  is  given  to  a  firm  consisting  of  certain  individ- 
uals, who  afterwards  take  in  a  new  partner,  they  and  lie,  or  some 
or  one  of  them,  may  sue  on  that  bill  or  note,  (/i) 29 


(wi)  See,  accordingly,  Wilsford  v. 
Wood,  1  Esp.  182;  Ord  v.  Portal,  3 
Camp.  239,  note;  Waters  v.  Paynter, 
Chitty  on  Bills  406  (10th  ed.),  note  5; 
Vere  v.  Ashby,  10  Barn.  &  C.  288; 
Young  V.  Hunter,  4  Taunt.  582.  See 
Radenhurst  v.  Bates,  3  Bing.  463.  See 
ante  book  II.,  ch.  2,  §  3. 

in)  See  Ord  v.  Portal,  3  Camp.  239, 
and  ante  p.  *274. 

29.  When  new  partner  may  be  sued. 
— The  dissolution  of  a  firm  by  agreement 
between  the  members  thereof  will  not 
affect  the  rights  of  its  creditors,  though 
the  terms  of  such  dissolution  will  fre- 
quently be  enforced  by  the  courts,  as 
between  the  parties  to  such  agreement. 
Hudgins  v.  Lane,  11  Bankr.  Reg.  462. 

An  incoming  partner  will  not  be  lia- 
ble for  an  old  debt  of  the  firm,  unless 
there  is  a  novation  of  the  debt,  by  a  new 
promise,  by  the  entire  new  firm,  upon  a 
valid  consideration,  and  a  discharge  of 
the  old  firm  upon  the  old  debt.  Sten- 
burg  V.  Callanan,  14  Iowa  251. 

Where  an  attorney  holds  moneys  of  a 
dissolved  firm  composed  of  three  part- 
ners, he  is  chargeable  in  trustee  process, 
in  an  action  against  a  new  firm  com- 
posed of  two  members  of  the  old  firm 
and  a  third  person,  unless  some  hostile 
claim  be  made  by  the  creditors  of  the 
old  firm.     Burnell  v.  Weld,  59  Me.  423. 


As  to  the  incoming  partner's  rights, 
and  his  liability  to  be  sued  on  a  firm 
debt  existing  at  the  time  of  his  coming 
into  the  firm,  see  Mores  v.  Soc.  for 
Destitute  Children,  19  N.  Y.  Week. 
Dig.  247. 

Illustrations. — Plaintiff'  sold  goods 
to  C.  &  D.,  who  subsequently  sold  the 
same  goods  to  C,  D.  &  E.  Held,  that 
they  could  recover  against  C.  &  D.,  who 
could  not  change  the  first  contract  by 
their  own  act  so  as  to  charge  the  third 
partner.  Atwood  v.  Lockhart,  4  Mc- 
Lean (U.  S.)  350. 

In  1843  A,  B  and  C  were  partners, 
doing  business  under  the  firm  of  A,  B 
&  Co.  In  1844  A  and  C  formed  a  part- 
nership under  the  firm  of  A  &  C.  The 
latter  firm  were  sued,  as  the  firm  of  A 
&  C,  for  a  debt  contracted  by  the  former 
firm.  Held,  that  A  and  C  were  liable 
only  in  a  suit  against  the  former  firm. 
Fagely  v.  Bellas,  17  Pa.  St.  67. 

To  an  attachment  suit  against  two 
partners  for  a  firm  debt,  one  of  them 
pleaded  in  abatement.  Subsequently 
the  partnership  was  dissolved,  after 
which  the  other  partner  interposed  a 
general  denial.  Held,  that  both  de- 
fendants were  in  court,  notwithstanding 
the  plea  in  abatement. 
Overmier,  64  Tex.  57. 


480 


CHAP.  III.,  §  I.]   WHERE   A   CHANGE   HAS   OCCURRED.  286* 

^Effect  of  retirement  of  old  partner. — So,  as  regards 
-■  changes  occasioned  by  the  retirement  of  a  partner.  It  has 
been  already  shown  that  the  retirement  of  a  partner  in  no  way 
affects  his  rights  against  or  obligations  to  strangers  in  respect  of 
past  transactions.  Subject,  therefore,  to  the  above  observations,  a 
retired  partner  ought  to  join  as  a  plaintiff,  and  be  joined  as  a  de- 
fendant, in  every  action  to  which,  had  he  not  retired,  he  would 
have  been  a  necessary  party.  This  rule  holds  good  even  where  a 
contract  is  entered  into  before,  and  the  breach  of  it  occurs  after  the 
retirement  of  a  partner,  (o)  In  one  case,  indeed,  it  was  held  at  Nisi 
Prius  that  where  two  partners  sold  goods,  and  they  aflerwards  dis- 
solved partnership,  an  action  for  the  price  of  those  goods  was  sus- 
tainable by  the  one  partner  who  continued  to  carry  on  the  business 
of  the  late  firm ;  (p)  but  the  propriety  of  this  decision  is  more  than 
questionable.  Whether,  however,  it  is  now  necessary  to  join  as  a 
plaintiff  a  retired  partner  against  whom  the  defendant  has  no  claim,, 
and  who  has  no  beneficial  interest  in  what  is  sought  to  be  recovered,, 
admits  of  some  doubt. 

Sometimes  one  partner  retires  and  a  new  partner  comes  in,, 
and  an  agent  of  the  firm,  in  ignorance  of  the  change  which  has. 
occurred,  enters  into  a  contract  on  behalf  of  the  firm ;  in  such  a 
case  the  members  of  the  new  firm  may  sue  on  the  contract,, 
unless  the  defendant  is  prejudiced  by  their  so  doing,  (q)  The 
liability  of  the  retired  partner  on  such  a  contract  will,  how- 
ever, cease  if  the  creditor  sues  the  new  firm  and  recovers  judg- 
ment against  it.  (r)  30 

Fresh  contract. — And  a  new  firm  may  sue  or  be  sued  in  respect 


(o)  See  Dobbin  v.  Foster,  1  Car.  &  K.  partner  does  not  operate  to  discharge  a 

323.  debt   as   against    the   other.      Evans   v. 

(p)  Atkinson  v.  Laing,  Dowl.  &  R.  Carey,  29  Ala.  99. 
N.  P.  Cas.  16.  Three  persons  being  sued  as  partners, 

(q)  Mitchell  v.  Lapage,  Holt   N.  P.  proof  that  after  part  of  the  account  sued 

Cas.  253.     But  see  Boulton  v.  Jones,  2  upon  was  created,  and  the  partnership 

Hurlst.  &  N.  564.  dissolved,  the  retiring  partner  paid  the 

(r)  See  Scarfe  v.  Jardine,  7  App.  Cas.  others  a  sum  of  money  to  cover  his  re- 

345,  noticed  ante  pp.  *46  and*197.  sponsibility  for  the  firm  debts,  is  irrele- 

30.  Effect  of  retirement  of  old  part-  vant  and  inadmissible.    Gooden  v.  Mor« 

ner. — A  parol  agreement  to  release  one  row,  8  Ala.  486. 

481  31 


286*  ACTIOXS    BY    AND    AGAINST    PARTNERS         [bOOK    II., 

of  a  fresh  contract  entered  into  by  or  with  it  to  pay  a  clel)t  owing 
to  or  by  an  old  firm.  Thus,  where  A  was  indebted  to  B,  and  after- 
wards C  entered  into  partnership  with  B,  and  A  contracted  a 
further  debt  with  both,  and  then  settled  an  account  with  both,  as 
well  upon  what  was  due  to  B  before  his  partnership  with  C,  as 
upon  the  debt  contracted  afterwards,  it  was  held  that  B  and 
*C  might  join  in  an  action  of  assumpsit  on  an  account  p^^oy 
stated,  and  recover  the  whole  debt,  (.s)  31 

Change  in  firm  may  prevent  it  from  suing. — Although  a  change 
in  a  firm,  whether  by  the  introduction  of  a  new  partner  or  the 
retirement  of  an  old  one,  cannot,  except  as  already  mentioned,  con- 
fer upon  the  partners  any  new  right  of  action  against  strangers,  or 
vice  versa,  as  regards  what  may  have  occurred  before  the  change 
took  place ;  it  may,  nevertheless,  operate  so  as  to  discharge  a  per- 
son from  a  contract  previously  entered  into  by  him.  Thus,  as  was 
pointed  out  in  the  sixth  chapter  of  the  first  book,  (t)  a  person  who 
is  surety  to  a  firm  is  discharged  from  his  suretyship,  for  the  future, 
by  a  change  amongst  its  members,  and  cannot,  therefore,  be  sued 


(s)  Moor  V.  Hill,  Peake  Add.  Cas.  10.  vances  made  and  to  be  made  by  said 

31.  Fresh  contracts. — After  the  sale  commercial  house,  for  the  benefit  of  the 

of  his  interest   by  one    partner   to   the  plantation  of  P.     After  the  execution  of 

other,   subsequent   contracts    for    goods  the  mortgage,  the  commercial  house  of 

bind   the   purchasing  partner  only ;    at  L.  &  C.  was  changed  by  the  addition  of 

least,  such  is  the  rule  in  equity,  though  new  parties,  and  styled  L.,  C.  &  Co.     In 

the  retiring  partner  may  be    liable  at  1862,  P.  executed  three  promissory  notes 

law.    McCarthy  v.  Fitts,  20  N.  Y.  Week,  in  favor  of  the  new  firm  of  L.,  C.  &  Co. 

Dig.  225.  The  holder  of  the  notes  brought  suit  to 

Where  one   member  of    a   dissolved  recover   the   amount,  and   claimed   the 

firm  sues  a  purchaser,  from  the  other,  of  benefit  of  the  mortgage  in  favor  of  the 

partnership     property,    denying     such  old  firm,  executed  in  1857.     Held,  that 

other  partner's  right  to  convey  the  entire  the  addition  of  another  party  in  the  firm 

interest  of  the  firm,  and  suing  for  the  dissolved  the  old  firm,  in  whose  favor 

value  of  his  (the  plaintiflT's)  interest,  the  the  mortgage  was  executed,  and  created 

partner  making  the  sale  is  not  a  neces-  a  new  firm,  in    whose  favor   the  notes 

sary  party.      Hagendobler  v.   Lyon,  12  were  given,  and  the  new  firm  could  not 

Kan.  276.  avail  themselves  of  the  mortgage  given 

A  mortgage  was  executed  by  P.,  in  in  favor  of  the  old  firm.     Abatv.  Penny, 

1857,  for  $8000,  on  real  estate,  in  favor  of  19  La.  Ann.  289. 

L.  &  C,  commission  mercliants,  for  the  (<)  .47i<e  p.  *117. 
purpose  of   securing  and  covering  ad- 

482 


€HAP.  III.,  §  I.]    WHERE   A   CHANGE   HAS   OCCURRED.  287* 

either  by  the  old  or  by  the  new  partners  for  any  default  of  the 
principal  debtor  occurring  subsequently  to  the  change.  Again,  if  a 
person  enters  into  a  contract  with  a  firm,  and  that  contract  is  of  a 
purely  personal  character,  to  be  performed  by  the  individuals  who 
have  entered  into  it,  and  not  by  any  one  else,  a  change  in  the  firm 
may  operate  as  a  dissolution  of  the  contract,  so  that  neither  the  new 
nor  the  old  partners  can  sue  in  respect  of  any  alleged  breach  which 
may  have  occurred  since  the  change  took  place.  An  illustration  of 
this  is  afforded  by  Eobson  v.  Drummond.  (u)  In  that  case  A  and 
B  were  partners  as  coach  makers.  C,  who  knew  nothing  of  B,  en- 
tered into  a  contract  with  A  for  the  hire  of  a  carriage  for  five  years, 
at  so  much  a  year,  and  A  undertook  to  keep  the  carriage  in  proper 
order  for  the  whole  five  years.  Before  the  five  years  were  out,  A 
and  B  dissolved  partnership,  and  A  assigned  the  carriage  and  the 
benefit  of  the  contract  relating  to  it  to  B.  B  gave  C  notice  of  the 
dissolution  and  arrangement  respecting  the  carriage,  but  C  declined 
to  continue  the  contract  with  B,  and  returned  the  carriage.  An 
action  was  then  brought  by  A  and  B  against  C  for  not  performing 
the  contract;  but  it  was  held  that  the  action  would  not  lie,  the 
contract  having  been  with  A  alone,  to  be  performed  by  him 
personally,  and  he  having  disabled  himself  from  continuing  to 
perform  it  on  his  *part.  In  Stevens  v.  Benning  {x)  the 
""  -J  same  principle  was  applied  to  a  contract  between  an 
author  and  a  firm  of  publishers,  and  it  was  held  that  the  con- 
tract was  one  of  a  personal  character,  and  that  consequently  the 
author  was  discharged  fi-om  it  by  a  change  in  the  firm,  and  an 
assignment  of  the  benefit  of  the  contract  to  persons  of  whom  the 
author  knew  nothing.  32 


(w)  2  B.  &  Ad.  303.     Compare  Brit-  into  the  reasons  of  those  decisions,  but 

ish  Wagon  Co.  v.  Lea,  5  Q.  B.  D.  149.  there  may  be  very  good  reasons  for  such 

(x)  1  Kay  &  J.  16S  and  6  De  G.,  M.  a  construction.     It  is  very  probable  that 

&  G.  223.     See,  also,  Hole  v.  Bradbury,  sureties  may  be  induced   to  enter  into 

12  Ch.  D.  886.  such  a  security  by  a  confidence  which 

32.  Change  in  firm  may  prevent  it  they  repose  in  the  integrity,  diligence, 

from   suing. — In  Weston  v.  Barton  (4  caution  and  accuracy  of  one  or  two  of 

Taunt.  673,  682)   Sir  James  Mansfield,  the  partners.     In  the  nature  of  things 

in  delivering  the  opinion  of  the  court,  there  cannot  be  a  partnership  consisting 

6aid:  "It  is  not  necessary  now  to  enter  of  several  persons,  in  which  there  are  not 

483 


288*  ACTIONS    BY    AND    AGAINST    PARTNERS         [bOOK    II., 

Effect  of  death. — Secondly,  with  respect  to  clianges  caused  by 
death.  Before  the  Judicature  acts,  when  a  partner  died  in  the  life- 
time of  any  one  or  more  of  his  copartners,  all  actions  brought  in 
respect  of  any  contract  entered  into  by  or  on  behalf  of  the  firm 
before  his  death  must  have  been  brought  by  or  against  the  surviv- 
ing members  of  the  firm,  and  by  or  against  them  alone ;  for  the 
representatives  of  the  deceased  partner  could  neither  sue  nor  be  sued 
at  law  in  respect  of  any  such  contract,  {y)     So,  an  action  for  the 

some  persons  possessing  these  qualities  The  defendant's  obligation  is  to  pay  all 
in  a  greater  degree  than  the  rest,  and  it  srims  due  to  them  on  account  of  their  ad- 
may  be  that  the  partner  dying,  or  going  vances  to  Blyth.  Now,  who  are  'them*^ 
out,  m-ay  be  the  very  person  on  whom  but  the  i)ersons  before  named,  amongst 
the  sureties  relied.  It  would,  therefore,  whom  is  James  Walwyn,  who  then  con- 
be  very  unreasonable  to  hold  the  surety  slitnted  the  banking-house,  and  with 
to  his  contract  after  such  change ;  and  whom  the  defendant  contracted.  The 
though  the  sum  here  is  limited,  that  words  will  admit  of  no  other  meaning, 
circumstance  does  not  alter  the  case,  And,  indeed,  with  respect  to  any  intent 
for  although  the  amount  of  the  indem-  which  parties  entering  into  contracts  of 
nity  is  not  indefinite,  yet  £3000  is  a  this  nature  may  be  supposed  to  have,  it 
large  sum ;  and  even  if  it  were  only  may  make  a  very  material  diflFerence  in 
£1000,  the  same  ground  in  a  degree  the  view  of  the  obligor,  as  to  the  persons 
holds,  for  there  may  be  a  great  deal  of  constituting  the  house  at  the  time  of 
difference  in  the  measure  of  caution  entering  into  the  obligation,  and  by 
or  discretion  with  which  different  per-  whom  the  advances  are  to  be  made  to 
sons  would  advance  even  £1000.  Some  the  party  for  whom  he  is  surety.  For 
would  permit  one  who  was  almost  a  a  man  may  very  well  agree  to  make 
beggar  to  extend  his  credit  to  that  sum  ;  good  such  advances,  knowing  that  one 
others  would  exercise  a  due  degree  of  of  the  partners,  on  whose  prudence  he 
caution  for  the  safety  of  the  surety,  relies,  will  not  agree  to  advance  money 
And  therefore  we  are  of  opinion  that  improvidently.  The  characters,  there- 
as  to  such  sums  only  which  were  ad-  fore,  of  tlie  several  partners  may  form 
vanced  before  the  decease  of  Golding,  a  material  ingredient  in  the  judgment 
can  an  indemnity  be  recovered  by  the  of  the  obligor  upon  entering  into  such 
plaintiffs ;   and  as  to  the  sums  claimed    an  engagement." 

for  debts  incurred  since  his  decease,  (y)  Dixon  v.  Hammond,  2  B.  &  A. 
the  judgment  must  be  for  the  defend-  310,  which  shows  that  an  agent  of  the 
ant."  firm  must  account  to  the  surviving  part- 

In  Strange  v.  Lee  (3  East  484,  490)  ners.  See,  too,  Martin  v.  Cromps,  1  Ld. 
Lord  Ellenborough  said  :  "  The  court  Raym.  340,  and  2  Salk.  444 ;  and  Web- 
will  no  doubt  construe  the  words  of  ber  v.  Tyvill,  2  Wms.  Saund.  121,  e. 
the  obligation  according  to  the  intent  Formerly,  this  was  otherwise— see  the 
of  the  parties  to  be  collected  from  them,  authorities  collected  in  Buckley  v.  Bar- 
but  the  question  is  what  that  intent  was.    ber,  6  Ex.  178. 

484 


CHAP.  III.,  §  I.]    WHERE    A   CHANGE    HAS    OCCURRED.  288* 

conversion  of  partnership  goods  must  have  been  brought  by  the 
surviving  partners,  {z)  33 

Actions  by  and  agaimt  mvvlving  partners. — It  followed  from  the 

{z)  Kemp  V.  Andrews,  Carth.  170 ;  but  law  for  the  debt.  Ramsom  v.  Pomeroy, 
see  Buckley  v.  Barber,  6  Ex.  164.  An  5  Blackf.  (Ind.)  383. 
indictment  for  stealing  them  may  be  When  suit  is  brought  on  a  note  in  the 
preferred  by  the  surviving  partners  and  names  of  three  members  of  a  dissolved 
the  next  of  kin  of  the  deceased  partner,  firm,  and  is  excepted  to  on  the  ground 
K.  V.  Gaby,  Euss.  &  R.  178 ;  R.  v.  Scott,  that  one  is  dead,  plaintiffs  may  amend 
Id.  13.  by  striking  out  his  name,  on  proof  that 

33.  Effect  of  death. — In  equity,  part-  his  interest  had  been  fully  transferred 
nership  debts  are  considered  joint  and  to  one  of  the  others.  Miller  v.  Cappel 
several,  and  the  joint  creditors  have  the  (La.),  2  So.  Rep.  807. 
right  to  proceed  against  the  estate  of  a  de-  No  joint  action  can  be  maintained 
ceased  partner,  if  the  surviving  partners  against  the  several  administrators  of  de- 
are  insolvent  and  there  is  no  joint  fund  ceased  partners,  for  the  debt  is  severed 
to  which  they  may  resort.  Emanuel  v.  by  the  death  of  either,  and  the  remedy 
Bird,  19  Ala.  596.  must  be  against  their  estates  severally. 

A  court  of  equity  had  original  juris-  McNally  v.  Kerswell,  37  Me.  550. 
diction  tu  enforce  the  payment  of  a  part-  Under  Mass.  Gen.  Stat.,  c.  97,  |  28,  a 
nership  debt  out  of  the  estate  of  a  de-  suit  on  a  partnership  debt  may  be  main- 
ceased  partner,  and  that  jurisdiction  is  tained  and  a  verdict  rendered  against 
not  taken  away  by  any  provision  of  the  executor  of  a  deceased  partner,  not- 
the  code.  Waldron  v.  Simmons,  28  Ala.  withstanding  the  insolvency  of  such  part- 
^29.  ner's  estate.    Sampson  ?;.  Shaw,  101  Mass. 

A  debt  against  a  partnership  is  several    135. 
as  well  as  joint,  and  the  separate  estate        To  bind  a  defendant  as  an  heir  hold- 
of  a  deceased  partner  is  liable  for  a  part-    ing  a  partnership  interest  in  trust,  it  is 
nership  debt.     M'Lain  v.  Car?on,  4  Ark.    not  sufficient  to  challenge  in  a  general 
164.  way  the  partnership  character  of  the  in- 

A  surviving  copartner  can  alone  be  terest.  Jenness  v.  Smith,  58  Mich.  280. 
sued  for  a  partnership  debt,  and  the  rep-  The  looking  to  a  surviving  partner  for 
resentatives  of  the  deceased  partner  can-  payment,  and  the  acceptance  of  interest 
not.  Roosvelt  v.  McDowell,  1  Ga.  489.  from  him  by  a  creditor  of  the  firm,  raises 
While,  pending  a  suit  by  a  third  per-  no  presumption  of  an  agreement  to  re- 
son,  against  partners  for  an  account,  one  lease  the  estate  of  the  deceased  partner 
of  them  dies,  his  personal  representa-  from  its  secondary  liability.  Fogarty  v. 
lives  must  be  made  parties,  in  the  ab-  Cullen,49N.  Y. Super.  Ct.  397  ;  Hamers- 
sence  of  evidence  that  there  are  no  firm  ley  v.  Lambert,  2  Johns.  (N.  Y.)  Ch.  508. 
assets  sufficient  to  pay  the  debts  of  the  To  a  bill  against  a  partnership  after 
firm.     Pearce  v.  Bruce,  38  Ga.  444.  the  death  of  a  part  of  the  members,  the 

If  two  partners  be  indebted  for  goods    representatives  of  such  as  have  deceased 
sold  and  delivered,  and  one  die  in  the    ought  to  be  parties.     Carter  v.  Currie,  5 
lifetime  of  the  other,  the  administrator    Call  (Va.)  158. 
of  the  deceased  partner  may  be  sued  at 

485 


288^ 


ACrriONS  BY  AND   AGAINST   PARTNERS         [bOOK   II., 


above  rule  that  the  last  surviving  partner,  or,  if  he  was  dead,  hi& 
legal  personal  representative,  was  the  prop(!r  person  to  sue  and  be 
s.ued  at  law  in  respect  of  the  debts  and  engagements  of  the  firm,  (a) 
These  rules,  however,  can  be  no  longer  relied  upon,  except  where 
the  obligation  sought  to  be  enforced  is  joint  in  equity  as  well  as  at 
law.  Wherever  it  is  several  as  well  as  joint,  (6)  an  action  may,  it 
is  appreliended,  be  brought  by  or  against  the  surviving  partners  and 
the  executors  or  administrators  of  the  deceased  partner,  (c)  34 


(a)  Kichards  v.  Heather,  1  B.  &  A. 
29 ;  Calder  v.  Rutherford,  3  Brod.  &  B. 
302. 

(b)  As  to  which,  see  ante  p.  *194. 

(c)  Ord.  XVI.,  rr.  1,  4,  6,  8. 

34.  Actions    by    and    against    sur- 


Church,  1  Watts  &  S.  (Pa.)  240;  Ber- 
nard V  Wilcox,  2  Johns.  (N.  Y.)  Cas. 
374;  Walker f.Galbrath,3  Head  (Tenn.) 
315. 

The  surviving  partners  are  the  proper 
parties  in  actions  upon  firm  claims;  the 


viving  partners— rights  of  surviving  executor  of  a  deceased  partner  should 
partner  generally. — The  sole  surviving  not  be  allowed  to  intervene  without 
partner  is,  in  law,  the  owner  of  all  the  some  sufficient  reason.  Watson  v.  Mil- 
partnership  effects;  and  the  partnership  ler,  55  Tex.  289. 

funds   in  the  hands  of  garnishees  may  Where  the  surviving  partner  files  a 

be   ordered    to   be    paid   over   to   sepa-  bill    in   equity,    it   is   not   necessary  to 

rate  creditors  of  the  surviving  partner,  make   the    representatives   of    the    de- 

on   their  giving  bond   and   security  to  ceased  partner  parlies.     They  have  no 

answer  any  claim  which  may  afterwards  claim    until    the  partnership  debts  are 

be  made  on  the  funds.     Knox  v.  Schep-  paid,  and  even  then  their  claim  is  upon 

ler,  2  Hill  (S.  C.)  595.  the  surviving  partner  or  his  representa- 

Payment,  to  an  executor  or  adminis-  tives.     Pagan  v.  Sparks,  2  Wash.   (U. 

trator  of  a  deceased  partner,  of  a  part-  S.)  325. 

nership  claim,  is  no  defence  to  an  action  If  a  partnership,  upon  its  dissolution, 

by  the  survivor.     Wallace  v.   Fitzsim-  convey  all  its  effects  to  one  of  the  firm, 

mons,  1  Dall.  (U.  S  )  248  ;  Rice  v.  Rich-  and,  after  such  dissolution  and  transfer, 


ards.  1  Bush.  (N.  C.)  Eq.  277. 


a  debtor  of  the  firm  promise  to  pay  the 


When  the  surviving  partner  may  individual  partner,  he  may  maintain  an 
sue  alone. — A  surviving  partner  is  the  action  in  his  own  name  on  the  promise, 
sole  representative  of  the  partnership  Howell  v.  Reynolds,  12  Ala.  128. 
property,  and  the  representatives  of  the  Where  a  partner  dies,  the  survivor 
deceased  partner  need  not  be  made  par-  may  carry  on  suits  for  recovering  part- 
ties  to  a  proceeding  at  law  or  in  equity  nership  debts,  without  joining  the  per- 
affecting  such  property.  Robinson  v.  sonal  representative  of  the  deceased 
Thompson,  1  Smed.  &  M.  (Miss.)  Ch.  partner;  and  where  the  survivor,  dur- 
454.  ing  the  progress  of  a  suit,  becomes  bank- 

Upon    the   death    of    a   partner,    the  rupt,  he  may  still  carry  on  the  suit  in 

right  of  action  on  a  partnership  claim  his  own   name,   particularly   where  he 

survives    to    the    survivor.      Davis    v.  had  conveyed,  during  his  lifetime,  all  his 

486 


CHAP.  III.,  §  I.]    WHERE    A    CHANGE    HAS    OCCURRED.  288* 

Efed  of  bankruptcy. — Lastly,  with  respect  to  changes  caused  by 
bankruptcy.     *Formerly,  if  a  partner  was  bankrupt,  his   r^^^^^gq 
assignees  were  required  to  join  in  his  stead  in  any  action  in 

interest  in  tlie  demand  in  action  to  the    Teller  v.  Welherell,  9  Mich.  464. 
deceased  partner,  for  in  such  case  no  in-        Where  a  debtor  of  a   copartnership 
terest  in  the  demand   passed   to  his  as-    stated  an  account  between  them  admit- 
signee.     McCandless  v.    Hadden,    9    B.    ting   a   balance   due   from    himself   for 
Mon.  (Ky.)  186.  goods  sold  in. the    lifetime   of  the  dc- 

The  liquidating  partner  of  a  commer-  ceased  partner— iJeW,  that  the  surviv- 
cial  firm  may  sue  in  his  own  name,  by  ors  might  recover  such  balance  on 
representing  the  claim  sued  on  as  an  insimul  computassent,  without  stating 
arising  out  of  the  business  of  the  late  the  death  of  the  other  partner  and  the 
firm,  so  as  not  to  deprive  the  defendant  survivorship ;  the  stating  of  an  account 
of  any  means  of  defence  to  which  he  being  in  the  nature  of  a  new  promise  to 
would  be  entitled  in  a  suit  in  the  name  the  survivors.  Holmes  v.  De  Camp,  1 
of  all  the  partners.  White  v.  Jones,  14  Johns.  (N.  Y.)  34. 
La.  Ann.  681.  A  surviving  dormant    partner    may 

Where  a  debt  was  originally  due  to  sue  alone  upon  a  debt  due  the  part- 
two  partners,  and  one  has  deceased,  and  nership.  Beach  v.  Hayward,  10  Ohio 
the  debtor  has  done  nothing  to  change    455. 

his  original  liability,  the  action  on  the  A  surviving  partner,  suing  to  recover 
debt  must  be  brought  in  the  name  of  a  partnership  claim,  may  join  his  indi- 
the  surviving  partner,  although,  by  an  vidua!  claim  in  the  same  action.  Davis 
agreement  between  the  parties,  the  bene-  v.  Church,  1  Watts  &  S.  (Pa.)  240. 
ficial  interest  was  in  the  deceased.  When  the  representative  of  the 
Clark  V.  Howe,  23  Me.  560.  deceased   partner  may  be  joined  as 

An  action  at  law  may  be  maintained  co-plaintiff.— If  land  is  purchased  by 
in  the  name  of  two  surviving  partners  partners  with  partnership  funds,  for 
for  the  benefit  of  one  of  them,  on  an  ac-  partnership  purposes,  and  is  not  needed 
count  assigned  from  the  partnership  for  the  payment  of  debts,  the  title  vests 
during  the  lifetime  of  all  the  partners  to  in  the  members  of  the  firm  as  tenants  in 
such  one.  The  provisions  of  Rev.  Stat.,  common  ;  and,  after  the  death  of  one  of 
ch.  69,  relating  to  the  settlement  of  the  them,  a  petition  for  damages  sustained 
estate  of  deceased  partners,  have  no  ap-  by  reason  of  the  location  of  a  railroad 
plication  to  such  case.  Matherson  v.  upon  it,  is  properly  brougiit  in  the  joint 
Wilkinson  (Me.),  8  Atl.  Rep.  684.  names  of  his  administrator  and  the  sur- 

After  the  death  of  one  partner,  a  suit  viving  partner.  Whitman  v.  Boston, 
upon  a  bond  to  the  partnership,  brought  &c..  Railroad,  3  Allen  (Mass.)  133. 
by  the  survivor,  joining  the  name  of  the  The  death  of  a  partner,  co-plaintiff"  in 
deceased  as  if  he  were  still  alive,  cannot  the  court  below  and  co-appellant  in  the 
be  supported,  and  the  erroneous  joinder  Supreme  Court,  being  suggested,  the 
cured  by  proof,  that  at  the  time  of  suit  case  may  proceed  to  final  judgment  in 
brought,  another  person,  of  the  same  the  name  of  the  surviving  partner;  if, 
name  with  the  deceased  partner,  was  however,  either  the  surviving  partner 
living ;  for  this  does  not  prove  identity,    or  the  appellee  moves  for  a  sci.  fa.  to 

487 


289^ 


ACTIONS    BY    AND    AGAINST    PARTNERS         [bOOK    II., 


which.,  had  no  baiikniptoy  intervened,  the  bankrupt  himself  would 
have  been  necessarily  joined  as  a  plaintiff.  (//)     If  the  assignees  de- 


make  the  representative  of  the  dece- 
dent's estate  a  party,  it  will  be  awarded. 
Gunter  v,  Jarvis,  25  Tex.  581. 

When  surviving  partner  should  be 
sued  alone. — Where  the  surviving 
partner  of  a  firm  which  is  insolvent 
assigns  certain  real  estate  of  the  firm  for 
the  benefit  of  its  creditors,  the  heirs  of 
the  deceased  partner  are  not  proper  par- 
ties to  a  suit  involving  title  to  such  real 
estate,  there  being  no  relation  of  trust 
or  confidence  between  them  and  the 
assignee.  Kothwell  v.  Dewees,  2  Black 
(U.  S.)  613. 

A  creditor  of  a  firm  may  maintain  a 
suit  against  a  surviving  partner  without 
making  the  representatives  of  a  deceased 
partner  parlies.  Southard  v.  Lewis,  4 
Dana  (Ky.)  148. 

All  partnership  property  and  respon- 
sibilities on  the  death  of  one  partner 
survive  to  his  copartners,  and  it  is  not 
necessary  to  make  his  personal  repre- 
sentative a  party  to  a  bill,  in  relation 
to  such  matters,  against  the  firm.  Jones 
V.  Hardesty,  10  Gill  &  -J.  (Md.)  404. 

Where  it  is  sought  to  subject  firm 
assets  in  the  hands  of  the  surviving  part- 
ner, the  representative  of  the  deceased 
partner  is  not  a  necessary  party,  if  the 
object  IS  merely  to  reach  the  property 
of  the  firm.  Otherwise  if  the  suit  be 
brought  to  subject  the  individual  prop- 
erty of  the  partners.  Eobertshaw  v. 
Han  way,  52  Miss.  713. 

The  joinder  of  the  surviving  partners 
and  the  administrator  of  a  deceased 
partner  as  defendants  in  an  action 
brought  on  a  firm  obligation  is  error. 
Childs  V.  Hyde,  10  Iowa  294;  Black  v. 


Struthers,  11  Id.  459. 

A  joint  action  cannot  be  brought  at 
law  on  a  partnership  note  against  the 
administrator  of  a  deceased  member 
thereof  and  the  survivors.  Maples  v. 
Geller,  1  Nev.  233. 

The  representative  of  a  partner  can- 
not be  sued  while  there  is  a  surviving 
partner.  Burgwin  v.  Hastier,  1  Tayl. 
(N.  C.)  124. 

When  representative  of  deceased 
partner  may  be  joined  as  defendant  — ■ 
Since  the  abolition  of  the  distinctions 
between  suits  at  law  and  in  equity,  by 
the  South  Carolina  Code,  the  surviving 
partner  and  the  representative  of  the 
deceased  partner  may  be  joined  in  one 
action.  Wiesenfeld  v.  Byrd,  17  So.  Car. 
106. 

Creditors  may  obtain  judgment  against 
the  survivor  and  the  representative  of 
the  deceased  partner  jointly  ;  or,  at  their 
election,  against  either  separately,  and 
proceed  to  enforce  satisfaction  against 
either.  Of  this  neither  the  representa- 
tive of  the  deceased  partner  nor  the 
survivor  can  complain,  but  tliey  have 
their  remedy  over  against  each  other. 
Saunders  v.  Wilder,  2  Head  (Tenn.)  577. 

When  representative  of  deceased 
partner  may  be  sued  alone. — The 
creditor  of  a  partnership  maj',  at  his 
option,  proceed  at  law  against  the  sur- 
viving partner,  or  go  in  the  first  instance 
in  equity  against  the  representatives  of 
the  deceased  partner.  It  is  not  necessary 
for  him  to  exhaust  his  remedy  at  law  in 
the  first  instance.  Story  on  Partn.,  §  362, 
n.  3.  Nelson  v.  Hill,  5  How.  (N.  Y.) 
127. 


(d)  Eckhardt  v.  Wilson,  8  T.  R.  140 ;    ham  v.  Robertson,  2  T.  R.  282. 
Thomason  v.  Frere,  10  East  418 ;  Gra- 

488 


CHAP.  III.,  §  I.]    WHERE   A   CHANGE   HAS  OCCURRED.  289* 

clined  to  join,  the  solvent  partners  were  entitled  to  make  use  of 
their   names    upon    indemnifying   them  against   the  costs   of  the 

Where  a  surviving  partner  is  in-  payment  of  the  joint  debts,  and  that  the 
solvent,  it  is  not  necessary  to  obtain  a  joint  estate  vesting  in  the  surviving 
judgment  against  him  before  proceeding  partner,  the  joint  creditor,  upon  equit- 
against  the  equitable  assets  of  a  deceased  able  considerations,  ought  to  resort  to 
partner's  estate.  Vance  v.  Cowing,  13  the  surviving  partner  before  he  seeks 
Ind.  460.  satisfaction  from  the   assets  of  the  de- 

Judgments  for  firm  debts  may  be  re-  ceased  partner.  It  is  admitted  that  if 
covered  either  against  the  surviving  the  surviving  partner  prove  to  be  un- 
partner  alone,  or  against  the  personal  able  to  pay  the  whole  debt,  the  joint 
representatives  of  those  deceased.  Pos-  creditor  may  then  obtain  full  satisfaction 
tlewait  V.  Howes,  3  Iowa  365.  from  the  assets  of  the  deceased  partner. 

Where  a  suit  is  brought  by  a  surviv-  The  real  question,  then,  is  whether  the 
ing  partner,  as  such,  if  he  fails,  the  estate  joint  creditor  shall  be  compelled  to 
of  the  deceased  partner  is  liable  to  con-  pursue  the  surviving  partner  in  the  first 
tribute  to  the  costs.  Allen  ?;.  Blanchard,  instance,  and  shall  not  be  permitted  to 
9  Cow.  (N.  Y.)  631.  resort  to  the  assets  of  the  deceased  part- 

A  partnership  debt  is  recoverable  ner  until  it  is  established  that  full  satis- 
against  the  executors  of  a  deceased  part-  faction  cannot  be  obtained  from  the  sur- 
ner,  even  pending  a  suit  against  the  sur-  viving  partner,  or,  whether  the  joint 
vivors.  Creswell  v.  Blank,  3  Grant  (Pa.)  creditor  may,  in  the  first  instance,  resort 
Cas.  320.  See  Moore's  Appeal,  34  Pa.  to  the  assets  of  the  deceased  partner, 
St.  411.  leaving  it  to  the  personal  representatives 

Equity  will  not  lend  its  aid  to  reach  of  the  deceased  partner  \o  take  proper 
assets  in  the  hands  of  executors  when  a  measures  for  recovering  what,  if  any- 
complete,  adequate  and  eSectual  remedy  thing,  shall  appear  upon  the  partnership 
exists  at  law  against  surviving  solvent  accounts  to  be  due  from  the  surviving 
partners.  Van  Reimsdyk  v.  Kane,  1  partner  to  the  estate  of  the  deceased 
Oall.  (U.  S.)  371,  630.  partner.     Considering  that  the  estate  of 

A  bill  to  charge  the  executors  of  a  the  surviving  partner  is  at  all  events  lia- 
deceased  partner  with  a  partnership  ble  to  the  full  satisfaction  of  the  credi- 
debt,  where  the  other  partner  survives,  tors,  and  must,  first  or  last,  be  answerable 
must  expressly  charge  an  insolvency  for  the  failure  of  the  surviving  partner, 
of  the  survivor.  West  v.  Randall,  2  that  no  additional  charge  is  thrown  upon 
Mason  (U.  S.)  181.  the  assets  of  tjie  deceased  partner  by  the 

In  Wilkinson  v.  Henderson  (1  Myl.  &  resort  to  them  in  the  first  instance,  and 
K.  582,  588)  Sir  John  Leach,  Master  of  that  great  inconvenience  and  expense 
the  Rolls,  said :  "  All  the  authorities  might  otherwise  be  occasioned  to  the 
establish  that  in  the  consideration  of  a  joint  creditors  ;  and  further,  that  accord- 
court  of  equity,  a  partnership  debt  is  ing  to  the  two  decisions  in  Sleech's  Case, 
several  as  well  as  joint.  The  doubts  in  the  cause  of  Devaynes  v.  Noble,  the 
upon  the  present  question  seem  to  have  creditor  was  permitted  to  charge  the 
arisen  from  the  general  principle  that  separate  estate  of  the  deceased  partner, 
the  joint  estate  is  the  first  fund  for  the    which,    in    equity,   was    not   primarily 

489 


289^ 


ACTIONS    BY   AND    AGAINST    PARTNERS         [bOOK    II.^ 


action,  (e)     If  all  the  partners  Avere  bankrupt,  any  action  which  it 
would  have  been  necessary  to  bring  in  the  names  of  all  the  partners, 


liable,  as  between  tbe  partners,  without 
first  having  resort  to  dividends,  which 
might  be  obtained  by  proof  under  tiie 
commission  against  the  surviving  part- 
ner—  I  am  of  opinion  that  the  plaintiff 
is  entitled,  in  tliis  case,  to  a  decree  for 
the  benefit  of  himself,  and  all  other  joint 
creditors,  for  the  payment  of  his  debt  out 
of  the  assets  of  Shepherd,  the  deceased 
partner." 

Objections  for  misjoinder — how 
made  or  waived. — At  the  common  law 
tlie  surviving  partner  alone  has  the 
right  to  sue  for  and  recover  debts  due 
and  owing  the  firm ;  an  administrator 
cannot  join.  But  it  is  too  late  to  take 
objection  to  such  misjoinder  in  a  suit 
upon  a  judgment  rendered  in  an  action 
in  which  the  misjoinder  occurred.  Bel- 
ton  V.  Fisher,  44  111.  33. 

The  joinder  of  a  cause  of  action  against 
a  surviving  partner,  with  one  against  the 
administrator  of  the  deceased  partner 
for  the  same  debt,  must  be  objected  to 
by  demurrer ;  the  objection  is  waived 
by  an  answer.  Wrigiit  v.  Storrs,  6 
Bosw.  (N.  Y.)  600. 

Rules  of  pleading  in  actions  by 
surviving  partners. — A  defective  or  in- 
distinct allegation  of  the  surviving  part- 
ner's rigiit  to  sue  in  his  own  name  may 
sometimes  be  supplied  by  the  proofs. 
Milne  v.  Douglass,  17  Fed.  Rep.  482. 

In  an  action  by  a  surviving  partner 
to  recover  a  debt  due  the  partnership,  it 
is  sufficient,  after  verdict,  that  he  sets 
out  the  character  in  which  he  sues  at 
the  commencement  of  the  declaration. 
Hill  V.  M'Neil,  6  Port.  (Ala.)  29. 

In  an  action  by  a  surviving  partner  on 
a  note  made  to  him  in  the  firm  name 


after  the  death  of  his  copartner,  the 
plaintiff  need  not  negative  payment  to 
the  deceased  partner.  Bonne  v.  Kay,  5 
Ark.  19. 

Where  the  plaintiff  declares,  as  sur- 
viving partner  of  E.  Y.  B.,  on  a  note 
payable  to  "  E.  Y.  B.  &  Co.,"  he  must 
directly  aver  the  identity  of  the  payees 
with  the  plaintiff  and  his  deceased  part- 
ner, and  cannot  recover  without  such 
averment.     Keith  v.  Pratt,  5  Ark.  661. 

The  survivor  of  several  persons  having 
a  joint  interest  may  sue  in  an  action  on 
simple  contract  without  describing  him- 
self as  survivor.  In  such  case,  however^ 
the  cause  of  action  must  be  correctly  set 
forth,  that  the  defendant  may  know 
what  he  is  called  to  answer.  Vanden- 
heuvil  V.  Storrs,  3  Conn.  203. 

A  complaint  by  surviving  partners  of 
a  firm  is  bad,  if  it  fail  to  state  wlio  con- 
stituted the  firm,  and  how  plaintiffs  be- 
came survivors.  Hubbell  v.  Skiles,  16 
Ind.  138.  But  see  Ledden  v.  Colby,  14 
N.  H.  33. 

In  an  action  by  a  surviving  partner, 
as  such,  to  recover  money  paid  for  the 
defendant  after  the  death  of  the  other 
partner,  the  plaintiff  must  prove  that 
the  money  was  paid  in  behalf  of  the 
partnership.  Stevens  v.  Rollins,  34  Me. 
226. 

Where  the  plaintiff  was  described  in 
the  declaration  as  the  surviving  partner 
of  the  late  firm  of  Joslyn  &  Norris,  with- 
out an  averment  that  there  were  no 
other  partners,  it  was  held  sufficient. 
Joslyn  V.  Taylor,  24  N.  H.  (4  Fost.) 
268. 

In  an  action  brought  by  A  as  surviv- 
ing partner  of  A  &  Co.,  upon   a  note 


(e)  Whitehead  v.  Hughes,  2  Cromp.  &  M.  318. 

490 


CHAP.  Ill,,  §  I.]    WHERE    A    CHAXGE    HAS    OCCURRED. 


289^ 


if  bankruptcy  had  not  intervened,  must  have  been  brought  by  their 
assignees.  (/)  But  this  was  subject  to  the  qualification  that  bank- 
rupts, whether  partners  or  not,  might  sue  in  their  own  names  as 
trustees  for  other  people.  (</)  By  the  Bankruptcy  act,  1883,  a  bank- 
rupt partner  is  not  required  to  join  the  solvent  partners  in  suing  on 
a  joint  contract  made  with  the  firm ;  (h)  and  it  presumed  that  the 
trustee  of  the  bankrupt  partner  need  not  be  joined  in  such  a  case. 
But  the  trustee  may  join  in  the  action  if  authorized  to  do  so  by  the 
Bankruptcy  Court ;(i)  and  his  joinder  is  necessary  where  an  act  of 
the  bankrupt  is  sought  to  be  impeached.  {k)^o 


given  to  A  since  the  death  of  his  part- 
ners, the  words  describing  him  as  sur- 
viving partner,  &c.,  may  be  rejected  as 
surplusage.  Keonedy  v.  Richey,  1 
Strobh.  (S.  C.)  4. 

Rules  of  pleading,  and  evidence  in 


B.  66;  Winch  v.  Keeley,  1  T.  R.  619. 

(h)  See  46  and  47  Vict.,  c.  52,  §  114. 

(i)  Id.,§  113. 

(k)  See  Heilbut  i.  Xevill,  L.  R.,  5  C. 
P.  478. 

35.  Effect  of  bankruptcy.— The  cred- 


actions  against  surviving  partners. —  iters  of  a  bankrupt  partnership  cannot 

In  assumpsit  against  a  surviving  partner,  be  allowed,  if  there  is  any  joint   fund,, 

it  is  not  necessary  to  notice  the  deceased  however  small,  to  prove  claims  against 

partner  in  the  declaration  ;  but  if  this  is  the  separate  estate  of  one  of  the  partners ; 

done,  the   rules   of  pleading  require  a  and  the  court  cannot  (under  the  act  of 

negation  in  the  breach  of  payment  by  1841)  inquire  how  the  joint  fund    has 

the    deceased    partner.      Culbertson    v.  been    produced.      Matter  of    Marwick, 

Townsend,  6  Ind.  64.  Daveis  (U.  S.)  229 ;  S.  C ,  3  N.  Y.  Leg. 

In    declaring    against    the   surviving  Obs.  286 ;  8  Law  Rep.  169. 
partner  of  a  firm,  on  a  note  endorsed  by  Where  a  surviving  partner,  who  has 
the  firm,  it  is  not  necessary  to  aver  him  purchased  the  deceased  partner's  inter- 
to  be  surviving  partner.    Raborg  v.  Bank  est  in  their  stock  of  goods,  of  his  admin- 
of  Columbia,  1  Harr.  &  G.  (Md.)  231.  istrator,  makes   an   assignment  for  the 

Where  a  bill  is  brought  against  part-  benefit  of  his  creditors,  the  partnership 
ners,  and  one  of  them  dies,  no  revivor  creditors  will  have,  as  against  the  firm 
against  his  representatives  is  necessary,  assets,  an  equity  superior  to  the  separate 
but  the  bill  may  proceed  against  the  creditors  of  the  grantor,  if  the  trustees 
survivors;  and,  if  it  be  dismissed  for  under  the  assignment  knew  that  part- 
want  of  such  revival,  it  is  error.  Ham-  nership  assets  were  included  in  the  deed, 
mond  V.  St.  John,  4  Yerg.  (Tenn.)  107.  Wilson  v.  Soper,  13  B.  Mon.  (Ky.)  411. 

(/)  See   Ray  v.  Davis,  8  Taunt.  134.  Where  a  special  partnership  becomes 

The  trustee  of  a  firm  may  sue  for  debts  insolvent,  and  the  members  neglect  to 

owing  to  the  members  thereof  Individ-  place   their   assets    in    the  hands   of    a 

ually.     Stonehouse  v.  De  Silva,  3  Camp,  proper  and   responsible   trustee,   to   be 

399;  Hancock  z).  Hay  wood,  3  T.  R.  433  ;  distributed  among  all  the  creditors  of 

Scott  V.  Franklin,  15  East  428.  the  firm  ratably,  a  creditor  of  the  firm 

(g)  See  Castelli  v.  Boddington,  1  El.  &  may  maintain  a  bill  to  enjoin  them  from 

491 


289^ 


ACTIONS    BY    AND    AGAINST    PARTNERS.       [bOOK    II., 


Actions  agalnd  banknipt. — ^Vt?  regards  actions  against  a  firm,  one 
or  more  of"  the  members  of  which  have  become  bankrupt,  it  need 
hardly  be  observed  that  there  is  no  remedy  by  action  against  trus- 
tees in  respect  of  liabilities  of  the  bankrupt  they  represent.  The 
only  remedy  is  by  proof  against  his  estate  or  by  proof  and  by  an 
action  against  him  if  he  has  not  obtained  his  order  of  discharge,  or 
if  his  order  of  discharge  is  no  bar.  AVhen,  therefore,  it  is  desired 
to  recover  a  debt  due  from  a  firm,  and  all  the  partners  are  bank- 
rupt, an  action  is  not  the  remedy  unless  the  partners  have  not  ob- 
tained their  discharge,  or  unless  the  debt  could  not  have  been  proved 
in  bankruptcy.  If,  however,  some  only  of  *the  partners 
^  are  bankrupt,  the  solvent  partners  only  need  be  sued,  (I) 
and  the  Court  of  Bankruptcy  can  restrain  an  action  against  the 
bankrupt  partner,  (m)  36 


making  an  inequitable  distribution  of 
their  assets,  and  for  a  receiver.  White- 
wright  V.  Stimpson,  2  Barb.  (N.  Y.)  879. 

(/)  46  and  47  Vict.,  c.  52,  |  114. 
Hawiiins  v.  Ramsbottom,  6  Taunt.  178. 

(m)  46  and  47  Vict.,  c.  52,  |  10  (2). 
See  Ex  parte  Mills,  6  Ch.  594. 

36.  Actions  against  bankrupt. — 
Where  one  of  two  partners,  pending  an 
action  against  them,  is  adjudged  a  bank- 
rupt, and  the  action  is  consequently 
stayed  as  to  him,  until  the  determina- 
tion of  the  question  of  his  discharge, 
the  action  may  proceed  as  to  the  other 
defendant.  Hogendobler  v.  Lyon,  12 
Kan.  276. 

Mr.  Gow  has  stated  the  general  doc- 
trine., as  follows  :  "  We  have  seen,"  says 
he,  "in  a  former  part  of  this  work,  that 
an  act  of  bankruptcy  committed  by  one 
partner,  when  followed  by  a  commission, 
dissolves  the  partnership  by  relation  to 
the  time  when  the  act  of  bankruptcy 
was  committed.  The  partner,  therefore, 
who  has  committed  the  act  of  bank- 
ruptcy cannot  afterwards  communicate 
to  strangers  any  rights,  either  against 
the  firm  or  the  joint  property,  because 


the  commission  and  assignment  retro- 
spectively deprive  him  of  all  capacity 
of  acting.  They  determine  his  power 
to  bind  the  firm  by  relation  to  the  date 
of  his  bankruptcy  ;  and  all  his  rights 
from  that  time  passing  to  his  assignees, 
he  ceases  to  have  any  further  control 
over  the  partnership  or  the  joint  prop- 
erty. And  the  statutes  concerning  bank- 
rupts make  an  entire,  not  a  partial, 
avoidance  of  the  bankrupt's  acts,  as  well 
in  respect  of  his  partner's  moiety  as  his 
own.  Therefore,  where  a  partner,  on 
the  eve  of  his  bankruptcy,  voluntarily 
deposited  goods  with  a  third  person  for 
a  creditor  of  the  firm,  and  the  deposit 
falsely  purported  to  be  founded  upon  a 
supposed  sale,  the  creditor,  after  the 
bankruptcy  of  the  partner,  having  re- 
ceived information  of  the  deposit,  de- 
clared his  acceptance  of  it ;  and  in  an 
action  of  trover  by  the  assignees  under  a 
joint  commission  to  recover  the  goods  it 
was  held  that  the  creditor  could  not 
resist  their  claim,  inasmuch  as  the  de- 
posit was  not  completed  until  after  the 
bankruptcy  of  the  party  depositing,  at 
which  time  tlie  partnership  was  at  an 


49-2 


CHAP,  III.,  §  II.]                             SET-OFF.  290* 

SECTION    II. SET-OFF. 

Closely  connected  with  the  subjects  discussed  in  the  preceding 
section  is  the  right  of  a  defendant  to  set  up,  in  opposition  to  the 
claim  made  against  him,  a  counter-claim  whicli  the  defendant  might 
himself  make  the  subject  of  a  cross  action  against  the  plaintiff. 
The  power  of  a  defendant  to  do  this  is  much  more  extensive  than 
it  was;  for  by  order  XIX.,  rule  3,  a  defendant  may  set  off  or  set 
up,  by  way  of  counter-claim,  any  right  or  claim,  whether  to  a  defi- 
nite amount  or  not ;  but  provision  is  made  for  disallowing  a  cross 
claim  if  it  cannot  be  conveniently  disposed  of  in  the  particular 
action  in  which  it  is  set  up.  A  short  account,  however,  of  the  law 
as  it  stood  before  this  alteration  may  still  be  useful. 
•  1.  Set-off  at  law. — The  right  of  setting  off  one  claim  against 
another  appears  only  to  exist  at  common  law,  where  a  person  seeks- 
to  avail  himself  of  a  lien  on  goods  in  his  possession,  but  of  which 
he  is  not  the  owner.  But,  by  statute  2  Geo.  II.,  c.  22,  where  there 
were  mutual  debts  between  the  plaintiff  and  the  defendant,  one  debt 
might  beset  against  the  other,  (/i)  Tlie  statute,  however,  only  ap- 
plied to  debts  in  the  narrow  sense  of  the  word,  i.  e.,  definite  and 
ascertained  sums  of  money  owing  by  each  party  to  the  other,  (o) 

end.     So,  where  two  of  three  partners  time  abroad,  it  was  held  that  by  such  an 

affecting,  but  without  authority,  to  bind  endorsement  of  the  bill  by  the  two,  after 

the  firm,  by  deed,  assigned  a  debt  due  to  acts  of  bankruptcy  committed  by  them^ 

them     from    a    correspondent     abroad,  though   before  the   commission    issued^ 

without   his   privity,    to   a   creditor    at  nothing  passed  to  the  creditor;  for  the 

home,  and  afterwards,  by  the  direction  liankrupt    partners     had,    by    relation, 

of  such  correspondent,  drew  a  bill  of  ex-  ceased,  at  the  time  of  such  endorsement, 

change  in  the  name  of  the  firm,  upon  to  have  any  control  over  the  joint  stock 

his   agent    here,   which    was    accepted,  as  partners,  and  therefore  could  not  bind 

payable    to    their   own    order,    for    the  either  the  property  of  their  assignees  or 

amount  of  the  debt;  and  then  the  two  of  their  solvent  partner."  Gow  oh  Partn. 

partners,  having  in  the  meantime  com-  (3d  ed.),  c.  5,  ^  3,  pp.  304-306. 
mitted    acts    of    bankruptcy,   endorsed        (n)  2  Geo.  II.,  c.  22 ;  and  see  8  Geo. 

such  bill  to  the  creditor  of  the  firm  in  II.,  c.  24,  as  to  setting  off  simple  contract 

part  satisfaction  of  his  debt,  and  after-  debts  against  specialty  debts, 
wards  separate  commissions  were  sued        (o)  See  Boddingion  v.  Castelli,  1  El. 

out  against  the  two  partners,  who  were  &  B.  66,  879;  AtwooU  v.  Atwooll,  2  Id. 

declared   bankrupts,   and    their    effects  23 ;  Luckie  v.  Bushby,  13  C.  B.  864  ;  and 

assigned,  the  other  partner  being  all  the  Hutchinson  v.  Sydney,  10  Ex.  438. 

493 


290*  SET-OFF    BETWEEN'    PARTNERS  [bOOK    II., 

and    to    debts    owing   to    and    l)y    eacli    party    in    the    same    ca- 
pacity, (p) 

*2.  Set-of  in  equity. — Courts  of  equity,  although  gov-   r^oQi 
«rned  in  questions  of  set-off  by  principles  similar  to  those 
which  governed  courts  of  law,  went  further  than  courts  of  law  in 
applying  those   principles,  admitting  set-off  in  some  cases  where 
courts  of  law  did  not,  and  disallowing^  it  in  others  where  they  did.  (5) 

Rules  as  to  set-off. — The  combined  eliect  of  the  rules  at  law  and 
in  equity  on  the  subject  of  set-off,  so  far  as  it  is  necessary  to  allude 
to  them  in  the  present  treatise,  are  as  follows  : 

1.  Joint  debts  owing  to  and  by  the  same  persons  in  the  same 
right  can  be  set  off  both  at  law  and  in  equity. 

2.  Separate  debt?  owing  to  and  by  the  same  person  in  the  same 
right  can  also  be  set  off  both  at  law  and  in  equity. 

3.  Debts-not  owing  to  and  by  the  same  persons  in  the  same  right 
cannot  be  set  off  either  at  law  or  in  equity.  But  before  the  Judi- 
cature acts  and  in  considering  whether  debts  were  so  owing,  courts 
of  law  regarded  the  legal  right,  whilst  courts  of  equity  regarded 
the  equitable  right ;  and  this  led  to  the  following  amongst  other 
important  practical  and  different  results,  (r) 

Set-of  by  and  against  surviving  partners. — For  example,  if  a 
surviving  partner  was  sued  at  law  for  a  non-partnership  debt  he 
could  set  off  a  partnership  debt  owing  by  the  plaintiff  to  him 
and  his  late  copartners ;  (s)  and  in  an  action  by  a  surviving 
partner  for  a  debt  due  to  himself  separately,  the  defendant  could 
set  off  a  debt  due  to  himself  from  the  plaintiff  and  his  late  part- 
ners, {t)  In  equity,  however,  this  could  not  have  been  done. 
When  a  creditor  of  a  firm  seeks  to  obtain  payment  of  his  debt 
out  of  the  estate  of  a  deceased  partner,  that  creditor  cannot  set  off 

(  p)  See  Hutchinson  v.  S'turges,  Willes  Jessel,  18  Beav.  100,  as  to  set-off  between 

261;  Watts  u  Rees,  9  Ex.696,  and   11  creditors  and  trustees  of  creditors' deeds. 

Id.  410  ;  Mardall  v.  Thellusson,  6  El.  &  See,  also,  Agra  and  Masterman's  Bank  v. 

B.  976 ;  Pedder  v.  Mayor  of  Preston,  12  Hoffman,  5  N.  R.  214,  sed  qu.  this  case. 

C.  B.  (N.  S.)  535.  (r)  See  Fletcher  v.  Dyche,  2  T.  R.  32, 
(q)  See,   generally,   as    to   set-off   in  and  the  cases  in  the  next  two  notes. 

equity,    Rawson    v.    Samuel,    Cr.   &   P.        (s)  Slipper  v.  Stidstone,  5  T.  R.  493 ; 
161  ;  Clark  v.  Cort,  Id.  154;  Freeman  v.    Golding  v.  Vaughan,  2  Chit.  436. 
Lomas,  9  Hare  109.     See,  also,  Hunt  v.        (t)  French  v.  Andrade,  6  T.  R.  582. 

494 


CHAP.  III.,  §  II.]  AND    NOX-PARTNEES.  291* 

a  debt  due  from  himself  to  the  deceased  on  a  separate  account ;  the 
creditor  must  pay  this  last  debt  in  full,  and  then,  as  regards  the 
debt  in  respect  of  which  he  sues,  rank  as  any  other  creditor  of  the 
firm  against  the  assets  of  the  deceased,  [u)  It  is  obvious  that  if  in 
*9Q91  ^"*^^^  *^  ^^^^  ^^^  ^^^^^  debts  were  set  against  each  other,  the 
~'-^  separate  creditors  of  the  deceased  would  be  paying  a  joint 
creditor  of  the  firm,  unless  the  assets  of  the  deceased  were  sufficient 
to  pay  both  classes  of  creditors  in  full. 

On  the  other  hand,  debts  which  were  really  debts  owing.to  and 
by  a  firm  could  be  set  off  in  equity,  although  not  at  law.  Thus,  in 
Smith  V.  Parkes,  {x)  a  firm  of  three  partners  covenanted  to  pay  a 
certain  sum  of  money  to  the  defendant,  Parkes,  who  was  indebted 
to  the  firm  in  certain  other  sums  on  another  account.  By  the  death 
of  two  of  the  members  of  the  firm,  the  plaintiff,  »Smith,  had  become 
the  sole  surviving  partner,  and  he  was  sued  by  Parkes  on  the  cove- 
nant, and  judgment  was  obtained.  It  was  held  that  notwithstand- 
ing the  judgment  and  its  effect  at  law  Smith  was  entitled  in  equity 
to  set  off  against  the  judgment  debt  the  amount  of  what  was  due 
from  Parkes  to  the  late  firm ;  and  it  was  also  held  that  Smith  had 
this  right,  not  only  as  against  Parkes,  but  also  against  persons  to 
whom  he  had  assigned  the  debt  due  to  him. 

4.  Setting  off  joint  debts  against  separate,  and  vice  versa. — Except 
under  special  circumstances,  a  debt  due  to  or  fi;om  several  persons 
jointly  cannot  be  set  off  against  a  debt  due  from  or  to  one  of  such 
persons  separately,  (y)  This  rule,  which  is  really  involved  in  the 
last,  also  prevailed  before  the  Judicature  acts,  both  at  law  and  in 
equity,  (z)  and  was  of  great  importance  to  partners.  It  scarcely 
requires  to  be  pointed  out  that  to  allow  a  set-off  of  such  debts 
would  be  to  enable  a  creditor  to  obtain  payment  of  what  is  due  to 
him  from  persons  in  no  way  indebted  to  him.  As  a  rule,  therefore, 
a  debt  owing  by  one  of  the  members  of  a  firm  cannot  be  set  off  at 
law  against  a  debt  owing  to  him  and  his  copartners ;  (a)  nor  can  a 

(m)  Addis  V.  Knight,  2  Mer.  117.  Dock  Co.,  L.  R.,  10  C.  P.  300. 

(x)  16  Beav.  115.  (z)  It  cannot  be  done  in  equity,  even 

(y)  See  Kinnerley  v.  Hossack,  2  Taunt,  in  cases  of  fraud.     See  Middleton  v.  Pol- 

170;  Cheetham  v.  Crook,  McLel.  &  Y.  lock,  20  Eq.  515. 

307;  Vulliamy  v.  Noble,  3    Mer.    618.  (a)  Gordon    v.   Ellis,    2   C.    B.  821; 

■See,  also,  Jebsen  v.  East  and  West  India  France  v.  White,  8  Scott  257. 

495 


292*  SET-OFF    BETWEEN    PARTNERS  [bOOK    II.^ 

debt  owing  to  one  of  the  niember.s  of  a  firm   be  set  off  against  a 
debt  owing  by  him  and  his  copartners.  (6)     And  this  rule  applies 
even  where  one  partner  only  has  been  dealt  with,  and  *the  r^^^Qo 
debts  sought  to  be  set  against  each  other  are  a  debt  owing  '- 
by  him,  and  a  debt  owing  to  him  and  others,  but  arising  out  of 
transactions  with  him  alone. 

This  last  point  is  well  illustrated  by  Gordon  v.  Ellis,  (c)  There, 
an  action  was  brought  by  three  partners  for  the  recovery  from  the 
defendant  of  money  received  by  him  for  goods  of  the  plaintiffs  sold 
by  the  defendant  on  their  account.  The  defendant  pleaded,  in 
effect,  that  he  had  been  employed  by  A  only,  that  A  sent  the  goods 
for  sale  as  if  they  were  his  own,  and  that  the  goods  were  sold  by 
the  defendant  as  A's  goods,  and  that  A  was  indebted  to  the  defend- 
ant in  a  larger  amount  than  that  sought  to  be  recovered  in  the 
action.  It  was  admitted  that  if  B  and  C  had  by  their  conduct  in- 
duced the  defendant  to  believe  that  A  was  the  sole  owner  of  the 
goods  in  question,  and  to  deal  with  A  on  that  supposition,  the  de- 
fendant would  have  had  a  good  defence  to  the  action  ;  but  it  was 
held  that  as  the  defendant  did  not  allege  that  such  had  been  the 
case  his  plea  was  a  mere  attempt  to  set  off  a  debt  due  from  one 
member  of  the  firm  against  a  debt  due  to  the  firm  itself,  and 
was  bad. 

In  strict  analogy  to  the  above  rule  it  has  been  decided  in  equity 
that  if  the  members  of  a  firm  have  separate  private  accounts  with 
the  bankers  of  the  firm,  and  a  balance  is  due  to  the  bankers  from 
the  firm  on  the  partnership  account,  the  bankers  have  no  lien  for 
such  balance  on  what  may  be  due  from  themselves  to  the  members 
of  the  firm  on  their  respective  separate  accounts,  and  that  the  debt 
due  to  the  bankers  from  the  partners  jointly  cannot  be  set  off  against 
the  debts  due  from  the  bankers  to  the  partners  separately,  {d)^^ 

(6)  Arnold  v.  Bainbridge,  9  Ex   153;  37.  Set-off  of  joint   debts   against 

McGillivray  v.  Simson,  2  Car.  A  P.  320 ;  separate,  and  vice  versa. — A  defend- 

Boswell  V.  Smith,  6  Car.  &  P.  60.  ant  may  set  up  in  his  defence,  under  the 

(c)  2  C.  B.  821 ;  and  see  the  same  case,  general  issue,  that  the  plaintiff  is  one  of 
7  Man.  &  G.  607,  where  it  will  be  ob-  a  partnership,  and  that  the  firm  is  in- 
served  the  plea  was  materially  different,  debted  to  him  in  a  larger  sum  than  that 

(d)  See  Watts  v.  Christie,  1 1  Beav.  which  the  plaintiff  demands,  it  being  a 
546 ;  Cavendish  v.  Geave.s,  24  Id.  173.  part    of  the   same   transaction.      Buck- 

496 


CHAP.  Ill,,  §  II.]  AXD    XON-PAETXERS. 


293* 


Efect  of  Judicature  acts. — The  Judicature  acts  have  extended 
the  equitable  principles  of  set-off  to  all  actions  in  the  high  court  ;(e) 


ingham  v.  Burgess,  3  McLean  (U.  S.) 
364. 

The  fact  that  a  creditor  of  the  firm  is 
indebted  to  one  of  the  partners  does  not, 
by  operation  of  law,  extinguish  the 
partnership  debt,  although  such  partner 
may  ofiset  or  oppose  his  claim  against 
that  of  the  creditor  of  the  firm,  by  way 
of  defence  to  an  action  brought  by  such 
creditor  against  the  firm.  Beauregard 
V.  Cass,  91  U.  S.  134. 

The  holder  of  a  claim  against  an  in- 
dividual member  of  a  firm,  who  pur- 
chases from  such  member  what  he 
knows  to  be  partnership  goods,  cannot, 
in  an  action  by  the  partners  or  their 
assignee  for  the  amount  of  such  goods, 
plead  such  claim  either  in  payment  or 
setoff  against  the  partners,  unless,  by 
their  assent,  the  copartnership  property 
was  delivered  in  payment  of  the  indi- 
vidual partner's  debt.  Wise  v.  Copley, 
36  Ga.  508.  See,  also,  Warder  v.  New- 
digate,  11  B.  Mon.  (Ky.)  174. 

In  an  account  betAveen  the  adminis- 
trator of  a  partner  deceased,  insolvent, 
and  a  surviving  partner,  the  individual 
claim  of  the  survivor  against  the  de- 
ceased cannot  be  taken  into  the  account 
and  deducted  from  the  balance  in  the 
survivor's  hands.  Berry  v.  Powell,  18 
111.  98. 

According  to  the  construction  placed 
upon  the  statute  allowing  partners  to  be 
sued  severally,  it  does  not  authorize  a 
demand  due  by  the  firm  to  be  set  oflf 
against  a  separate  debt  due  to  one  of  the 
partners.  Hoyt  v.  Murphy,  18  Ala. 
316. 

The  dictum  contained  in  Taylor  v. 
Bass,  5  Ala.  110,  that  a  mere  assent  of 


the  other  partners  to  the  exclusive  use 
and  appropriation  of  a  debt  due  the 
firm  by  one  of  the  partners,  converts 
such  debt  into  a  proper  subject  to  set- 
off by  him,  when  sued  alone  on  an  indi- 
vidual liability,  disapproved.  Jones  v. 
Blair,  57  Ala.  457. 

Partners  may  set  oflf  claims  held 
jointly,  but  not  individually.  Sager  v. 
Tupper,  38  Mich.  259. 

Where  one  partner  executed  a  bond 
in  the  name  of  the  firm,  under  seal,  for 
a  debt  due  by  the  firm,  in  an  action  by 
the  obligee  on  such  bond,  a  debt  due  by 
the  obligee  to  the  firm  was  a  good  set- 
off, notwithstanding  the  plaintiff  is  al- 
lowed to  enter  a  nol.  pros,  as  to  one  of 
the  firm,  and  proves  that  only  the  part- 
ner retained  as  defendant  signed  the 
instrument.  Sellers  v.  Streator,  5  Jones 
(N.  C.)  L.  261. 

But  in  Montz  v.  Morris,  89  Pa.  St. 
392,  it  was  held  that  one  partner  may, 
with  the  assent  of  the  others,  in  an  ac- 
tion against  them  individually,  set  off 
a  debt  due  to  the  firm  by  the  plaintiff; 
and  that  proof  of  the  account  and  such 
assent  to  its  use  are  all  that  is  required, 
an  assignment  of  account  to  the  defend- 
ant interposing  the  set-off  being  unne- 
cessary. 

The  private  debt  of  one  copartner 
cannot  be  set  off  against  a  copartnership 
demand.  Powrie  v.  Fletcher,  2  Bay 
(S.  C.)  146.  S.  P.  in  New  York,  Ladue 
V.  Hc<rt,  4  Wend.  (N.  Y.)  583. 

Illustrations.— The  plaintiff,  one 
partner  of  a  firm,  upon  a  dissolution 
thereof,  sold  all  his  interest  in  the  prop- 
erty and  debts  due  the  firm  to  the  de- 
fendant, the  other  psrrtner,  and  the  de- 


(e)  See  sections  24  and  25  (6)  (11)  of  the  Judicature  act,  1873. 

497  32 


293*  SET-OFF   BETWEEN   PARTNERS  [boOK    II., 

and  notwithstanding  the  rules  relating  to  joint  and  to  several 
claims,  (/)  the  old  rule  precluding  the  set-off  of  a  joint  against  a 
separate  debt,  or  vice  versa,  is  still  in  force,  [g) 

^Exceptions  to  general  rule. — To  the  general  rule  which 
-'  precludes  the  set-off  of  a  debt  due  to  a  firm  against  a  debt 
owing  by  one  of  its  members,  and  vice  versa,  there  are,  however,  a 
few  exceptions. 

Agreement. — If  it  can  be  shown  that  all  parties  concerned  have 
expressly  or  impliedly  agreed  that  a  debt  owing  by  one  of  them 
only  shall  be  set  off  against  a  debt  owing  to  them  all,  or  vice  versa, 
effect  will  be  given  to  that  agreement,  and  the  application  of  the 
general  doctrine  in  question  will  thereby  be  precluded.  Regard, 
therefore,  must  be  had  to  any  agreement  which  the  parties  them- 
selves may  have  come  to,  and  to  their  course  of  dealing  with  each 
other.  [K) 

So,  if  a  joint  and  several  promissory  note  is  made  by  partners, 
and  one  of  them  sues  the  payee  for  some  separate  demand,  the  de- 
fendant gave  the  plaintiff  a  promissory  Wliere  a  partner  retired  from  the 
note  and  a  bond  of  indemnity  against  firm,  and  a  new  firm  was  formed,  which 
the  liabilities  of  the  firm.  Held,  that  undertook  to  pay  the  debts  of  the  old 
the  defendant  could  not  set  off  against  firm,  but  failed,  leaving  debts  of  the 
said  note  an  account  due  from  the  plain-  old  firm  unpaid  which  the  retiring  part- 
tiff  to  the  firm  at  its  dissolution.  Lesiire  ner  had  to  pay,  it  was  held  that  he 
V.  Norris,  11  Cush.  (Mass.)  328.  might  set  off  such  payment  against  a 

In  an  action  by  two  partners  for  the  bond  which  lie  had  given  to  the  new 
price  of  goods  sold,  defendant  proved  firm,  and  which  they  had  assigned  to  A 
that  both  plaintifis  had  boarded  with  for  value.  Hupp  v.  Hupp,  6  Gratt. 
him,  and  had  each  told  him  that  "what    (Va.)  310. 

one  might  call  for  would  be  the  same  (/)  Ord.  XVI.,  rr.  1,  4,  6,  an/e  p.*282. 
as  if  both  should  order  it."  Held,  that  [g)  Bowyear  v.  Pawson,  6  Q.  B.  D. 
his  counter-claim  for  liquors  and  cigars  540.  However,  in  Manchester,  Sheffield 
furnished  to  each  of  the  plaintiffs  while  and  Lincoln  Rail.  Co.  v.  Brooks,  2  Ex.  D. 
so  boarding  with  defendant  should  be  243,  a  separate  debt  was  allowed  to  be 
allowed  in  defence  pro  tanto.  Hartung  pleaded  by  way  of  set-off  to  an  action 
V.  Siccardi,  3  E.  D.  Smith  (N.  Y.)  560.    for  a  joint  debt.     This  can  hardly  have 

A,  the  partner  of  B,  assigned  all  his  been  right, 
interest  in  the  partnership  effects  to  B,  (h)  See  Vulliamy  v.  Noble,  3  Mer. 
with  power  to  settle  and  compromise  503 ;  Downam  v.  Matthews,  Pr.  in  Ch. 
Held,  that  B  might  set  off  a  debt  due  to  580;  Cheetham  v.  Crook,  McLel.  &  Y. 
the  firm  against  a  debt  due  by  himself  307;  Kinnerley  v.  Hossack,  2  Taunt, 
alone.    Craig  v.  Henderson,  2  Pa.  St.  261.    170. 

498 


<:HAP.  III.,  §  II.]  AND   NON-PARTNERS.  294* 

fendant  can  set  off  the  note ;  for,  ex  hypothesi,  it  is  the  several  note 
of  the  partner  suing  him.  (i) 

An  agreement  by  one  partner  that  a  debt  due  from  himself  sep- 
arately shall  be  set  off  against  a  debt  due  to  hira  and  his  copartners 
jointly  is  prima  fdcle  a  fraud  on  them,  and  a  set-off'  founded  on 
such  an  agreement  cannot,  it  is  apprehended,  be  maintained  in  the 
absence  of  special  circumstances  rendering  such  an  agreement  bind- 
ing on  the  other  partners,  (k) 

Another  exception  occurs  where  one  partner  has  been  allowed  by 
his  copartners  to  act  as  if  he  were  a  principal  and  not  an  agent  of 
the  firm. 

Set-of  where  there  is  a  dormant  partner. — It  has  been  seen  that 
dormant  partners  may  join  their  copartners  in  suing  on  contracts 
entered  into  in  form  with  the  latter  only.  But  dormant  partners 
cannot,  by  coming  forward  and  suing  on  such  contracts,  deprive  the 
defendant  of  any  right  of  set-off  of  which  he  might  have  availed 
himself  if  the  non-dormant  partners  only  had  been  plaintiffs.  This 
was  held  by  *Lord  Kenyon  in  Stracey  v.  Deey,  (1)  where  (-^oqk 
the  plaintiffs,  Stracey,  Ross  and  others,  were  in  partnership  *- 
as  grocers,  and  Ross  was  the  only  person  who  appeared  to  the  pub- 
lic as  concerned  in  the  partnership  business.  The  defendant  had 
dealt  with  Ross  and  had  become  indebted  for  grocery  supplied  by 
him.  On  the  other  hand,  the  defendant  had  expended  money  for 
Ross,  and  had  done  so  on  the  supposition  that  the  moneys  thus  ex- 
pended could  be  set  off  against  what  was  due  for  tiie  grocery.  The 
plaintiffs,  however,  contended  that  this  set-off  could  not  be  made ; 
but  Lord  Kenyon  held  that  as  the  defendant  had  a  good  defence  by 
way  of  set-off  against  Ross,  and  had  been  by  the  conduct  of  the 
plaintiffs  led  to  believe  that  Ross  was  the  only  person  he  contracted 
with,  they  could  not  pull  off  the  mask  and  claim  payment  of  debts 
supposed  to  be  due  to  Ross  alone,  without  allowing  the  defendant 

(?;)  See  Owen  t;.  Wilkinson,  5  C.B.(N.  69;  Nottidge  v.  Pritchard,  2  CI.  &  F. 

•S.)  526.  379. 

(/t)  Wallace  v.  Kelsall,  7  Mees.  &  W.  (/)  7  T.  R.  361,  note,  and  2  Esi-.  469. 

264,  is  the  other  way,  but  is  to  be  ex-  See,  too,  Teed  v.  Elworthy,  14  East  213, 

plained    by  th-e   old  technical  rules  of  and  De  Mautort  v.  Saunders,  1  B.  «fc  Ad. 

pleading,  which  are  now  abolished,  see  398,   overruling    Dubois    v.    Ludert,    5 

•ante  p.  *269.     Piercy  v.  Fynney,  12  Eq.  Taunt.  609. 

49-9 


295*.  SET-OFF   BETWEEN    PARTNERS  [bOOK    II.  ^ 

the  same  advantages  and  equities  in  his  defence  as  he  would  have 
had  in  an  action  brouglit  by  Ross  solely,  (m) 

In  this  case  all  the  partners  except  Ross  were  dormant,  and  by 
the  terms  of  the  agreement  into  which  all  had  entered,  Ross  alone 
was  to  be  the  apparent  trader.  His  copartners  were  therefore  sim- 
ply in  the  position  of  undisclosed  principals,  and  were  treated  ac- 
cordingly by  the  court.  38 

Cases  ivhere  one  partner  only  has  been  dealt  with. — In  Gordon  v. 
Ellis,  (n)  which  has  been  before  referred  to,  an  attempt  was  made 
to  extend  the  principle  on  which  Lord  Kenyon  decided  Stracey  v. 
Deey  to  all  cases  in  which  one  partner  only  transacts  the  business 
of  the  firm  and  becomes  himself  indebted  to  the  person  with  whom 
he  deals.  But  it  was  held,  and  rightly,  that  a  person  liable  to  be 
sued  by  a  firm  cannot  set  oflF  a  debt  due  from  one  only  of  its  mem- 
bers on  the  ground  that  he  only  was  dealt  with  by  the  defendant, 
unless  it  can  be  shown  that  the  other  members  of  the  firm  induced 
the  defendant  by  their  conduct  to  treat  their  copartner  as  the  only 
person  with  whom  the  defendant  had  to  do.  (o) 

^     -,       *But  here  again  it  is  to  be  observed  that  if  the  debt  due 
2961 

-^   from  one  partner  can  be  treated  as  due  from  the  firm,  that 

debt  may  be  set  off  against  another  debt  due  to  it.  This  is  illus- 
trated by  the  same  case  of  Gordon  v.  Ellis,  (79)  where,  in  an  action  by 
a  firm  for  money  due  to  it  from  the  defendant  for  goods  of  the  firm 
sold  by  him,  the  latter  was  held  entitled  to  set  off  a  debt  due  to  him 
for  an  advance  made  by  him  to  one  of  the  partners  on  account  of 
those  goods.     The  court  thought  that  although  the  money  was  ad- 

(wi)  See  Cooke  v.  Eshelby,   12  App.  as  if  B  had  sued  alone.     Ward  r.  Levis- 

Cas.  271 ;  George  v.  Clagett,  7  T.  R.  359  ;  ton,  7  Blackf.  (Ind.)  466. 

Borries  v.  Imperial  Ottoman  Bank,  L.  Wheie  suit  is  brought  by  ostensible 

R.,  9  C.  P.  38.  and  dormant  partners  the  defendant  may 

38.  Set-off  where   there    is   a  dor-  set  off  all  debts  due  from  the  ostensible 

mant  partner. — If  A,  a  member  of  a  partners  separately.     Lord  v.  Baldwin, 

firm,  deal  in  his  own  name  in  business  6  Pick.  (Mass.)  352. 

of  the  firm  with  B,  who  is  ignorant  of  (n)  2  C.  B.  821,  ante  p.  *293. 

the  partnership,  B  may  be  sued  for  a  de-  (0)  See  Ramazotti  v.  Bowring,  7  C.  B. 

mand   against    him,  arising   from   such  (N.  S.)851;  Bonfield  r.  Smith,  12  Mees. 

dealing,  eilher  by  A  alone  or  by  the  firm.  &  W.  405  ;  ante  p.  *280  ;  and  Baring  v. 

And  in  a  suit  by  the  firm  for  such  de-  Corrie,  2  B.  &  A.  137. 

mand,  B's  right  of  set-ofl"  is   the  same  (p)  7  Man.  &  G.  607. 

oOO 


CHAP.  III.,  §  II.]  AXD    NOX-PARTNERS.  296* 

vanced  to  one  partner  only,  the  defendant  had  a  right  to  treat  it  as 
an  advance  to  the  firm  made  on  that  partner's  requisition  whilst 
acting  within  the  scope  of  his  apparent  authority  as  agent  of  the 
firm.  In  point  of  fact,  the  defendant,  instead  of  waiting  until  he 
had  sold  the  goods  and  then  handing  over  the  money  produced  by 
their  sale,  made  a  payment  on  account,  and  he  sought  notliing  more 
than  to  have  the  amount  so  prepaid  deducted  from  the  sum  for 
which  he  sold  the  goods.  39 

Attempt  to  avoid  set-off  by  suing  one  partner. — It  sometimes  hap- 
pens that  in  order  to  avoid  a  defence  of  set-off,  a  plaintiff  who  is 
indebted  to  a  firm  sues  one  of  its  members  alone  for  a  debt  owing 
to  the  plaintiff  by  the  firm.  In  such  a  case  the  defendant  may  re- 
quire his  copartners  to  be  joined,  [q)  Again,  if  a  firm  holds  the 
note  of  a  person  to  whom  it  is  itself  indebted,  and  in  order  to  de- 
prive him  of  his  right  of  set-off,  endorses  the  note  to  one  of  its 
members,  and  he  alone  sues  on  it,  a  defence  disclosing  the  facts  and 
setting  off  the  debt  owing  to  the  defendant  by  the  firm  will  be 
good,  {r) 

Set-off  where  there  has  been  an  assignment. — The  provision  of  the 
Judicature  acts  relating  to  the  assignment  of  debts  {ante  p.  *285) 
has  greatly  facilitated  defences  by  way  of  set-off  where  there  has 
been  a  change  in  a  firm.  The  principles  applicable  to  such  cases 
are  well  illustrated  by  the  following  decision  : 

In  Cavendish  v.  Geaves  (.s)  the  plaintiff  was  indebted  on  bonds  to 
a  firm  of  bankers.     Many  changes  in  the  firm  took  *place  p^.->Q- 
and  the  bonds  in  question  were  on  each  change  assigned  by  ^  "^ 
the  old  to  the  new  firm.     The  plaintiff  had  an  account  with  the 
bank  as  one  of  its  customers,  and  when  the  bank  stopped  payment 
a  balance  was  owing  to  him  on  that  account ;  but  the  bonds  had 

39.  Cases  where  one  partner  only  Smith,  12  Mees.  &  W.  405. 
has  been  dealt  with. — Where  one  of        (»•)  Puller  v.  Roe,  1  Peake  N.  P.  260. 
two  law   partners  sues  individually  for        (s)  24  Beav.  163.    See,  also,  Jefferys  v. 

work  which  has  been  uniformly  done  in  Agra  and  Masterman's  Bank,  2  Eq.  674; 

the  plaintiff's  name,  defendant  may  set  and  as  lo  set-off  at  law  as  against  the 

off  a  demand  against  the  firm.     Piatt  v.  assignee  of  a  debt  after  notice  of  the  as- 

Halen,  23  Wend.  (N.  Y.)  456.  signment.     Watson  v.  Mid- Wales  Rail. 

iq)  Ord.  XVI.,  r.  11.     See  Stackwood  Co.,  L.  R.,  2  C.  P.  593. 
V.  Dunn,  3  Q.  B.  823,  and   Bonfield  v. 

501 


297*  SET-OFF   BETWEEN   PARTNERS  [bOOK   II.^ 

been  previously  assigned  to  third  parties,  without  notice,  however, 
to  the  plaintiff.  The  question  then  arose  whether,  notwithstanding 
the  various  changes  in  the  firm,  and  the  assignment  of  the  bonds, 
the  plaintiff  was  entitled  to  set  off,  against  the  debt  due  from  him 
on  the  bonds,  the  amount  due  to  him  as  a  customer  of  the  bank, 
and  it  Avas  held  tiiat  he  was.  The  judgment  in  this  case  is  pecu- 
liarly instructive,  and  the  following  extract  from  it  is  submitted  to 
the  reader  without  apology. 

Effect  of  assignments  and  of  changes  in  firm  on  right  of  set-off. — "  If  a  customer 
borrow  money  from  his  bankers,  and  give  a  bond  to  secure  it,  and  afterwards,  on 
the  balance  of  his  general  banking  account,  a  balance  is  due  to  the  customer  from, 
the  same  bankers,  who  are  the  obligees  of  the  bond,  a  right  to  set  off  the  balance 
against  the  money  due  on  the  bond  will  exist  both  at  law  and  in  equity,  (t) 

"  If  the  firm  were  altered,  and  the  bond  assigned  by  the  original  obligees  to  the 
new  firm,  and  notice  of  that  assignment  were  given  to  the  debtor,  and  if,  after  this, 
a  balance  were  due  to  him  from  the  new  firm  (the  assignees  of  the  bond),  then  no 
right  of  set-off  would  exist  at  law,  because  the  assignment  of  the  chose  in  action 
would  be  inoperative  at  law,  and  the  obligees  of  the  bond,  and  the  debtor  on  the 
general  account  would  be  different  persons ;  but,  as  in  equity,  the  persons  entitled 
to  the  bond  and  the  debtors  on  the  general  account  would  be  the  same  persons, 
a  right  to  set-off  would  exist  in  this  court,  and  the  customer  would,  in  equity,  be- 
entitled  to  set  off  the  balance  due  to  him  against  the  bond  debt  due  from  him. 

"  If,  after  the  bond  had  been  given,  it  had  been  assigned  to  strangers,  and  no 
notice  of  that  assignment  had  been  given  to  the  original  debtor  (the  obligor  of  the 
bond),  then  his  rights  would  remain  the  same.  Thus,  if  the  assignment  had  been, 
made  to  the  stranger  before  any  alteration  of  the  firm,  then  the  right  of  set-off 
would  still  remain  at  law,  where  the  obligees  of  the  bond  and  the  debtors  on  the 
general  account  would  be  the  same  persons,  and  in  equity  also,  if  the  matter  on 
account  were  brought  here,  as  the  assignees  of  the  chose  in  action  would  be  bound 
by  the  equities  affecting  their  assignors. 

"  But,  if  notice  of  that  assignment  had  been  given  to  the  original  debtor,  no 
right  of  set-off  would  exist  in  this  court  for  the  balance  subsequently  due  by  the 
bankers  to  the  obligor ;  because  the  persons  entitled  to  the  bond  would,  as  the 
obligor  knew,  be  different  persons  from  the  debtors  to  him  on  the  general  account 
with  whotn  he  had  continued  to  deal. 

"If   the   assignment   of   the   bond    had    been    made   to    the   new   firm,    with 
♦oqan  *notice  to  the  obligor,  they  would,  if  debtors  on  the  genera-l  account,  be 
liable  to  the  same  rights  of  set-off  in  equity  as  if  they  had   been  the 
obligees. 

"  If,  after  the  alteration  of  the  firm,  and  after  the  assignment  of  the  bond  to  the 
new  firm,  with  notice  to  the  debtor  or  obligor  of  that  assignment,  an  assignment 

(0  Roxburghe  v.  Cox,  17  Ch.  D.  520. 

502 


CHAP.  III.,  §  III.]  AND    NON-PARTNERS.  298* 

had  been  made  of  the  bond  to  strangers,  and  no  notice  of  that  second  assignment 
given  to  the  obligor,  then  the  rights  of  set-off  would  still  remain  to  him  in  equity 
as  against  tlie  first  assignees,  of  whose  assignment  he  had  notice,  and  the  second 
assignees  would,  in  equity,  be  bound  by  it,  because,  as  I  have  stated,  the  assignees 
of  the  bond  take  it  subject  to  all  the  equities  which  affect  the  assignors." 

The  court,  after  laying  down  these  general  propositions,  came  to  the  conclusion 
on  the  evidence  in  the  case  that  the  plaintiff  was  informed  that  the  successive 
firms  with  which  he  dealt  as  customers  were  his  creditors  in  respect  of  the  bonds, 
but  that  he  had  no  notice  of  their  assignment  by  the  firm  which  stopped  payment 
to  the  holders  of  them,  and  that  therefore  he  was  entitled,  even  as  against  such 
holders,  to  set  off  what  was  due  to  him  as  a  customer  of  the  bank  when  it  stopped 
payment. 

The  above  decisions  are  sufficient  to  show  that  in  allowing  debts 
to  be  set  oif  against  each  other,  courts  of  equity  went  far  beyond 
courts  of  law,  although  they  did  not  introduce  any  new  principle 
of  set-off.  The  truth  of  this  was  still  more  apparent  from  the  cases 
in  which  set-off  was  not  allowed,  one  of  the  debts  being  joint,  and 
the  other  several  only. 


SECTION  III. — OF  EXECUTION  AGAINST  PARTNERS  FOR  THE  DEBTS 

OF  THE  FIRM. 

Execution  against  partners. — If  a  judgment  has  been  obtained 
against  several  persons  sued  jointly,  the  writ  of  execution  founded 
on  the  judgment  must  be  against  all  of  them,  and  not  against  some 
or  one  of  them  only ;  for  the  judgment  does  not  wan-ant  such  a 
writ,  {u)  But,  although  the  writ  of  execution  on  a  joint  judgment 
must  be  joint  in  form,  it  may  be  levied  upon  all,  or  any  one  or  more 
of  the  persons  named  in  it ;  for  each  is  liable  to  the  judgment  creditor 
for  the  whole,  and  not  for  a  proportionate  part  of  the  *sum  ^^,=299 
for  which  judgment  is  obtained,  (a;)     The  consequence  of 

(m)  See    Penoyer    v.    Brace,    1    Ld.  (x)  See  per  De  Grey,  C.  J.,  in  Abbot 

Eaym.  244  ;  Clarke  v.  Clement,  6  T.  K.  v.  Smith,  2  Wm.  Bl.  949  ;  and  Herries  v. 

526 ;    2  Wms.  Saund.  72,  / ;    Bac.   Ab.  Jamieson,  5  T.  R.  556,  per  Lord  Ken- 

"  Execution,"  G,  1.  von. 

503 


299*  EXECUTION    AGAINST    PARTNERS.  [bOOK   II., 

this  is  that  the  slieriff  may  execute  a  writ  issued  against  several 
partners  jointly,  eitlier  on  their  joint  property,  or  on  the  separate 
property  of  any  one  or  more  of  them,  or  both  on  their  joint  and  on 
their  respective  separate  properties ;  and  so  long  as  there  is,  within 
the  sheriff's  bailiwick,  any  property  of  the  partners,  or  any  of  them, 
a  return  of  nulla  bona  is  improper,  (y)  Of  course,  if  the  judgment 
creditor  has  had  execution  and  satisfaction  against  one  of  the  part- 
ners, he  cannot  afterwards  go  against  any  of  the  others; (2)  but  the 
important  point  to  observe  is  that  the  sheriff  is  not  bound  to  levy 
on  the  goods  of  the  firm  before  having  recourse  to  the  separate  prop- 
erties of  its  members,  and  that  they  cannot  require  the  sheriff  to 
execute  the  writ  in  one  way  rather  than  another. 

Similar  rules  are  applicable  to  attachments  of  debts  under  the 
Common  Law  Procedure  act,  1854  (17  and  18  Vict.,  c.  125,  §  61), 
it  having  been  determined  that  a  judgment  creditor  of  three  per- 
sons can,  under  the  act  in  question,  attach  debts  owing  to  any  one 
or  more  of  his  judgment  debtors. (a) 

The  extent  to  which  the  right  to  levy  execution  against  the  effects 
of  a  firm  is  affected  by  bankruptcy  will  be  examined  hereafter. 

The  procedure  on  a  judgment  against  a  firm  (6)  is  regulated  by 
order  XLII.,  rule  10,  which  is  as  follows: 

Execution  against  partners  on  judgment  against  firm. — Where  a  judgment  or  order 
is  against  a  firm,  execution  may  i-ssiie: 

(a^  Against  any  property  of  the  partnership  ; 

(6)  Against  any  person  who  has  appeared  in  his  own  name  under  order  XII., 
rule  15,  or  who  has  admitted  on  the  pleadings  that  he  is,  or  has  been  adjudged  tr 
be  a  partner ; 

(c)  Against  any  person  who  has  been  served,  as  a  partner,  with  the  writ  of  sum- 
mons, and  has  failed  to  appear. 

If  the  party  who  has  obtained  judgment  or  an  order  claims  to  be  entitled  to  issue 
execution  against  any  other  person  as  being  a  member  of  the  firm,  he  may  apply 
to  the  court  or  a  judge  for  leave  so  to  do;  and  the  court  or  judge  may  give  such 
itonn-]  leave  if  the  liability  l)e  not  disputed,  or,  if  such  liability  *be  disputed,  may 
order  that  the  liability  of  such  person  be  tried  and  determined  in  any  man- 
ner in  which  any  issue  or  question  in  an  action  may  be  tried  and  determined. 

(2/)  See  Jones  v.  Clayton,  4  Mau.  &  S.  (6)  The  firm  here  means  the  partners 
349.  when  the  cause  of  action  accrued,  ante 

(z)  See  Com.  Dig.,  "  Execution,"  H.    p.  *265. 
(a)  Miller  v.  Mynn,  1  El.  &  E.  1075. 

504 


CHAP.  III.,  §  III.]    EXECUTION   AGAINST   PARTNERS.  300* 

It  is  not  clearly  said  iu  this  rule  that  execution  must  first  be 
levied  against  the  joint  estate  of  the  firm  before  having  recourse  to 
the  separate  estates  of  the  members;  and,  having  regard  to  the 
previous  well-established  practice,  tiie  rule  cannot  be  construed  as 
rendering  such  a  course  necessary. 

The  proper  mode  of  entering  up  judgment  has  been  already  con- 
sidered, ante  p.  *266. 

Execution  on  judgment  against  firm. — If  judgment  is  entered  up 
against  a  firm  in  its  mercantile  name,  execution  can  only  issue  with- 
out leave  against  the  property  of  the  firm  (c)  or  against  those  persons 
specially  mentioned  in  order  XLII.,  rule  10;  other  persons  sought 
to  be  made  liable  must  be  proceeded  against  in  some  other  way  and 
some  judgment  or  order  must  be  obtained  against  them  establishing 
their  liability  before  execution  can  issue  against  them,  (d)  An  action 
founded  on  the  judgment  may  be  brought  against  them,  and  it  is 
not  necessary  to  proceed  by  an  issue  and  an  order  under  the  rule,  (e) 
But  the  judgment  cannot  be  made  the  foundation  of  a  debtor's  sum- 
mons in  bankruptcy  against  them  if  they  dispute  their  liability ; 
for,  in  the  case  supposed,  their  liability  in  respect  of  the  judgment 
has  not  yet  been  established,  {f)^^ 

The  mode  of  taking  in  execution  the  share  of  one  partner  on  a 
separate  judgment  against  him  will  be  examined  hereafter.  See 
book  III.,  ch.  5,  §  4. 

(c)  If  there  is  a  receiver,  application  Partnership  creditors  have  no  lien  an 

must  be  made  to  the  court.     Kewney  v.  the  partnership  effects,  until  they  have 

Attrill,  34  Ch.  D.  345.  obtained  judgment,  in  the  case  of  land, 

id)  Davis  v.  Morris,  10  Q.  B.  D.  436.  or    execution    in    case    of    personalty. 

(e)  Clark  v.  Cullen,  9  Q.  B.  D.  355.  Reese  v.  Bradford,  13  Ala.  837.     S.  P., 

(/)  Ex  parte  Young,  19  Ch.  D.  124  ;  Mayer  v.  Clark,  40  Ala.  259. 

Ex  parte  Blain,  12  Ch.  D.  522,  where  The  entire  assets  of  a  partnership  are, 

the  alleged  debtor  was  a  foreigner  re-  in  equity,  subject  to  the  payment  of  its 

sidino-  abroad.  debts.     Coster  v.  Bank  of  Georgia,  24 

40.  Executions  against  partners  on  Ala.  37. 

judgment  against  firm.— In  the  United  While  the  legal  title  of  partnership 

States  courts,  partnership  property  may  property  remains  in  the  firm,  a  creditor 

be  held  for  a  partnership  debt,  though  may   pursue  his  remedy  against  it,  at 

judgment  can  be  obtained  only  against  law,  in  the  same  manner  as  against  an 

one  partner,   by   reason   of  the   other's  individual  debtor.     But  when  the  legal 

being  out  of  the  jurisdiction.     Inbusch  title  has  been  conveyed  to  a  third  person 

V.  Farwell,  1  Black  (U.  S.)  566.  bona  fide,  the    creditor    can  pursue  the 

505 


300=" 


EXECUTION    AGAINST   PARTNERS.  [bOOK    II., 


property  only  by  a  bill  in  equity  to  the  levy  should  be  on  the  pnrtner's 
marshal  the  assets  and  enforce  his  interest  in  the  joint  stock,  and  a  sale 
equitable  lien.  Stokes  v.  Stevens,  40  thereof  would  give  the  purchaser  a  right 
Cal.  391.  ^°  ^°  account  and  division.     Clagelt  «;. 

An  execution  against  a  firm  has  the  Kilbourne,  1  Black  (U.  S.)  346. 
preference  over  one  against  an  individual  If  an  officer  attach  and  take  possession 
partner ;  but  where  property  is  sold  on  of  personal  property  of  a  firm  in  Massa- 
an  execution  against  a  partner,  though  chuseits,  on  a  writ  against  one  partner 
after  the  delivery  of  the  execution  who  has  no  equitable  interest  in  such 
against  both  partners,  it  is  a  valid  sale  property,  he  is  a  trespasser.  Cropper  v. 
if  sufficient  lime  had  not  elapsed  for  ad-  Coburn,  2  Curt.  (U.  S.)  465. 
vertisement  and  sale  under  the  other  Under  an  execution  against  one  of 
execution.  Fenton  v.  Folger,  21  Wend,  two  partners,  the  sheriff  may  seize  the 
(N.  Y.)  676.  goods  of  the  firm,  and  sell  the  interest 

The  mere  insolvency  of  a  partnership  of  the  judgment  debtor,  in  which  case 
does  not,  of  itself,  work  such  a  legal  or  the  vendee  will  hold  the  goods  in  com- 
equitable  appropriation  of  its  effects,  in  raon  with  the  other  partner.  United 
the  absence  of  any  proceedings  for  a  States  v.  Williams,  4  McLean  (U.  S.) 
pro   rata   distribution,  as   to  prevent  a    236. 

judgment  creditor  from  making  his  debt  A  purchaser  under  an  execution 
out  of  the  effects  by  execution,  or  to  against  one  partner,  in  his  separate  capa- 
prevent  him  from  removing  fraudulent  city,  becomes  a  tenant  in  common  with 
obstructions  or  assignments  intended  by  the  other  partners,  in  an  undivided  share 
the  debtor  to  hinder  the  execution,  of  the  land  which  he  purchases,  and 
Greene  v.  Breck,  32  Barb.  (N.  Y.)  73.  holds  it  subject  to  all  the  rights  of  the 
—  on  judgment  against  one  part-  other  partners,  and  can  have  no  claim 
ner.— A  creditor  of  an  individual  part-  but  upon  the  separate  interest  of  the 
ner  has  only  a  right  to  sell  what  of  the  individual  partner  in  the  residue  which 
partnership  property  belongs  to  the  may  remain  after  the  partnership  debts 
debtor  partner,  after  paying  the  debts  are  paid.  Gilmore  v.  North  American 
due  by  the  firm,  and  his  own  debt  to  the  Land  Co.,  Pet.  (U.  S.)  C.  C.  460. 
firm.  Merrillu.Rinker,  1  Bald w.  (U.S.)  Upon  execution  against  one  partner, 
528;  Lyndon  v.  Gorham,  1  Gall.  (U.S.)  the  sherifl^  may  levy  on  that  partner's 
367.    S.  P.   in   state  courts:    White  v.    undivided  interest  in  goods,  and  take  the 


Dougherty,  Mart.  &  Y.  (Tenn.)  309; 
M'Carty  v.  Emlen,  2  Yeates  (Pa.)  190  ; 
Dower  v.  Stanffer,  1  Penn.  (N.  J.)  198  ; 
Knox  V  Schepler,  2  Hill  (S.  C.)  595  ; 
Knox  V.  Summers.  4  Yeates  (Pa.)  477  ; 


goods  into  his  exclusive  possession,  and 
that  though  the  firm  debts  exceed  the 
firm  effects.  Andrews  v.  Keith,  34  Ala. 
722. 

Before  the  joint  property  of  a  firm  can 


Tappan  v.  Blaisdell,  5  N.  H.  189 ;  Pierce  be  applied  to  private  debts,  all  debts  of 

V.  Jackson,  6  Mass.  242  ;  Fish  v.  Herrick,  the  partnership  must  be  settled.     Chase 

6  Id.  271.  V.  Steel,  9  Cal.  64 ;  Collins  v.  Butler,  14 

The  levy  of  an  execution  against  one  Cal.  223  ;  Burpee  v.  Bunn,  22  Cal.  194. 
partner  on  a  piece  of  land  belonging  to        The  sheriff  can  levy  on  the  interest  of 

the  firm  gives  the  execution  purchaser  one  partner  in  the  firm  goods,  but  must 

no  title,  legal  or  equitable  to  the  land  ;  sell  subject  to  the  rights  of  firm  creditors- 

506 


CHAP.  III.,  §  III.]    EXECUTION   AGAINST   PARTNEES. 


300" 


and    of  the   other   partners.      Jones   v.  on   the  property  used    in   the  business 

Thompson,  12  Cal.  191.  carried  on  by  B.     A  claimed  the  prop- 

A  judgment  lien  against  one  of  the  erty  as  partnership  property.    Held,  that 

partners  of  a  firm,  individually,  consti-  the  levy  was  just  and  legal,  the  creditor 

tutes  a  lien  on  the  interest  of  that  part-  C  having  a  right  to  look  to  the  properly 

ner  in  the  partnership  property,  which  of  A   to  pay   his  debt.     Van  Valen  i\ 

entitles  the  purchaser  of  it,  when  sold,  Kussell,  13  Barb.  (N.  Y.)  590. 

to  possession,  divested  of  liens  for  firm  A  judgment  was  recovered  against  a 

debts  not  reduced  to  judgments.    Green  partnership  on  confession  of  one  of  the 

V.  Ross,  24  Ga.  613.  partners.    Execution  was  issued  thereon, 

Where  partnership  property  is  sold  on  and  the  partners  paid  the  amount  to  the 

an  execution  against  an  individual  part-  sheriff  after  a  levy  on  partnership  prop- 

ner,   the   firm   cannot   maintain    trover  erty.      Afterwards,   the   judgment   was 

against  the  purchaser  for  the  property,  reversed  as  to  the  partner  who  was  not  a 

The  only  remedy  for  the  other  partner  party  to  it.     Held,  that  the  plaintiff  in 

is  in  equity.     White  v.  Woodward,  8  B.  execution  was  entitled  to  recover  of  the 

Mon.  (Ky.)  484.  sheriff  the  amount  received  by  him  on 

An  execution  against  one  of  two  part-  the  execution.     Harper  v.  Fox,  7  Watts 

ners  may  be  levied  on  the  partnership  &  S.  (Pa.)  142. 

effects.     Wiles  v.  Maddox,  26  Mo.  77.  S.  and  T.,  trading  as  partners,  made 

A  sale  of  partnership  property,  under  several  assignments,  each  of  his  private 

a  separate  execution  against  one  partner,  property  and    interest   in    the    firm,  on 

operates  as  a  dissolution  of  the  partner-  successive  days,  to  the  same  assignees, 

ship.     Renton  v.  Chaplain,  1  Stock.  (N.  who  accepted  both  trusts.     Afterward  a 

J.)  62.  firm  creditor  issued  execution  and  levied 

Illustrations. — A,  residing  in  the  upon  the  partnership  property.  Held, 
country,  and  B  in  the  city  of  New  York,  that  in  the  absence  of  proof  to  the  con- 
both  produce  dealers,  made  an  arrange-  trary,  the  assignment  of  the  firm  prop- 
ment  by  which  they  carried  on  their  erty  to  assignees  by  one  of  the  firm  was 
business  in  connection,  the  profits  at  assented  to  by  the  other,  and  that  the 
both  places  to  be  divided  between  them,  partnership  property  vested  in  the  as- 
intentionally  concealing  the  arrange-  signees,  and  could  not  be  levied  upon 
ment  made.  B  incurred  a  debt  to  C  in  by  the  sheriff,  after  the  assignments  had 
the  course  of  his  business,  confessed  a  been  made  and  accepted.  McNutt  v. 
judgment,  and  the  execution  was  levied  Strayhorn,  39  Pa.  St.  269. 

507 


*BOOK  III.  [*3oi 

OF  THE  RIGHTS  AND  OBLIGATIONS  OF  MEMBERS  OF  PARTNER- 
SHIPS BETWEEN  THEMSELVES. 


CHAPTER  I. 

OF  THE   RIGHT    TO    TAKE    PAItT    IN    THE    SIANAGEMENT   OE   THE  AFFAIRS   OF 

THE   FIRM. 


Each  member  of  pai  tnership  entitled  to  take  part  in  its  manage- 
ment.— la  partnerships,  the  good  faith  of  the  partners  is  pledged 
mutually  to  each  other  that  the  business  shall  be  conducted  with 
their  actual  personal  interposition,  so  that  each  may  see  that  the 
other  is  carrying  it  on  for  their  mutual  advantage,  (a) 

In  the  absence  of  an  express  agreement  to  the  contrary,  the 
powers  of  the  members  of  a  partnership  are  equal,  even  although 
their  shares  may  be  unequal ;  and  there  is  no  right  on  the  part  of 
one  or  more  to  exclude  another  from  an  equal  management  in  the 
concern.  (6)  Moreover,  if  two  persons  are  in  partnership,  and  one  of 
them  mortgages  all  his  share  and  interest  therein  to  the  other,  the 
latter  will  not  be  permitted,  during  the  continuance  of  the  partner- 
ship, to  avail  himself  of  his  rights  as  a  mortgagee  and  to  exclude 
his  copartner  from  interference  in  the  partnership,  (c)  Indeed, 
speaking  generally,  it  may  be  said  that  nothing  is  considered  as  so 
loudly  calling  for  the  interference  of  the  court  between  partners,  as 
the  improper  exclusion  of  one  of  them  by  the  others  from  taking 
part  in  the  management  of  the  partnership  business.  (cZ)l 

(a)  Per  Lord  Eldon  ir  Peacock  v.  (d)  See,  in  addition  to  the  cases  last 
Peacock,  16  Ves.  oL  cited,  Goodman  v.  Whitcomb,  1  Jac.  & 

(6)  Rowe  V.  Wood,  2  Jac.  &  W.  558;  W.  589;  Marshall  v.  Colman,  2  Id.  266. 
see,  too,  Lloyd  v.  Loaring,  6  Ves.  777.  1.    Each    member  entitled  to  take 

(c)  Rowe  V.  Wood,  2  Jac.  &  W.  558.      part  in  the  management. — Where  one 

508 


CHAP.  I.]  RIGHTS   OF   PARTNERS   INTER  SE.  302* 

*  Unless  otherwise  agreed. — It  need,  however,  hardly  be 
"'-'  observed  that  it  is  perfectly  competent  for  partners  to  agree 
that  the  management  of  the  partnership  affairs  shall  be  confided  to 
one  or  more  of  their  nnmber,  exclnsively  of  the  others,  and  that 
where  such  an  agreement  is  entered  into,  it  is  not  competent  for 
those  who  have  agreed  to  take  no  part  in  the  management,  to  trans- 
act the  partnership  business  without  the  consent  of  all  the  other 
partners.  But,  as  was  seen  in  an  earlier  part  of  the  treatise,  every 
Hi '  iiher  of  an  ordinary  firm  \s,  prima-facie  its  agent  for  carrying  on 
its  l)usiness  in  the  usual  way ;  (e)  and  persons  dealing  with  a  part- 
ner within  the  limits  of  his  apparent  authority,  are  entitled  to  hold 
the  firm  answerable  for  his  conduct,  unless  such  persons  had  distinct 
notice  that  his  real  authority  was  less  extensive  than  they  had  a 
right  to  assume -it  to  be.  2 

of  two  partners  is  insolvent,  the  solvent  tirely   foreign   to   the   purposes  of  the 

partner    has    a   right    to   liquidate    the  association.     Gorman  v.  Kussell,  14  Cal. 

affairs  of  the  firm,  and  to  take  them  out  531.     See,  also.  Sweet  v.  Morrison,  2  N. 

of  the  hands  of  the  insolvent  for  that  Y.  St.  Eep.  781 ;  S.  C,  4  Cent.  Rep.  212. 

purpose;  but  this  right  may  be  waived  (e)  Ante  book  II.,  ch.  1. 

by  permitting   the  insolvent  partner  to  2.  Unless   otherwise   agreed.— The 

administer    the    assets.      Vetterlein    v.  assent  of  any  one  of  the  partners  to  the 

Barnes,  6  Fed.  Rep.  693.     But  the  mere  acts  of  their  agent  would  be  good  evi- 

fact  that  a  partnership  may  happen  to  dence  affecting  the  rest,  unless,  by  the 

be  in  debt,  does  not  give  one  partner  the  articles  or  constitution  of-  the  company, 

right  to  prevent  the  other  from  taking  the    whole    concern   and    management 

possession  of  the  partnership  property,  should  be  entrusted  to  a  committee  or 

Carithers  v.  Jarrell,  20  Ga.  842.  board  of  managers,  in   which  case  the 

While,   in   law    partnerships,   either  assent  must  be  proved  to  have  been  given 

partner  may  attend  to  business  entrusted  by  them,  or  some  of  them,  pursuant  to 

to  the  firm,  yet  if  the  firm  contract  with  the  authority  delegated  to  them  by  the 

a  client  for  the  personal  services  of  a  company.     Odiorne  v.  Maxcy,  13  Mass. 

particular  partner,  who  fails  to  perform  178 ;  S.  C,  15  Id.  39. 

them,  it  is  a  breach  of  contract.     But  Evidence,  both  direct  and  circumstan- 

tlie  damages  for  such  breach  will  be  but  tial,  is  admissible  to  prove  that  the  sole 

nominal,  if  another  party  performs  the  power  of  conducting  the  business  of  a 

duty  with  due   professional    skill,    and  firm  has  been  given  to  one  partner.  Such 

without  injury  to  the  client.     Smith  v.  power  may  be  inferred  from  the  conduct 

Hill   13  Ark.  173.  of  the  partners  for  a  series  of  years,  as 

An  association  or  partnership  cannot  that  one  has  exclusively  conducted  the 
exclude  or  expel  a  member  for  refusing  business  of  the  firm,  and  the  other  part- 
to  do  an  act  not  required  by  the  consti-  ner  has  never  questioned  his  acts,  or 
tution  or  laws  when  he  joined,  and  en-  assumed  to  conduct  the  business  himself. 

509 


303*  DUTY   TO   OBSERVE   GOOD    FAITH.  [bOOK    III., 

*CHAPTER  IL  [*303 

OF  THE  GENERAL  DUTY  OP  PARTNERS  TO  OBSERVE  GOOD  FAITH. 


■Section  I. — Preliminary  Remarks,  *303. 

Section  II. — Of  the  Obligation  of  Partners  not  to  Benefit 
Themselves  at  the  Expense  of  their  Copart- 
ners, *305. 

Section  III. — Of  the  Powers  of  a  Majority  of  Partners,  *313. 


SECTIOX  I. PRELIMINARY  REMARKS. 

High  standard  of  honor  requisite  among  partners. — In  societatis 
contractibus  fides  exuheret.{a)  The  utmost  good  faith  is  due  from 
every  member  of  a  partnership  towards  every  other  member ;  and 
if  any  dispute  arise  between  partners  touching  any  transaction  by 
which  one  seeks  to  benefit  himself  at  the  expense  of  the  firm,  he 
will  be  required  to  show,  not  only  that  he  has  law  on  his  side,  but 
that  his  conduct  will  bear  to  be  tried  by  the  highest  standard  of 
honor.  (6)  Thus,  if  one  partner  knows  more  about  the  state  of  the 
partnership  accounts  than  another,  and,  concealing  what  he  knows, 
enters  into  an  agreement  with  that  other  relative  to  some  matter 


It  is  proper  to  show  any  reason  existing,  immediately  afterwards  repudiates   the 

or  expressed  by  the  partners,  why  it  was  agreement  to  become  a  partner,  he  is 

not  desirable  or  desired  that  the  other  not    entitled    to    any   of    the   property 

should  conduct  the  business,  as  that  he  bought,  nor  are  his  individual  creditors, 

had  little  interest  in  the  concern,  while  Kice  v.  Shuman,  43  Pa.  St.  37. 
the   interest  of  the   managing    partner        (a)  Cod.  IV.,  tit.  37,  1.  3. 
was    large.     Anthony  v.   Wheatons,   7        (6)  See  Blisset  v.  Daniel,  10  Hare  522, 

R.  i.  49.  536.    Compare  Cassels  v.  Stewart,  6  App. 

Where  one  permits  another  to    buy  Cas.  64,  noticed  infra,  which  shows  how 

Block  on  their  joint  account,  in  antici-  difficult  it  is  to  apply  this  general  prin- 

pation  of  forming   a    partnership,  and  ciple. 

510 


CHAP.  II.,  §  I.]    DUTY    TO    OBSERVE    GOOD    FAITH.  303* 

as  to  whicli  a  knowledge  of  the  state  of  the  accounts  is  material, 
Buch  agreement  will  not  be  allowed  to  stand,  (c)  1 

And  among  those  about  to  become  partners,  and  who  have  ceased 
to  be  partners. — This  obligation  to  perfect  fairness  and  good  faith  is, 
moreover,  not  confined  to  persons  who  actually  are  partners.  It 
extends  to  persons  negotiating  for  a  partnership,  but  between  whom 
no  partnership  as  yet  exists ;  (d)  2  and  also  to  persons  who  have 
dissolved  partnership,  but  who  have  not  completely  wound  up  and 
settled  the  partnership  affairs ;  (e)  and  most  especially  is  good  faith 
^„„  .-]  required  to  be  observed  when  one  ^partner  is  endeavoring 
to  get  rid  of  another,  or  to  buy  him  out.  (/)  3 

(c)  See  Maddeford  v.  Aiistwick,  1  partner,  there  is  no  confidential  relation 
Sim.  89.  between  the   parties  until   the  partner- 

1.  High  standard  of  honor  among  ship  is  formed.  In  such  a  case,  it  is  not 
partners. — Where  one  partner,  who  is  improper  to  put  in  the  stock  and  ma- 
in sound  health,  was  made  sole  agent  of  chinery  of  the  old  business,  at  a  price 
the  partnership,  by  another  who  was  fixed  arbitrarily  between  the  parties, 
not,  and  who  relied  on  him  wholly  for  as  one  of  the  conditions  of  the  new 
true  accounts,  and  the  party  thus  made  arrangement.  Uhler  v.  Semple,  5  C.  E. 
agent  managed  the  business  at  a  distance  Gr.  (N.  J.)  288. 

from  the  other,  communicating  to  him  (e)  See  Lees  t;.  Laforest,  14  Beav.  250; 

no  information — Held,  that  the  relation  Clegg  v.  Fishwick,   1  Macn.  &  G.  294  ; 

of  partnersliip,  whatever  it  may  be  in  Perens   v.   Johnson,    3   Sm.  &  G.  419; 

general,    became,    under    such    circum-  Clements  r.  Hall,  2  De  G.  &  J.  173. 

Btances,  fiduciary,  and  the  law  govern-  (/)  Blisset  v.  Daniel,  10  Hare  493 ; 

ing    fiduciary  relations  was   applicable.  Maddeford  v.  Austwick,  1  Sm.  89 ;  Perens 

Brooks  V.  Martin,  2  Wall.  (U.  S.)  70.  v.  Johnson,  3  Sm.  &  G.  419;  Chandler 

A  and  B  being  partners.  A,  without  v.  Dorsett,  Finch  431.     As  to  wilhhold- 

the  consent  of  B,  borrowed  money  at  an  ing  information,  see  McLure  v.  Ripley,  2 

extra  rate  of  interest,  on  the  credit  of  Macn.  &  G.  274. 

the  company,  to  pay  his  private  debts,  3.    And    among    those    who    have 

and    credited    the    company    with    the  ceased   to  be  partners.  —  Partners  are 

money  so  applied  and  the  legal  interest  quasi  trustees  for  one  another,  even  after 

only.     Held,  that  the  excess  of  interest  dissolution  ;  if  one  retires,  or  becomes 

thus  paid  by  the  company  beyond  the  bankrupt,  or  dies,  that  one's  representa- 

amount  credited  to  the  company  was  a  tives  and  the  other  partners  still  remain 

proper  charge  against  A.     Tomlinson  v.  quasi,  trustees.     Hoyt  v.  Sprague,  8  Rep. 

Ward,  2  Conn.  396.  616. 

(d)  See  Hichens  v.  Congreve,  1  Russ.  &  After  dissolution,  each  partner  becomes 
M.  150  ;  Fawcett  v.  Whitehonse,  Id.  132.  a  trustee  for  the  others  as  to  the  partner- 

2.  And  among  those  about  to  be-  sliip  funds  in  his  hands,  in  order  to  effect 
come  partners. — In  the  negotiations  a  fair  settlement  and  just  distribution  of 
preliminary  to  the  taking  in  of  a  new    the  effects,  and  he  will  not  be  allowed  to 

511 


304^ 


DUTY    TO    OBSERVE    GOOD    FAITH.  [bOOK    III., 


Each  must  do  his  duty. — Notwithstanding  the  universal  appli- 
cation to  partners,  of  tiie  rule  requii-ing  perfect  good  faith,  if  one 
partner  repudiates  the  contract  of  partnershi{)  and  will  not  perform 


make  a  bargain  with  his  former  copart- 
ners advantageous  to  himself;  but  before 
dissolution  no  such  relationship  exists. 
Stephens  v.  Orman,  10  Fla.  9. 

After  dissohition,  equity  will  restrain 
one  partner  from  publishing  the  letters 
of  another  concerning  the  business  of 
the  firm,  unless  the  purposes  of  justice, 
civil  or  criminal,  require  their  publica- 
tion.    Roberts  v.  McKee,  29  Ga.  161. 

The  remaining  partners,  after  a  disso- 
lution, are  entitled  to  the  possession  of 
the  effects  for  the  purpose  of  settling  up 
the  concern,  and  without  interference, 
unless  for  good  cause  shown,  on  the  part 
of  strangers  who  may  have  purchased 
the  shares  of  retiring  partners.  Reece 
V.  Hoyt,  4  Ind.  169. 

That  upon  a  dissolution  the  partners 
settled  on  the  hypothesis  that  a  firm 
debt  was  settled  by  the  note  of  one,  is 
not  to  be  presumed,  but  is  for  the  jury 
to  decide.     Tyner  v.  Stoops,  11  Ind.  22. 

A  partner,  on  dissolution,  appointed 
agent  and  receiver,  altiiough  he  have  an 
interest,  is  only  trustee  for  the  other 
partners.  Honore  v.  Colmesnil,  1  J.  J. 
Marsh.  (Ky.)  506. 

After  dissolution  and  an  assignment 
by  one  partner  to  th-e  other  of  all  his 
interest  in  the  book  debts  and  demands 
of  the  firm,  with  power  to  collect  them 
for  his  own  benefit,  an  attempt  by  the 
partner  so  assigning  to  control  one  of 
those  demands  against  himself,  and  to 
direct  that  it  should  not  be  allowed  in 
set-off,  can  have  no  effect.  Davis  v. 
Briggs,  39  Me.  304. 

Where  the  articles  of  copartnership 
provide  that  on  dissolution  of  the  co- 
partnership, its  effects  shall  be  divided 
among  the  partners,  the  partners  become. 


on  such  dissolution,  merely  tenants  in 
common,  and  no  one  of  them  can  set  off 
or  sell  the  share  of  the  other  without 
his  consent.  Phillips  v.  Reeder,  3  C.  E. 
Gr.  (N.  J.)  95. 

If,  after  dissolution,  either  party  con- 
tinues the  use  of  the  partnership  prop- 
erty, he  may  be  required  to  account  for 
such  use,  although  it  was  only  a  partner- 
ship in  proceeds,  and  not  in  the  stock. 
Pine  V.  Ormsbee,  2  Abb.  (N.  Y.)  Pr.  (N. 
S.)  375. 

There  is  nothing  in  the  relation  of 
partners  which  makes  a  mortgage,  given 
by  one  to  the  other  on  dissolution  of  the 
partnership,  to  indemnify  him  against 
the  partnership  debts,  fraudulent.  Whit- 
more  V.  Parks,  3  Humph.  (Tenn.)  95. 

After  the  dissolution  of  a  firm,  one  of 
its  members  cannot  act  as  the  agent  of  a 
creditor  of  the  firm,  in  holding  obliga- 
tions due  the  firm,  as  collateral  security 
for  a  note  due  from  the  firm  to  such 
creditor,  and  taking  a  conveyance  of 
land  in  settlement  of  such  an  obligation  ; 
and,  in  such  a  case,  the  creditor,  in  an 
action  on  the  firm  note,  is  not  bound  to 
account  for  the  value  of  such  land,  or  of 
such  alleged  collaterals,  where  it  appears 
they  were  never  in  his  possession,  that 
he  never  authorized  such  alleged  agent 
to  hold  them  for  him,  and  never  received 
any  payments  thereon,  and  that  the  land 
was  not  conveyed  to  him,  but  to  such 
alleged  agent.  Pray  v.  Morse,  41  Wis. 
343. 

The  relation  of  trustees  towards  each 
other,  if  it  exists  during  partnership, 
certainly  ceases,  in  Illinois,  when  the 
firm  is  dissolved  and  the  business  is 
closed.  Pierce  v.  McClellan,  93  111.  245. 
And,  in  Massachusetts,  a  partner  is  no 


512 


CHAP.  II.,  §  I.]    DUTY    TO    OBSERVE    GOOD    FAITH. 


304* 


his  duty  towards  his  copartners,  he  cannot  justly  complain  if  they 
in  return  decline  to  treat  him  on  a  footing  of  equality  with  them- 
selves, [g)  A.S  observed  by  Lord  Eldon,  in  Const  v.  Harris  :  "  A 
partner  who  complains  that  the  other  partners  do  not  do  their  duty 
towards  him  must  be  ready  at  all  times  and  offer  himself  to  do  his 
duty  towards  them." (A)  But  if  a  partner  has  been  set  at  defiance 
by  his  copartners,  if  they  have  denied  that  he  is  a  partner,  and  that 
he  has  any  right  to  interfere  in  the  partnership,  they  can  derive  no 
advantage  from  the  circumstance  that  he  has  not  performed  his  duty 
to  them,  {i) 

A  partner  whose  rights  are  denied  should  be  prompt  in  asserting 
them,  or  he  may  be  seriously  prejudiced.  This  subject  mhII  be 
further  adverted  to  in  that  part  of  the  work  which  relates  to  the 
defences  to  actions  between  partners,  (k)  4 


longer  a  trustee  for  his  partner  after  the 
partnership  was  dissolved,  and  an  insur- 
ance broker  ceases  to  be  trustee  for  the 
underwriters  when  he  leaves  his  ofiBce  ; 
and  a  settlement  by  such  a  party,  with 
the  administrators  of  his  former  princi- 
pal or  partner,  will  be  sustained  if  it  is 
not  actually  or  constructively  fraudu- 
lent, although  advantageous  to  the  party ; 
and  in  this  he  differs  from  one  who  is 
strictly  a  trustee,  such  a  one  being 
scarcely  allowed  to  purchase  at  all  of 
his  cestui  que  trust.  Farman  v.  Brooks, 
9  Pick.  (Mass.)  212. 

Illustrations. — Where  one  of  two  co- 
partners sold  out  his  interest  in  the  co- 
partnership assets  to  the  other,  taking 
back  an  agreement  that  the  purchaser 
would  pay  the  partnership  debts,  and 
the  latter,  instead  of  paying  them,  caused 
them  to  be  brought  up  in  the  name  of  a 
confederate,  and  judgment  to  be  obtained 
thereon,  on  which  the  lands  of  the  other 
copartner  were  sold  to  such  confederate, 
it  was  held  that  those  sales  should  be  set 
aside  as  fraudulent  and  void,  on  behalf 
of  one  to  whom  the  owner  had  conveyed 
the  lands,  and  that  it  was  not  necessary 


for  the  complainant  to  show  that  he  had 
purchased  and  paid  a  valuable  consid- 
eration for  the  lands.  Reed  v.  Wessel,  7 
Mich.  139. 

On  giving  up  the  business,  one  partner 
sold  property  of  the  firm  and  rendered 
an  account  for  the  same  at  $4000.  He 
had  sold  the  property  to  another,  to  re- 
sell, and  divide  the  profits  with  him,  and 
the  profits  were  actually  divided  between 
him  and  such  other  person.  Held,  that 
such  partner  must  account  for  the  profits 
of  the  resale.  Mathewson  v.  Allen,  10 
R.  I.  156. 

(g)  See  McLure  ■;;.  Ripley,  2  Macn.  & 
G.  274;   Reilly  v.  Walsh,  11  Ir.  Eq.  22. 

(h)  Turn.  &  R.  524. 

(i)  See  Dale  v.  Hamilton,  2  Ph.  276. 

(k)  Infra,  ch.  10,  §  3. 

4.  Each  must  do  his  duty. — In  an 
action  against  a  partnership,  if  process 
be  served  on  one  partner,  and  judgment 
recovered,  and  execution  levied  on  the 
partnership  properly,  it  is  the  duty  of 
such  partner  to  give  notice  of  it  to  his 
copartners,  and  a  neglect  to  do  so  sub- 
jects him  to  an  action.  Devall  v.  Bur- 
bridge,  6  Watts  &  S.  (Pa.)  529. 


513 


33 


304*  DUTY  TO   OBSERVE   GOOD   FAITH.  [bOOK   III., 

Principle  of  r/ood  faith  the  basis  of  the  internal  law  of  partnership. 
— The  foregoing  general  principles  may  be  regarded  as  the  basis  of 
the  law  of  partnership,  so  far  as  it  relates  to  the  rights  and  obliga- 
tions of  partners  as  between  themseh^es,  and  they  will  be  found  to 
be  more  or  less  illustrated  throughout  the  whole  of  the  present  book. 
Those  cases,  however,  which  more  especially  relate  to  the  obligation 
of  partners  not  to  benefit  themselves  at  the  expense  of  their  copart- 
ners and  to  the  riglits  of  majorities,  require  to  be  specially  noticed.  5 


♦section    II, — OF    THE    OBLIGATION    OF    PARTNERS    NOT    r-^nr^c 

*<305 
TO     BENEFIT     THEMSELVES     AT     THE     EXPENSE     OF 

THEIR    COPARTNERS. 

No  partner  allowed  to  benefit  himself  at  the  expense  of  the  firm. — 
Good  faith  requires  that  a  partner  shall  not  obtain  a  private  advant- 
age at  the  expense  of  the  firm.  He  is  bound,  in  all  transactions 
affecting  the  partnership,  to  do  his  best  for  the  common  body,  and 

One  parmer  is  not  entitled  to  compen-  be  charged,  of  course  interest  upon  com- 
sation  from  the  partnersliip  for  his  mission  cannot  be  charged.  The  court 
services  in  attending  to  the  partnership  will,  therefore,  refer  it  back  to  the  court 
affairs,  unless  there  is  a  contract  therefor,  below,  with  a  declaration  that  no  corn- 
express  or  implied.  Gaston  v.  Kellogg  mission  could  be  charged,  either  for  the 
(Mo.),  3  S.  W.  Hep.  589.  collection  of  the  debts  of  first  or  second 

In  Whittle  v.  M'Farlane  (1  Knapp  partnership." 
311)  the  Master  of  the  Eolls  (Sir  John  5.  Principle  of  good  faith  the  basis 
Leach)  said :  "  It  is  impossible  to  main-  of  the  internal  law  of  partnership.— 
tain  the  charge  for  commission,  because  In  determining  the  respective  rights  of 
it  is  in  truth  a  charge  by  a  partner  for  partners  in  a  firm,  it  is  proper  to  con- 
the  collection  of  a  partnership  debt,  sider,  not  only  their  original  agreement, 
How  can  a  partner  charge  commission  but  also  the  manner  in  which  the  books 
against  a  partner  for  th-e  collection  of  a  of  the  firm  were  kept.  Alterations  or 
partnership  debt,  in  which  both  of  them  constructions  made  or  put  on  their  part- 
are  interested  ?  It  is  a  misapprehension  nership  transactions,  and  acquiesced  in 
entirely,  and  there  does  not  appear  any  by  all  of  them  for  many  years,  should 
pretence  for  saying  that  there  is  any  have  great  weight  in  ascertaining  the 
local  usage  in  the  island  to  sanction  equities  between  them.  Southmayd'a 
such  a  charge.     If  commission  cannot  Appeal  (Pa.),  8  ki\.  Rep.  72. 

514 


CHAP.  II.,  §  II.]    BENEFIT   OBTAINED   BELONGS   TO   FIRM.  305* 


to  share  with  his  copartners  any  benefit  which  he  may  have  been 
able  to  obtain  from  other  people,  and  in  which  the  firm  is  in  honor 
and  conscience  entitled  to  participate.  Semper  enim  non  id  quod 
privatim  interest  unius  ex  sociis  servari  solet,  sed  quod  societati 
expedit.  (I) 

There  are  two  modes  in  whicli,  more  especially,  partners  attempt 
unfairly  to  acquire  gain  at  the  expense  of  their  copartners,  viz. : 
first,  by  directly  making;  a  profit  out  of  them;  and,  second,  by 
appropriating  to  themselves  benefits  which  they  ought  to  have 
acquired,  if  at  all,  for  the  common  advantage  of  the  firm.6  It  will 
be  convenient  to  advert  to  each  of  these  modes  in  turn. 


(I)  Dig.  XVII.,  tit.  2,  pro  socio,  1.  65, 

6.  No  partner  allowed  to  benefit 
himself  at  expense  of  firm. — A  gen- 
eral rule  of  partnership  law  requires 
that  each  partner  shall  devote  his  time, 
labor  and  skill  to  the  benefit  of  the  firm, 
and  not  of  himself,  and  that  he  shall  not 
purchase  for  his  own  use  articles  in 
which  the  firm  necessarily  deals.  If  he 
does  so,  it  is  at  the  risk  of  having  the 
articles  so  purchased,  and  the  profits 
arising  therefrom,  claimed  by  the  firm 
as  belonging  to  it.  American  Bank 
Note  Co.  V.  Edson,  56  Barb.  (N.  Y.)  84  ; 
S.  C,  1  Lans.  388.  To  the  same  gen- 
eral effect,  see  Anderson  v.  Whitlock,  2 
Bush  (Ky.)  398  ;  Bart's  Appeal,  70  Pa. 
St.  301 ;  Coursen's  Appeal,  79  Pa.  St. 
220  ;  Eason  v.  Cherry,  6  Jones  (N.  C.) 
Eq.  261  ;  Gray  v.  Portland  Bank,  3  Mass. 
364 ;  Herrick  v.  Ames,  8  Bosw.  (N.  Y.) 
115;  Lane  v.  Carpenter,  30  Ind.  284; 
Lockwood  V.  Beckwith,  6  Mich.  168  ; 
Lowry  v.  Cobb,  9  La.  Ann.  592;  Scruggs 
V  Eussell,  McCahon  (U.  S.)  39;  Solo- 
mon V.  Solomon,  2  Ga.  18  ;  Stoughton  v. 
Lynch,  1  Johns.  (N.  Y.)  Ch.  467 ;  S.  C, 
2  Id.  209  ;  Todd  v.  Rafferty,  3  Stew.  (N. 
J.)  254. 

One  partner  cannot  purchase  an  out- 
standing note  of  the  firm  and  enforce  the 


same  against  it.  Easton  v.  Strother,  51 
Iowa  506.  But  the  purchase  with  his 
own  funds,  by  one  partner,  outside  of  the 
firm  business,  of  a  judgment  against  his 
copartner,  is  not  improper,  and  the  col- 
lection thereof  may  be  enforced  by  levy 
and  sale  of  the  interest  of  the  judgment 
debtor  in  the  firm  assets.  McKenzie  v. 
Dickinson,  43  Cal.  119. 

A  judgment  upon  a  warrant  of  attor- 
ney, given  to  one  member  of  a  partner- 
ship to  secure  a  debt  due  the  partner- 
ship, will  be  held  by  him  as  trustee  for 
the  benefit  of  the  firm,  and  payment  of 
the  judgment  will  satisfy  the  partnership 
debt.  Chapin  v.  Clemitson,  1  Barb.  (N. 
Y.)  311. 

If  one  partner  purchase  land  to  his 
own  use  with  money  taken  out  of  the 
joint  fund,  the  lands  will  not  be  joint 
stock.  Goodwin  v.  Richardson,  11  Mass. 
469  ;  Pitts  v.  Waugh,  4  Id.  424.  Contra, 
Kayser  v.  Maugham,  8  Colo.  339. 

Commercial  partners  who  have  come 
into  possession  of  property  belonging  to 
the  minor  heir  of  a  former  partner,  have 
no  legal  right  to  administer  it  for  the 
benefit  of  the  minor,  and  if  they  do, 
they  become  bound  in  solido  for  the  prop- 
erty.    Fitz  v.  Reichard,  20  La.  Ann.  549. 

If  a  member  of  a  partnership  enters 
into   a   transaction   in  his  own  behalf, 


515 


305*  DUTY   TO    OBSERVE   GOOD    FAITH.  [bOOK    III., 

1.  Deriving  profit  from  dealings  loith  the  firm — sale  to  firm. — lu 
the  first  place,  then,  it  may  be  laid  down  as  a  general  rule  that  one 
partner  is  not  allowed  to  derive  profit,  at  the  expense  of  the  firm, 

which  is  within  the  scope  of  the  partner-  sponsibility.  The  payment,  incidentally, 
ship  business,  his  copartner  may  claim  out  of  those  funds,  of  an  instalment  due 
the  benefits  resulting  from  it ;  this  right  upon  an  antecedent  contract  on  indi- 
beloQgs  to  tlie  partner  alone  ;  third  par-  vidual  responsibility,  does  not  raise  such 
ties  cannot  avail  tiiemselves  of  it,  when  a  trust,  or  give  title  to  anything  but  re- 
no  such  claim  has  been  asserted,  to  fix  imbursement.  Wheatly  v.  Calhoun,  12 
a  liability  on  the  partnership.  Lock-  Leigh  (Va.)  264. 
wood  V.  Beckwith,  G  Mich.  168.  One  partner  will   not   be  allowed  to 

Where  one  partner  expends  the  part-  stipulate,  clandestinely,  for  a  private 
nership  funds  in  the  purchase  of  prop-  advantage  or  benefit  to  himself,  to  the 
erty  in  his  own  name,  he  will  hold  the  exclusion  of  his  partners,  in  matters  in 
same  in  trust  for  the  partnership.  Evans  which  he  has  been  dealing  on  behalf  of 
V.  Gibson,  29  Mo.  223  ;  Smith  v.  Kamsey,  the  firm.  And  though  the  articles  al- 
6  111.  (1  Gilm.)  373;  Coder  i).  Huling,  low  ii  dissolution  at  the  will  of  either 
27  Pa.  St.  84  ;  Keeley  v.  Greenieaf,  3  partner,  yet  a  partner  will  not  be  al- 
Story  (U.S.)  93;  Croughton  v.  Forrest,  lowed,  in  equity,  to  dissolve  the  firm 
17  Miss.  131.  for  the  purpose  of  securing  to  himself 

Where  one  of  three  partners  refuses  to  an  advantage  which  he  has  gained  in 
pay  over  a  sum  of  money  claimed  by  such  dealing ;  but  the  other  partners 
each  of  the  others,  he  cannot  resist  the  may  enforce  a  right  to  participate  in 
payment  of  interest  thereon,  if  it  ap-  the  benefit  on  contributing  to  the  ex- 
pears  that,  pending  the  adjustment  of  pense.  McMahon  v.  McCleman,  10  W. 
the  claim,  he  had  used  the  money  for    Va.  419. 

his  own  purposes.     Coddington  v.  Idell,        Where  one  partner,  by  a  secret  trans- 
3  Stew.  (N.  J.)  540.  action  within  the  scope  of  the  business 

If  two  persons  agree  to  divide  the  of  the  firm,  obtains  a  private  benefit  to 
profits  of  a  certain  transaction,  it  is  fraud  the  injury  of  the  firm,  he  will  be  com- 
for  one  to  receive  any  commissions  pelled  to  account  therefor.  Tolan  v. 
thereon  from  third  parties,  apart  from  Carr,  19  N.  Y.  Week.  Dig.  484. 
joint  profits.  Dunlop  v.  Richards,  2  E.  One  partner  cannot  claim  a  share  in 
D.  Smith  (N.  Y.)  181.  the  fees  received  by  the  other  a.s  admin- 

An  actual  breach  of  the  articles  by  istrator,  merely  because  the  other  is 
one  partner  may  sometimes  be  aflirmed  shown  to  have  intended  to  share  such 
by  the  others,  who  may  demand  an  ac-  fees  with  him.  King  v.  Whiten,  15 
connting  and  share  in  the  benefits  de-    Wis.  684. 

rived    from    such    breach.      Moritz    v.        Illustrations. — Where  a  firm  whose 
Phelps,  4  E.  D.  Smith  (N.  Y.)  135.  business  was  "a  general  produce  busi- 

In  order  to  raise  an  implied  trust  in  ness,  held  a  mortgage  on  real  estate,, 
favor  of  the  partnership  by  a  joint  pur-  which  real  estate  itself  the  firm  was  de- 
chase  of  real  property,  the  purchase  sirous  to  purchase  under  the  mortgage, 
must  have  been  made  at  the  time  with  and  entrusted  the  subject  generally  to 
partnership  funds,  or  on  partnership  re-    one  of  the  firm — Held,  that  the  legal  ob- 

516 


CHAP.  II.,  §  II.]    BENEFIT   OBTAINED    BELONGS   TO    FIRM.  305* 

from  any  dealings  between  him  and  the  partnership,  unless  it  is 
clearly  agreed  that  he  is  to  have  such  profit.  For  example,  if  a 
partner  is  buying  or  selling  for  a  firm,  he  cannot  sell  to  it  or  buy 
from  it  at  a  profit  to  himself. 

ligation  of  the  partner  entrusted  being  S.  was  to  liave  four-tenths,  T.  three- 
only  to  get  payment  of  the  mortgage,  he  tenths  and  B.  three-tenths  ;  and,  after  a 
might  make  an  arrangement  for  his  own  portion  of  the  land  was  sold,  and  the 
•benefit  with  a  third  person,  without  the  purchase  money  and  costs  and  expenses 
knowledge  of  his  partners,  by  which  paid,  T.  and  B.  terminated  the  copart- 
such  third  person  should  buy  the  estate,  nership,  refused  to  sell  any  more  land, 
giving  him,  the  entrusted  partner,  an  and  refused  to  permit  S.  to  have  any  fur- 
interest  in  it ;  and  if  the  mortgage  debt  ther  connection  therewith — Held,  that 
was  fully  paid  into  the  firm  account,  when  the  deed  was  executed  to  B.  he 
that  there  was  no  breach  of  partnership  held  the  property  in  trust  for  the  co- 
or  other  fiduciary  relation  in  the  trans-  partnership ;  and,  afterwards,  when  the 
action ;  or,  at  least,  that  no  .other  part-  copartnership  was  terminated,  he  held 
ner  could  recover  from  him  a  share  of  it  in  trust  for  the  individual  members 
profits  made  by  a  sale  of  the  real  estate  ;  of  the  copartnership,  S.  being  entitled 
all  partners  alike  having  been  origin-  to  four-tenths  thereof.  Tenney  v.  Simp- 
ally  engaged  in  a  scheme  to  get  the  real  son  (Kan.),  15  Pac.  Kep.  187. 
estate  by  depreciating  its  value ;  by  en-  The  plaintifi"  and  defendant,  being 
tering  a  judgment  for  a  large  nominal  part  owners  of  a  vessel,  of  which  the 
amount  and  by  deceiving  or  "bluffing  defendant  was  master,  and  being  jointly 
ofi""  other  creditors.  Wheeler  v.  Sage,  concerned  in  a  whaling  voyage  under- 
1  Wall.  (U.  S ,)  518.  taken  by  such  vessel,  the  defendant,  in 

Where  S.,  having  the  exclusive  right,  the  course  of  the  voyage,  landed  some 
by  previous  written  agreement  with  the  prisoners  from  a  privateer,  and  also 
owner  of  a  certain  piece  of  land,  to  pur-  saved  some  articles  from  a  wreck,  for 
chase  the  same,  entered  into  a  parol  each  of  which  services  he  received  a 
agreement  with  T.  and  B.,  in  pursuance  compensation.  On  his  return  he  settled 
of  which  B.  furnished  the  purchase  up  the  voyage,  but  without  rendering 
money  for  the  land,  T.  gave  his  notes  any  account  of  these  two  items  of  com- 
therefor  to  B.,  and  the  deed,  by  consent  pensation.  Held,  that  the  plaintiff 
of  the  parties,  was  executed  by  the  might  recover  her  proportion  of  the 
owner  to  B.  as  a  security  for  the  repay-  same  in  assumpsit.  Fanning  v.  Chad- 
ment  of  the  purchase  money  to  B.,  and  wick,  3  Pick.  (Mass.)  420. 
the  land  was  purchased  by  S.,  T.  and  B.  Evidence  that  the  defendant  made 
on  speculation,  and  for  the  purpose  of  $2100  during  six  months  that  he  kept  a 
sale  and  profits  only,  and  not  for  perma-  boarding-house  alone,  and  that  the  ex- 
nent  use ;  and,  after  the  payment  of  the  penses  were  more  and  the  receipts  less 
purchase  money  and  of  the  costs  and  ex-  than  when  it  was  kept  by  the  plaintiff 
penses  out  of  the  proceeds  of  the  sale,  and  himself  together,  was  held  not  to  be 
the  profits  were  to  be  divided  between  admissible  to  prove  that  the  plaintiff  was 
the  partners,  S.,  T.  and  B.,  as  follows  :    guilty  of  a  fraud  in  returning  a  less  sum 

517 


305*  DUTY   TO    OBSERVE    GOOD    FAITH.  [bOOK    III., 

In  Bentley  v.  Craven  (m)  one  of  the  several  partners  was  era- 
ployed  to  purchase  goods  for  the  firm.  He,  unknown  to  his  co- 
partners, supplied  thera,  at  the  market  price,  with  goods  previously 
bought  by  himself  when  the  price  was  lower,  and  h-e  so  made  a 
considerable  profit.  But  it  was  held  that  the  transaction  could  not 
be  sustained,  and  that  he  was  accountable  to  the  firm  for  the  profit 
thus  made.  The  Master  of  the  Eolls,  in  delivering  judgment, 
observed:  "The  case  is  this:  Four  partners  established  a  partner- 
ship for  refining  sugar ;  one  of  them  is  a  wholesale  grocer,  and  from 
his  business  is  peculiarly  cognizant  with  the  variations  in  the  sugar 
market,  and  has  great  skill  in  buying  sugar  at  a  right  and  proper 
time  for  the  business.  Accordingly  the  business  of  selecting  and 
^  pur*chasing  the  sugar  for  the  sugar  refinery  is  entrusted  to 

-■  him.  He  being  the  person  to  buy,  it  is  his  duty  and  busi- 
ness to  employ  his  skill  in  buying  for  the  sugar  refinery  at  the  time 
he  thinks  most  beneficial.  Having,  according  to  his  skill  and 
knowledge,  bought  sugar  at  a  time  when  he  thought  it  likely  to 

as  the  profits  for  six  months  in  which  it  ting  and  conveying  to  market  pine  tim- 
was  kept  by  them  together.  Thayer  v.  her,  and  all  the  pine  timber  upon  certain 
Barney,  12  Minn.  502.  lots  of  land  was  purchased,  in  the  name 
A  member  of  an  insolvent  firm,  while  of  one  member  of  the  firm,  for  the  benefit 
acting  as  agent  for  the  creditors,  in  the  of  the  firm,  and  paid  for  from  the  property 
settlement  of  the  partnership  affairs,  of  the  firm,  and  the  contract  contained  a 
assisted  another  party  to  purchase  from  provision  that  the  timber  should  be  cut 
the  creditors  their  claims,  together  with  and  taken  from  the  land  by  a  time 
their  rights  to  certain  pledged  assets  of  specified,  which  was  not  done,  but  the 
the  firm.  Held,  that  the  purchase  did  owner  of  the  land  did  not  insist  upon 
not  enure  to  the  benefit  of  the  firm,  and  any  forfeiture,  but  subsequently  con- 
that  the  transaction  did  not  come  within  veyed  the  land,  for  the  mere  price  of  the 
the  operation  of  the  general  rule  of  land  exclusive  of  the  timber,  to  the 
equity,  that  a  trustee  cannot  buy  trust  member  of  the  firm  with  whom  the 
property  for  himself,  or  act  as  agent  in  original  contract  was  made,  it  was  held 
buying  it  for  another  person.  Westcott  that  the  timber  remaining  upon  the 
V.  Tyson,  38  Pa.  St.  389.  land  still  continued  the  property  of  the 

A  conveyance  of  real  estate  to  "J.  L.  firm   and  that  the  avails  of  timber  sub- 

S.  &  Co."  vests  the  legal  title  in  J.  L.  S.  sequently  cut  upon  the  land  by  the  one 

individually,  clothed,  however,  with  a  who  made  the   purchase,  exclusive  of 

trust  for  the  benefit  of  the  partnership,  expenses,  must  be  accounted  for  by  him 

Moreau  v.  Safiarans,  3  Sneed  (Tenn.)  595.  as  firm  assets.     Washburn  v.  Washburn, 

Where  a  partnership  was  formed  by  23  Vl.  577. 
two  individuals  for  the  purpose  of  cut-        (m)   18  Beav.  75. 

518 


CHAP.  II.,  §  II.]    BENEFIT   OBTAINED    BELONGS   TO    FIRM.  306* 

rise,  and  it  having  risen,  and  the  firm  being  in  want  of  some,  he 
sells  his  own  sugars  to  the  firm  without  letting  the  partners  know 
that  it  was  his  sugar  that  was  sold."  Being  the  agent  for  the  firm 
for  buying  sugars,  he  sold  his  own  sugars  to  the  firm,  and  made  a 
profit,  and  the  firm  was  held  entitled  to  that  profit  accordingly.  7 

Purchase  from  firm. — In  Dunne  v.  English  (u)  the  plaintiff  and 
the  defendant  had  agreed  to  buy  a  mine  for  £50,000,  with  a  view 
to  resell  it  at  a  profit.  It  was  ultimately  arranged  that  the  de- 
fendant should  sell  it  to  certain  persons  for  £60,000,  and  that  the 
profit  of  £10,000  should  be  equally  divided  between  the  plaintiff 
and  the  defendant.  The  defendant,  however,  in  fact  sold  the  mine 
for  much  more  than  £60,000  to  a  company  in  which  he  himself 
had  a  large  interest.  The  plaintiff  was  held  entitled  to  one-half 
of  the  whole  profit  made  by  the  resale.8 

7.  Deriving  profits  from  dealings  the  due  discharge  of  that  trust  or  confi- 
with  the  firm— sale  to  firm. — The  rule  dence.  The  defendant  here  stood  in  re- 
permitting  one  partner  to  sell  the  firm  lation  of  trust  or  confidence  towards  the 
property  and  give  a  good  title  to  a  plaintiff,  which  made  it  his  duty  to  pur- 
stranger,  does  not  empower  him  to  sell  to  chase  the  lapis  calaminaris  at  the  lowest 
himself.  Such  a  sale  is  simply  void,  no  possible  price;  when  in  the  place  of 
right  or  interest  passing ;  both  the  legal  purchasing  the  lapis  calaminaris,  he  ob- 
and  equitable  title  remaining  as  before,  tained  it  by  barter  for  his  own  shop 
Comstock  V.  Buchanan,  57  Barb.  (N.  Y.)  goods,  he  had  a  bias  against  a  fair  dis- 
127  ;  Nelson  v.  Hayner,  66  111.  487.  charge  of  his  duty  to  the  plaintiff.     The 

A  property  owner  may  form  an  asso-  more  goods  he  gave  in  barter  for  the 
elation  or  partnership  with  others  and  article  purchased,  the  greater  was  the 
sell  the  property  to  them  at  any  agreed  profit  which  he  derived  from  the  deal- 
price,  without  giving  rise  to  any  confi-  ings  in  store  goods ;  and  as  this  profit 
dential  relation  or  necessitating  any  ac-  belonged  to  him  individually,  and  as 
count  of  profits  realized  on  such  sale,  the  saving  by  a  low  price  of  the  article 
provided  there  be  no  fraudulent  repre-  purchased  was  to  be  equally  divided 
sentations  made  at  the  time.  Densmore  between  him  and  the  plaintiff,  he  had 
Oil  Co.  V.  Densmore,  64  Pa.  St.  43  ;  S.  C.  plainly  a  bias  against  the  due  discharge 
9  Am.  L.  Reg.  (N.  S.)  96.  of  his  trust  or  confidence  towards  the 

InBurtonv.Wookey  (6Madd.  367)Sir  plaintiff.     I   must   therefore  decree   an 

John  Leach,  the  Vice  Chancellor,  said  :  account  of  the  profit  made  by  the  defend- 

"  It  is  a  maxim  of  the  courts  of  equity  ant  in  his  barter  of  goods,  and  must  de- 

that  a  person  who  stands  in  the  relation  clare  that  the  plaintiff  is  entitled  to  an 

of  trust  or  confidence  to  another  shall  equal   division  of  that  profit  with   the 

not  be  permitted,  in  pursuit  of  his  pri-  defendant." 
vate  advantage,  to   place  himself  in  a        {n)  18  Eq.  524. 

situation  which  gives  him  a  bias  against       8.  Purchase  from  the  firm.— In  Cali- 

519 


306= 


DUTY   TO   OBSERVE   GOOD   FAITH.  [bOOK    III., 


Full  disclosure  necessary. — There  was  in  this  case  some  evidence 
that  the  plaintiff  kiiew  that  the  defendant  had  some  interest  in  the 
purchase  beyond  his  share  of  th-e  known  profit  of  £10,000 ;  but 
the  plaintiff  did  not  know  what  that  interest  was,  and  the  real 
truth  was  concealed  from  him.  It  was  held  that  the  defendant 
being  the  plaintiff's  partner,  and  expressly  entrusted  with  the 
conduct  of  the  sale,  was  bound  fully  to  disclose  the  real  facts  to 
the  plaintiff,  and  not  having  done  so,  could  not  exclude  him  from 
his  share  of  the  profits  which  the  defendant  realized  by  the  sale,  (o)  9 

Authority  to  sell  at  a  given  price  no  waiver  of  share  of  higher 
price. — This  case  also  shows,  what  indeed  is  obvious  enough 
without  authority,  that  one  partner  who  authorizes  another  to  sell 
partnership  property  at  a  given   price  does  not   thereby  deprive 


fornia,  one  partner  naay  purchase,  on  liis 
own  account,  at  a  public  sale,  the  interest 
of  his  copartner  in  real  estate,  and  will 
hold  the  purchased  property  as  a  stranger 
might.  Bradbury  v.  Barnes,  19  Cal.  120. 
But  in  Kentucky,  on  a  sale  of  partner- 
ship land,  under  an  execution  against 
the  firm,  one  partner  cannot,  by  pur- 
chasing at  such  sale,  extinguish  the  title 
of  the  other  partner.  Farmer  v.  Samueh 
4  Litt.  (Ky.)  187.  But,  see,  Baird  v. 
Baird,  1  Dev.  &  B.  (N.  C.)  Eq.  524. 

If  a  partnership,  upon  its  dissolution, 
convey  all  its  effects  to  one  of  the  firm, 
and,  after  such  dissolution  and  transfer, 
a  debtor  of  the  firm  promise  to  pay  the 
individual  partner,  he  may  maintain  an 
action  in  his  own  name  on  the  promise. 
Howell  V.  Reynolds,  12  Ala.  12S. 

A  and  B  being  partners,  A,  under  a 
power  of  attorney  from  B,  executed  a 
bond  for  a  partnership  debt,  with  war- 
rant of  attorney  to  confess  judgment.  B 
afterwards  sold  land  bound  by  the  judg- 
ment, and,  upon  a  subsequent  dissolution 
of  the  partnership,  funds  were  deposited 
in  the  hands  of  A,  for  payment  of  the 
partnership  debts,  and  especially  of  the 
bond   aforesaid.     Judgment    was  subse- 


quently entered  upon  the  bond,  and  the 
land  sold  by  B  having  been  sold  upon 
an  execution  upon  the  judgment,  A  be- 
came the  purchaser.  Held,  that  his  pur- 
chase must  be  presumed  to  have  been 
made  with  the  partnership  funds,  and 
that  it  would  enure  to  the  benefit  of  B's 
grantee.  Swift  v.  Dean,  6  Johns.  (N.  Y.) 
522. 

(o)  See,  also.  Imp.  Merc.  Credit  Assoc. 
V.  Coleman,  L.  R.,  6  H.  L.  189. 

9.  Full  disclosure  necessary. — Per- 
sons who  have  formed,  or  are  dealing  in 
contemplation  of  forming,  an  association, 
stand  in  a  fiduciary  relation  to  each  other 
and  to  all  who  may  subsequently  become 
members.  They  cannot  purchase  prop- 
erty and  sell  it  to  the  company  at  an 
enhanced  price,  without  a  full  disclosure 
of  all  the  facts,  without  being  liable  to 
be  called  to  account  for  the  profits. 
Densmore  Oil  Co.  v.  Densmore,  64  Pa. 
St.  43  ;  S.  C,  9  Am.  L.  Reg.  (N.  S.)  96-. 

The  duty  of  one  partner  to  communi- 
cate to  his  copartner  information  re- 
ceived concerning  the  business  of  the 
firm  asserted  in  a  case  depending  upon 
particular  facts.  Sexton  v.  Sexton,  9 
Gratt.  (Va.)  204. 


520 


CHAP.  II.,  §  II.]    BENEFIT   OBTAINED    BELONGS   TO   FIRM.  306* 

himself  of  his  right  to  share  a  higher  price  if  a  higher  price 
should  be  realized,  (p) 

*2.    Obtaining  benefits  ivhich  in  honor  belong  to  the  firm.   p<,^^ 
— The  same  principles  apply  to  attempts  made  by  partners 
to  secure  for  themselves  benefits  which  it  was  their  duty  to  obtain, 
if  at  all,  for  the  firm  to  which  they  belong,  (q) 

Thus,  in  Carter  v.  Horne,(r)  the  plaintiff  and  the  defendant 
agreed  for  the  purchase  of  an  estate  in  moieties  between  them. 
The  estate  was  subject  to  several  encumbrances,  which  were  to  be 
discharged  out  of  the  purchase  money.  The  defendant  had  abate- 
ments made  to  him  by  some  of  the  encumbrancers  of  several  sums 
due  for  interest  and  otherwise,  which  they,  in  consideration  of 
services  and  friendship,  agreed  should  be  to  his  own  use.  How- 
ever, on  a  bill  brought  against  him  by  his  copurchaser  for  an 
account  of  the  rents  and  profits,  the  court  would  not  allow  the 
defendant  the  exclusive  benefit  of  these  abatements,  but  held  that 
he  must  account  for  them,  the  purchase  being  made  for  the  equal 
benefit  of  both  parties,  and  on  a  mutual  trust  between  them.lO 

(p)  See,  also,  Parker  v.  McKenna,  10  destinely  stipulate  for  a  private  benefit, 

Ch.  96,  and  De  Busche  v.  Alt,  8  Ch.  D.  he  will  be  compelled  to  share  it  with 

286 ;  and  see  Id.,  p.  317,  as  to  a  custom  his   associates.     But   from    this   rule   a 

authorizing  such  a  practice.  partner  may  be  excluded  by   his  own 

(q)  Parker  v.  Hills,   5  Jur.   (N.  S.)  inequitable  conduct.      Lowry  v.  Cobb,  9 

809,  is  not  opposed  to  these  cases,  for  La.  Ann.  592. 

there  the  money  was  paid  for  a  lease  Where  one  of  a  copartnership,  by  any 

which  was  held  to  belong  to  one  partner  means,  gets   a  fund   belonging   to   the 

QQJy  firm,  he  is  not  at  liberty  to  appropriate 

(r)  1  Eq.  Ab.  7.     See,  also,  De  Bus-  it  to  his  own  exclusive  benefit,  but  must 

sche  V.  Alt,  8  Ch.  D.  286 ;  Morison  v.  share  it  with  his  copartners.     Eason  v. 

Thompson,  L.  R.,  9  Q.  B.  480,  as  to  the  Cherry,  6  Jones  (N.  C.)  Eq.  261. 

right  of  a  principal  to  profits  made  by  One  of  two  partners  engaged  in  the 

his  agent  or  subagent.    Compare  Great  manufacture  and  sale  of  a  patented  arti- 

Western   Insur.  Co.  v.  Cunliffe,  9  Ch.  cle  cannot  take  an  assignment  from  a 

525,  and  Baring   v.  Stanton,   3  Ch.  D.  third  person  of  a  right  or  claim  as  in- 

502,  where  the  agent's  profits  were  part  ventor  of  such  patented  article,  and  set 

of  his  remuneration.  it  up  against  his  partner ;  especially  if 

10.    Obtaining    benefits    which    in  he  formed  the  partnership  with  knowl- 

honor  belong  to  firm.— A  partner  can-  edge  of  such  alleged  title.     Kinsman  v. 

not  prefer  his  own  interest  to  the  firm's,  Parkhurst,  18  How.  (U.  S.)  289. 

nor  deprive  it  of  a  profitable  bargain  by  Where  it  is  agreed  that  the  firm  shall 

taking  it  for  himself;  and  if  he  clan-  have  a  joint  right  in  certain  inventions, 

521 


307*  DUTY   TO   OBSERVE   GOOD    FAITH.  [bOOK    III.^ 

Renewing  leases — clandestine  renewal. — It  has  been  decided  more 
tbau  once  tliat  if  one  partner  obtains  in  his  own  name,  either  dur- 
ing the  partnership  or  before  its  assets  liave  been  sold,  a  renewal 

the  partner  to  whom  a  patent  for  one  of  Where  a  bil'l  is  filed  by  a  partner 
such  inventions  is  issued  cannot  claim  against  his  copartner  for  an  account, 
the  exclusive  benefit  thereof.  Burr  v.  and  one  of  the  partners  is  appointed  re- 
De  La  Vergne,  102  N.  Y.  415.  ceiver,  and  uses  the  money  received  as 

One  partner  who  buys  in  a  paramount  such  by  him,  on  which  he  makes  a 
or  outstanding  title  to  lands  belonging  profit,  the  other  partner  is  not  entitled 
to  the  firm,  does  so  in  behalf  of  all,  and  to  a  share  of  such  profits,  the  money  not 
the  other  partners,  on  contributing  to  being  held  as  partner,  but  as  receiver, 
the  price,  are  entitled  to  the  benefit  of  Whitesides  v.  Laflerty,  3  Humph, 
the    purchase.      Forrer    v.   Forrer,   29    (Tenn.)  150. 

Gratt.  (Va.)  134.  If  one  partner  occupy  alone  a  house 

A  purchase  by  one  partner  of  prop-  belonging  to  the  copartnership,  he  will 
erty  hired  by  the  partnership,  enures  to  be  liable  to  the  firm  for  rent  on  account 
the  benefit  of  all,  on  payment  of  their  of  it,  although  there  was  no  special 
shares  of  the  purchase  money.  Laflfan  agreement  to  that  efiect,  and  no  charge 
V.  Nao-lee  9  Cal.  662.  was  made  against  him  on  the  books  of 

The  purchase  of  goods  by  one  partner  the  firm  during  his  lifetime.  Holden  v, 
upon  his  individual  credit,  but  for  the  Peace,  4  Ired.  (N.  C.)  Eq.  223.  See, 
firm's  benefit,  which  fact  he  conceals,  also,  Sloughton  v.  Lynch,  2  Johns.  (N. 
vests  a  valid  title  in  the  firm,  and  the    Y.)  Ch.  209. 

sellers  are  not  thereby  defrauded  or  in-  Illustrations.— Where  one  partner 
jured.  McNair  v.  Rewey,  62  Wis.  167.  represented  to  the  others  that  he  had 
Land  will  not  be  deemed  to  have  been  purchased  the  interest  of  a  deceased 
acquired  by  one  partner  in  trust  for  the  partner,  thereby  preventing  its  purchase 
firm  against  his  own  intention  and  the  by  them,  and  afterwards  bought  such 
understanding  of  the  other  partners  at  interest,  it  was  held  that  it  should 
the  time.  Blachley  v.  Coles,  6  Colo.  349.  enure  to  their  benefit  as  well  as  to  his 
Profits  made  by  a  partner  in  the  pur-  own.  Warren  v.  Schainwald,  62  Cal.  56. 
chase  and  sale  of  merchandise,  in  which  Insurance  against  fire  effected  by  one 
his  copartners  are  entitled  to  share,  partner,  in  the  firm  name,  upon  prop- 
give  them  no  privilege.  Shropshire  v.  erty  of  the  firm,  the  premium  being 
Russell,  2  La.  Ann.  961.  paid  from  funds  of  the  firm,  will  be  for 

The  rights  of  a  firm  under  a  mortgage  the  benefit  of  the  firm,  whatever  the  in- 
held  by  the  firm  are  not  affected  by  the  tentions  of  the  member  effecting  the  in- 
purchase  of  the  equity  of  redemption  surance  may  have  been,  notwithstand- 
by  one  of  the  partners  for  himself,  ing  the  fact  that  he  charged  such  pre- 
Gordon  v.  Tyler,  53  Mich.  629.  mium   to  himself.     If  he  receives  the 

One  partner  who  obtains  the  exclu-    money  from  the  insurance  company  he 
sive  use  of  a  right  in  which  the  firm  is    must  account  to  the  other  partner  for 
interested,  will  be  held  in  law  to  hold    his  share  of  it.     Tebbetts  v.  Dearborn, 
such  use  in  trust  for  th«  firm.     Weston    74  Me.  392. 
V.  Ketcham,  39  X.  Y.  Super.  Ct.  54.  One  partner  purchased  from  an  em- 

522 


CHAP.  II.,  §  II.]    BENEFIT   OBTAINED    BELONGS   TO    FIRM.  307* 

of  a  lease  of  the  partnership  property,  he  will  not  be  allowed  to 
treat  this  renewed  lease  as  his  own  and  as  one  in  which  his  copart- 
ners have  no  interest.  This  was  laid  down  and  acted  on  by  Sir 
William  Grant  in  the  celebrated  case  of  Featherstonhaugh  v.  Fen- 
wick,  (s)  where  two  partners  having  obtained,  in  their  own  names, 
a  renewal  of  the  lease  of  the  partnership  premises,  immediately 
dissolved  the  partnership  and  sought  to  exclude  the  plaintiff,  their 
copartner,  from  all  interest  in  the  new  tease;  but,  in  taking  the 
accounts  of  the  partnership,  the  new  lease  was  held  to  be  part  of 
the  assets  of  the  firm. 

Clegg  V.  Fish  wick  (^)  is  another  case  to  the  same  effect.    *There 
^  the  plaintiff  was  the  administratrix  of  one  of  several  part- 

^  ners  in  a  coal  mine,  and  she  filed  a  bill,  some  years  after 
the  death  of  the  deceased,  against  the  surviving  partners,  for  an 
account  and  a  dissolution,  and  for  a  declaration  that  a  renewed 
lease,  which  had  been  obtained  by  the  defendants,  might  be  de- 
clared subject  in  equity  to  a  trust  for  the  benefit  of  the  partnership. 
A  twofold  defence  was  set  up,  viz.,  first,  that  the  old  partnership 
ended  with  the  old  lease,  and  that  the  plaintiff  could  not  therefore 
claim  any  interest  in  the  new  lease ;  and  secondly,  that  she  had, 
some  time  before  the  filing  of  the  bill,  assigned  all  the  share  of 

ployee  of  the  firm  a  patent  right  in  an  firm,  more  than  his  sliare,  refusing  to 
article  of  use  and  value  to  the  firm,  and,  pay  anything— ifeM,  that  the  title  taken 
without  disclosing  or  being  requested  to  by  A  was  taken  for  the  partnership; 
disclose  the  terms  of  the  purchase,  and  that  B's  refusal  to  pay  a  part  of  the 
offered  to  sell  it  to  the  firm  at  an  ad-  purchase  money  did  not  deprive  him  of 
▼anced  price,  but  the  firm  refused  to  the  right  of  having  the  benefit  of  the 
buy,  preferring  to  use  the  article  on  a  purchase,  nor  was  it  evidence  of  a  dis-- 
royalty  basis.  Held,  that  under  the  cir-  solution  of  the  partnership.  Eakin  v. 
cumstances  the  firm  could  not  insist,  after  Shumaker,  12  Tex.  51. 
dissolution,  that  the  purchase  should  be  (s)  Featherstonhaugh  v.  Fenwick,  17 
considered  as  having  been  made  for  its  Ves.  298.  In  such  cases  tiie  other  part- 
benefit.  American  Bank  Note  Co.  v.  Ed-  ners  cannot  restrain  the  landlord  from 
son,  56  Barb.  (N.  Y.)  84 ;  S.  C,  1  Lans.  granting  the  lease  to  the  one  partner 
588.  only.  Their  remedy  is  to  treat  the 
A  and  B,  owning  land  in  partner-  lessee  as  a  trustee  for  the  firm.  Alder 
ship,  agreed  to  purchase  an  outstanding  v.  Fouracre,  3  Swanst.  489. 
title  ;  A  purchased  and  paid  for  it,  and  (t)  1  Macn.  &  G.  294.  See,  too,  Clem- 
took  the  conveyance  to  himself;  B,  ents  v.  Hall,  2  De  G.  &  J.  173,  and  24 
having  then  done,  or  advanced  for  the  Beav  333. 

523 


308*  DUTY   TO   OBSERVE    GOOD    FAITH.  [bOOK    III., 

the  deceased  to  his  children,  and  that  she,  therefore,  at  any  rate, 
had  no  right  to  institute  proceedings  respecting  such  share.  It 
was,  however,  decided,  first,  that  the  old  lease  was  the  foundatioHi 
for  the  new  one,  and  that  parties  interested  jointly  with  others  in 
a  lease  could  not  take  the  benefit  of  a  renewal  to  the  exclusion  of 
those  others  ;  and  secondly,  that  what  had  been  assigned  by  the 
plaintiff  was  the  share  of  the  deceased  in  the  partnership,  which 
share  had  never  been  ascertained,  and  that  the  effect  of  the  assign- 
ment was  merely  to  constitute  her  a  trustee  of  the  share  for  the 
assignees  after  she  had  got  it  in,  and  not  to  deprive  her  of  her 
jiower  to  call  for  a  realization  of  the  partnership  property. 

Open  renewal. — In  both  of  these  cases  the  renewal  of  the  lease 
■was  clandestine.  But  that  is  not  an  essential  feature.  In  the  more 
recent  and  very  important  case  of  Clegg  v.  Edmondson,  {xi)  the 
partnership  was  at  will ;  the  managing  partners  gave  notice  of  dis- 
solution and  of  their  intention  to  renew  the  old  lease  for  their  own 
benefit.  They  afterwards  did  so,  the  other  partners  protesting,  and 
there  was  evidence  to  show  that  the  landlord  objected  to  renew  to 
any  pei'sons  except  the  managing  partners,  {x)  It  was  held,  how- 
ever, that  it  was  not  competent  for  the  managing  partners  thus  to 
acquire  for  themselves  alone  the  benefit  of  the  renewed  lease.  (3/) 

Right  to  reject  renewed  lease. — A  partner,  by  renewing  a  lease 
against  the  will  of  his  co*partners,  cannot  force  it  on  them  i-^.^qq 
and  compel  them  to  treat  the  property  comprised  in  it  as 
acquired  for  the  firm,  unless  there  is  some  agreement  binding  them 
so  to  do.  (2;)  11 

(u)  8  De  G.,  M.  &  G.  787.  will,  in   respect  of  a  renewed  lease,  be 

(x)  See,  as  to  this,  Fitzgibbon  v.  Scan-  held  to  stand  as  a  trustee  for  the  firm, 

Ian,  1  Dow  269.  where  he  would  not  be  so  deemed  in  re- 

{y)  At  the  same  time  relief  against  spect   of  a   pwrchase  of  the    reversion, 

them    was   refused    on    the   ground    of  Anderson   v.  Lemon,  4    Sandf.   (N.  Y.) 

laches   and   delay  on   the   part   of  the  552. 

plaintiffs.     On  this  point  the  case  will  Where  one  partner,  after  the  dissolu- 

be  noticed  hereafter.     See  book  III.,  ch.  tion  of  the  firm,  and  prior  to  the  expira- 

10,  §  3.  tion  of  the  lease  held  by  it,  which  con- 

(z)  Clements  v.  Norris,  8  Ch.  D.  129.  tained  no  provision  for  renewal,  obtains 

where  an  attempt  of  this  sort  was  de-  a  renewal  of  the  same  without  the  con- 

feated.  sent  of  his  copartner,  he  must  account 

11.    Renewing    leases. — A    partner  to  the  latter  for  the  value  of  the  expec- 

524 


CHAP.  II.,  §  II.]    BENEFIT   OBTAINED    BELONGS   TO    FIRM.  309* 

Benefits  derived  from  use  of  partner slup  property. — The  principle 
which  precludes  a  partner  from  retaining  for  himself  benefits  which 
he  ought  to  share  with  his  copartners,  is  applied  to  cases  in  which 


tancy  of  renewal  which  pertained  to  the 
old  lease.  Johnson's  Appeal  (Pa.\  8 
Atl.  Hep.  36. 

Where  a  lease,  taken  by  a  member  of 
a  copartnership,  is  not  taken  by  him  ex- 
pressly for  the  firm,  but  demises  the 
premises  to  him  individually,  it  does 
not  belong  to  the  partnersiiip ;  and  parol 
evidence  that  it  was  executed  for  the 
benefit  of  the  partnership  is  inadmissi- 
ble.    Otis  V.  Sill,  8  Barb.  (N.  Y.)  102. 

Where  one  partner  is  negotiating  to 
buy  for  the  firm  real  estate,  of  which  the 
firm  has  a  lease  for  years,  and  the  other 
partner  secretly  purchases  it  for  himself, 
he  will  be  held  lo  hold  the  land  in  trust 
for  the  firm.  Anderson  v.  Lemon,  8  N. 
Y.  236. 

The  fact  that  the  landlord  would  not 
Lave  granted  the  new  lease  to  the  other 
partners  or  to  the  firm,  is  immaterial. 
Mitchell  V.  Reed,  61  N.  Y.  123.  See, 
also,  generally,  Chamberlain  v.  Cham- 
berlain, 44  N.  Y.  Super.  Ct.  116. 

Lord  Eldon,  in  Featherstonhaugh  v. 
Fenwick  (17  Ves.  311),  said:  "It  is 
clear  that  one  partner  cannot  treat  pri- 
vately, and  behind  the  backs  of  his 
copartners,  for  a  lease  of  the  premises 
where  the  joint  trade  is  carried  on,  for 
his  own  individual  benefit.  If  he  does 
so  treat,  and  obtains  a  lease  in  his  own 
name,  it  is  a  trust  for  the  partnership  ; 
and  this  renewal  must  be  held  to  have 
been  so  obtained.  Consider  what  an 
unreasonable  advantage  one  partner 
would,  upon  a  different  principle,  obtain 
over  the  rest.  In  this  respect  there  can 
be  no  distinction  whether  the  partner- 
ship is  for  a  definite  or  indefinite  period. 
If  one  partner  might  so  act  in  the  latter 
case,   he  might   equally  in  the  former. 

5 


Supposing  the  lease  and  the  partnersiiip 
to  have  different  terms  of  duration,  he 
miglit,  having  clandestinely  obtained  a 
renewal  of  the  lease,  say  to  the  other 
partners:  'Tlie  premises  on  which  we 
carried  on  our  trade  have  become  mine 
exclusively,  and  I  am  entitled  to  demand 
from  you  whatever  terms  I  think  fit,  as 
the  condition  for  permitting  you  to  carry 
on  the  trade  here.'  Is  it  possible  to  per- 
mit one  partner  to  take  such  an  advan- 
tage ?  When  the  application  was  made 
for  a  renewal,  no  notice  of  dissolution 
had  been  given ;  nor  had  the  plaintiff 
notice  of  any  intention  of  renewing  the 
lease.  It  is  not  true,  as  has  been  rep- 
resented, that  the  impediment  to  a  re- 
newal to  the  partnership  arose  solely 
from  the  indisposition  of  Mr.  Wilkinson 
to  any  connection  with  the  plaintiff;  as 
before  any  objection  had  been  made,  on 
that  or  any  other  ground,  the  defendant 
goes  with  the  intention  and  for  the  direct 
purpose  of  obtaining  a  renewal  for  him- 
self and  his  son  exclusively.  He  makes 
the  application  to  Murray,  who  says  the 
proposal  was  for  a  renewal  for  the  benefit 
of  the  defendants ;  expressly  excluding 
the  plaintiff,  with  whom  it  was  repre- 
sented that  George  Fenwick  was  deter- 
mined to  have  no  further  connection  in 
trade ;  and,  though  it  may  be  true  that 
Wilkinson  afterwards  said  he  would  not 
have  granted  a  lease  to  the  defendants 
jointly  with  the  plaintiff,  that  declara- 
tion had  become  quite  unnecessary  by 
the  resolution,  previously  expressed  by 
the  defendant,  not  to  take  a  lease  jointly 
with  him.  This  clandestine  conduct 
was  very  unfair  towards  the  plaintiff. 
The  defendants  had  not  intimated  to 
him  that  they  would  not  have  any 
25 


309*  DUTY   TO   OBSERVE    GOOD    FAITH.  [bOOK    III., 

unfairness  and  misconduct  are  by  no  means  so  apparent  as  in  those 
just  cited.  A  high  standard  of  honor  requires  that  no  partner  shall 
derive  any  exclusive  advantage  by  the  employment  of  the  partner- 
ship property,  or  by  engaging  in  transactions  in  rivalry  with  the 
firm. 

Profits  of  tally  shop. — Thus,  in  Burton  v.  Wookey,  (a)  the  plain- 
tiff and  the  defendant  were  partners  as  dealers  in  lapis  calaminaris. 
The  defendant,  who  was  a  shopkeeper,  lived  near  the  mines  in  which 
the  ore  was  got,  and  he  purchased  it  of  the  miners.  Instead,  how- 
ever, of  paying  them  with  money,  he  paid  them  with  shop  goods, 
and  in  his  account  with  the  plaintiff  charged  him  as  for  cash  paid 
to  the  amount  of  the  selling  price  of  the  goods.  The  plaintiff  con- 
tended that  the  price  of  the  ore  ought,  as  between  himself  and  the 
defendant,  to  be  considered  as  being  the  cost  pi*Ice  of  the  goods  given 
in  exchange  for  it,  and  that  the  profit  made  by  the  exchange  ought 
to  be  accounted  for  to  the  partnership.  The  court  adopted  this  view, 
holding  that  it  was  the  duty  of  the  defendant  to  buy  the  ore  at  the 
lowest  possible  price,  and  to  charge  the  partnership  with  no  more 
than  he  actually  gave  for  the  goods  bartered  for  the  ore.  An  account 
of  the  profit  made  by  the  defendant  in  his  barter  of  the  goods  was 
decreed  accordingly. 

Part  owners  of  ships. — Again,  in  Gardner  v.  McCutcheon,  (6)  a 
ship,  of  which  the  plaintiffs  and  the  defendant  were  part  owners  and 

further  connection  with  him,  and  that  of  equal  value  to  the  plaintiff,  who  was 

they  intended  to  apply  for  a  lease  on  to  carry  it  away,  and  seek  some  place  in 

their  own  account.     They  ought  first  to  which  to  put  it,  as  to  the  defendants, 

have  given   him   notice,   and   to  have  who  were  to  continue  it  in  the   place 

placed  him  on  equal  terms  with  them  ;  where  the  trade  was  already  established; 

and  then,  if  Mr.  Wilkinson  had  thought  and  if  the  stock  was  sold,  the  same  cir- 

proper  to  give  them  the  preference,  the  cumstances  would  give  them  an  advan- 

case  might  admit  of  a  differeni  consid-  tage  over  other  bidders.     In  effect  they 

eration.     Instead  of  that,  they  clandes-  would  have  secured  the  good  will  of  the 

tinely   obtained    an    advantage,   which  trade  to  themselves,  in  exclusion  of  their 

would  enable  them  to  dissolve  the  part-  partner." 

nership  on  terms  very  unfavorable  to  the  (a)  6  Madd.  367. 

plaintiff;  and  they  evidently  had  that  (6)  4  Beav.  534.     See,  too,  Benson  v. 

object  in  view.     If  they  can   hold  this  Heathorn,  1  You.  &  C.  C.  C.  326,  and  2 

lease,  and  the  partnership  stock  is  not  Coll.  309 ;  Miller  v.  Mackay,  31  Beav. 

brought  to  sale,  they  are  by  no  means  77  ;  Shallcross  v.  Oldham,  2  Johns.  &  H. 

on  equal  terms.     The  stock  cannot  be  609 ;  and,  as  to  commissions,  Holden  v. 

526 


CHAP.  II.,  §  II.]    BENEFIT    OBTAINED    BELONGS    TO    FIRM.  310* 

the  defendant  was  master,  was  employed  for  tlie  comracn  benefit  of 
it^o-iff]  ^11  i»  ^trading  and  carrying  under  charter.  The  defendant, 
during  the  time  the  ship  was  thus  employed,  traded  on  his 
own  account  and  made  considerable  profit.  It  was  held  that  he  was 
bound  to  account  for  the  profits  thus  obtained.  He  was  bound  to 
trade  to  the  best  of  his  ability  for  the  joint  interest  of  himself  and 
co-owners  ;  he  had  no  right  to  employ  the  partnership  property  in 
a  private  speculation  for  his  own  benefit ;  and  although  he  alleged 
that  the  profits  were  made  solely  by  the  employment  of  his  own 
private  capital,  and  that  by  custom  masters  of  ships  were  allowed 
to  trade  for  their  own  benefit,  the  court  declined  to  recognize  any 
such  custom,  and  considered  that  the  profits  had  been  made  by  the 
employment  of  what  was  not  the  defendant's  exclusively,  and  that 
the  plaintiffs  had  therefore  a  right  to  share  them. 

Benefits  resulting  from  connection  with  the  firm. — A  partner,  more- 
o-ver,  is  not  allowed,  in  transacting  the  partnership  affairs,  to  carry 
•on  for  his  own  sole  benefit  any  separate  trade  or  business  which, 
were  it  not  for  his  connection  with  the  partnership,  he  would  not 
have  been  in  a  position  to  carry  on.  Bound  to  do  his  best  for  the 
firm,  he  is  not  at  liberty  to  labor  for  himself  to  their  detriment ; 
and  if  his  connection  with  the  firm  enables  him  to  acquire  gain,  he 
cannot  appropriate  that  gain  to  himself  on  the  pretence  that  it  arose 
from  a  separate  transaction  with  which  the  firm  had  nothing  to  do. 
This  is  well  exemplified  by  the  cases  as  to  renewed  leases  M'hich 
have  been  already  referred  to,(c)  and  by  Eussell  v.  Austwick, 
which  also  shows  that  the  same  principles  apply  wherever  there  is 
an  agreement  to  share  profits. 

Carriers  not  partners  inter  se. — In  Russell  v.  Austwick  (d)  sev- 
eral persons  agreed  to  carry  on  business  as  carriers  between  Lon- 
don and  Falmouth,  but  they  expressly  stipulated  that  no  partnership 

Webber,  29  Beav.  117.     Compare  Mil-  case,  the  note  to  it  in  Mr.  Belt's  edition, 

let  V.  Mackay,  34  Beav.  295,  where  the  See  infra,  ch.  4,  §  1. 
profits  were  held  to  belong  to  him  who        (c)  Ante  p.  *307. 

made  them.    In  Moffatt  v.  Farquharson,        [d)  1  Sim.  52.    See,  also,  as  to  benefits 

2  Bro.  C.  C.  338,  a  part  owner  of  a  sJiip  derived  by  one  co-owner  of  a  mine  from 

was  held  to  be  exclusively  entitled  to  the  use  of  a  shaft  situate  in  his  own  land, 

money  paid  him  for  his  vote  in  the  ap-  but  used  for  the  mine,  Clegg  v.  Clegg,  3 

pointment  of  a  master.    But,  see,  on  that  GiflT.  322. 

527 


310*  DUTY    TO    OBSERVE   GOOD    FAITH.  [bOOK    III., 

should  subsid  betiveen  them,  aiul  that  each  should  have  a  certain 
portion  of  the  road  over  whicli  he  was  to  carry.     Business  was 
commenced  and  carried  on  by  the  parties  to  tliis  agreement  under 
the  name  of  Messrs.  Russell  &  Co.,  and  they  were  employed  to 
carry  bullion  from  Falmouth  and  Plymouth  to  London.     On  the 
♦issue  of  a  new  silver  coinage  by  the  Bank  of  England,   r^^.^,-. 
Austwick,  who  appears  to  have  been  the  London  agent  of  '- 
the  carriers,  entered  into  a  contract  with  the  master  of  the  mint  for 
the  carriage  of  the  new  coin  to  towns  on  the  road  between  Lon- 
don and  Falmouth.     Shortly  afterwards  he  entered  into  another 
contract  with  the  master  of  the  mint  for  the  conveyance  of  more 
new  coin  to  towns  in  Middlesex  and  the  adjoining  counties.     None 
of  these  last  towns  lay  on  the  road  leading  from  London  to  Fal- 
mouth, and  many  of  them  were  only  accessible  by  cross  country 
roads,  and  in  consequence  of  the  increased  risk  of  carriage  along 
these  roads,  the  mint  authorities  agreed  to  pay  7s.  Qd.  per  cent,  for 
all  the  coin  sent  from  the  mint,  instead  of  5s.  per  cent.,  which  was 
the  remunex-ation  agreed  on  in  the  first  contract.     Austwick  con- 
tended that  he  was  entitled  to  the  whole  benefit  of  this  second  con- 
tract, because  (except  as  to  the  extra  2.9.  6d.)  it  had  nothing  to  do 
with  the  carrying  business  between  London  and  Falmouth  ;  and 
because,  as  to  the  2s.  6d.,  that  sum,  although  calculated  on  all  the 
coin  carried,  whether  under  the  first  or  the  second  agreement,  was 
in  fact  paid  by  the  mint  in  consideration  only  of  the  extra  risk 
attending  the  carriage  to  the  towns  specified  in  the  second  contract. 
On  the  other  hand,  it  was  contended  and  held  that  the  second  agree- 
ment ought  to  be  considered  as  made  on  account  of  all  the  persons 
interested  in  the  first  agreement;  because,  although  the  common 
concern  had  no  connection  with  the  provincial  roads  which  were  the 
occasion  of  the  second  agreement,  yet  this  agreement  was  entered 
into  by  the  officers  of  the  mint  as  connected  with,  and  a  continua- 
tion of,  the  first  agreement,  and  in  confidence  of  the  responsibility 
of  the  parties  to  it. 

This  case  of  Russell  v.  Austwick  shows  how  difficult  it  is  for  a 
partner  to  benefit  himself  exclusively  by  dealings  which  in  honor 
he  ought  not  to  have  engaged  in  except  for  the  common  benefit  of 
the  firm. 

528 


CHAP.  II.,  §  II.]    BENEFIT    OBTAINED    BELONGS    TO    FIRM.  31]* 

Distinct  businesses. — Lock  v.  Lynara,  which  came  before  the 
Court  of  Chancery  in  Ireland,  affords  another  instructive  example 
of  the  ap23lication  of  the  same  wholesome  doctrine.  In  this  case(e) 
*3121  *^^^  plaintiff  *and  the  defendant  had  agreed  to  share  the 
profit  and  loss  arising  from  contracts  taken  by  the  defend- 
ant for  the  supply  of  meat  and  bread  to  her  majesty's  forces  in  Ire- 
land. Whilst  this  agreement  was  in  force,  the  defendant  entered 
into  secret  agreements  with  other  persons  to  share  with  them  the 
profit  and  loss  accruing  in  respect  of  similar  contracts  entered  i-nto 
and  taken  by  them.  The  plaintiff  claimed  a  share  in  the  profits 
made  by  the  defendant  under  these  secret  agreements,  whilst  the 
defendant  contended  that  he  was  entitled  to  retain  them  for  his  own 
exclusive  benefit.  The  Lord  Chancellor  observed  that  in  all  cases 
of  this  kind  the  real  question  was  whether,  from  the  nature  of  the 
transaction  between  the  partners,  there  was  any  express  or  implied 
contract  against  other  dealings  of  a  like  character ;  and  that  although 
there  was  no  engagement  not  to  enter  into  any  other  partnership  of 
the  same  kind,  still  it  never  could  have  been  in  the  contemplation 
of  either  of  the  jjarties  that  one  partner  should,  in  his  own  name  or 
in  that  of  any  other  person,  adopt  contracts  to  the  prejudice  of  the 
other's  interest.  A  decree  was  accordingly  made  directing  an  inquiry 
whether,  during  the  period  for  which  any  partnership  between  the 
plaintiff  and  the  defendant  existed,  the  defendant,  either  alone  or 
jointly  with  any  other  person  or  persons,  separately  from  the  plain- 
tiff, entered  into  or  was  beneficially  interested  in  any  other  contract 
or  dealing  of  the  like  nature  with  those  in  which  the  plaintiff  and 
the  defendant  were  engaged  as  partners.  12 

(e)   Lock   V.    Lynam,   4   Ir.  Ch.  188.  different  country,  in  the  ordinary  course 

Compare  this  and  the  last  case  with  Mil-  of  the  partnership  business,  the  presump- 

ler  V.  Mackay,  34  Beav.  295 ;   and  see  tion  is  that  such  shipment  is  made  on 

Somerville  v.  Mackay,  18  Ves.  382.  joint  account,. in  the  absence  of  conclu- 

12.  Carrying  on  distinct  business,  sive  evidence  that  it  was  made  on  the 

— Beyond  the  line  of  the  trade  or  busi-  separate  account  of  one  partner.     The 

ness  in  which  a  firm  is  engaged,  an  in-  Francis,  1  Gall.  (U.  S.)  618 ;    The  San 

dividual  member  of  the  firm  may  traffic  Jos^  Indiano,  2  Id.  268. 

on  his  own  account.    Wheeler  v.  Sage,  1  A  and   B   entered   into   partnership, 

Wall.  (U.  S.)  518.  each  engaging  to  devote  his  whole  time 

Where  one  of  several  partners  ships  to  the  business.     B  subsequently  formed 

goods  to  another  partner  residing  in  a  another   distinct     partnership   with   C. 

529  34 


312=* 


DUTY   TO   OBSERVE   GOOD    FAITH.  [bOOK    III., 


One  partner  competing  with  firm. — After  the  decisions  to  which 
attention  has  now  been  drawn,  there  can  be  little  doubt  that  a  part- 
ner cannot,  either  openly  or  secretly,  lawfully  carry  on  for  his  own 
benefit  any  business  in  rivalry  with  the  firm  to  which  he  belongs.  (/) 
But  where  a  partner  carries  on  a  business  not  connected  with  or 
competing  with  that  of  the  firm,  his  partners  have  no  right  to  the 
profits  he  thereby  makes,  even  if  he  has  agreed  not  to  carry  on  any 
separate  business.  (^)  13 


Held,  that  A  could  not  claim  any  share  Iowa  Seed  Co.  v.  Dorr  (Iowa),  30  N.  W. 

in  the  profits  of  the  business  of  B  &  C-  Rep.  866. 

Murrell  v.  Murrell,  33  La.  Ann.  1238.  (/)    See  Glassington  v.  Thwaites,   1 

One    partner    having    an    individual  Sim.  &  S.  124;    England   v.  Curling,  8 

interest   adverse  to  that  of  his  firm,  in  Beav.  129,  in  which,  however,  there  was 

another  firm  who  had  dealings  and  open  something  more  than  mere  rivalry, 
accounts   with  his  firm,  promised  such        [g)  Dean  v.  Macdowell,  8  Ch.  D.  345. 

other  firm  that  certain  concessions  favor-  An  injunction  might  have  been  obtained, 

able  to  them  would  be  made  by  his  firm  and  perhaps  damages  for  a  breach  of 

upon  the  settling  of  the  accounts  between  covenant. 

the  two  firms.  Such  promise  was  made  13.  One  partner  competing  with 
without  the  knowledge  of  his  copartners,  firm. — Where,  by  the  partnership  con- 
and  was  prejudicial  to  them.  Held,  that  tract,  one  partner  understakes  to  super- 
the  promise  was  not  binding  upon  the  intend  and  manage  the  business,  a  court 
other  partners,  the  accounts  have  been  in  equity  will  enjoin  him  from  transact- 
regularly  rendered  and  the  charges  in  ing  the  same  business  at  another  store 
them  being  the  same  as  those  against  in  the  same  place,  for  his  sole  benefit, 
other  dealers  with  the  firm.  Goodman  even  though  there  be  no  express  cove- 
V.  Einstein,  51  How.  (X.  Y.)  Pr.  9.  nant  in  the  articles  restraining  him  from 

Where  a  firm,  which  had  built  up  an  so  doing.     Marshall  v.  Johnson,  33  Ga. 

extensive   trade  and   acquired  a  great  500. 

reputation  as  dealers  in  seeds,  grains,  In  Glassington  v.  Thwaites  (1  Sim.  & 
plants,  &c.,  which  were  sold  with  labels  S.  124,  131,  133)  Sir  John  Leach,  Vice 
attached  bearing  the  firm  name,  made  Chancellor,  said :  "All  newspapers  are 
an  assignment  for  the  benefit  of  creditors,  to  some  extent  rivals.  The  competition 
and  plaintiff  purchased  all  of  the  stock,  is  more  immediate  between  two  morning 
good  will,  &c.,  of  such  firm,  and,  asso-  papers  and  two  evening  papers;  but  there 
dating  with  him  one  of  the  members  of  is  necessarily  some  degree  of  rivalry 
the  firm,  conducted  the  business  at  the  between  a  morning  and  an  evening  pa- 
old  stand — Held,  that  plaintiff  did  not  per,  especially  in  the  country.  It  might, 
acquire,  by  such  purchase,  any  right  to  therefore,  have  been  made  a  question 
restrain  another  of  the  old  firm,  who  had  whether  it  would  be  a  due  act  of  man- 
formed  a  corporation,  from  conducting  a  agement  in  the  partnership  concern  of  a 
similar  business  under  his  own  name,  morning  paper  to  assist  with  its  property 
■which  was  the  original  firm  name  also,  and  its  labor  the  publication  of  any  other 

530 


€HAP.  II.,  §  II.]    BENEFIT  OBTAINED   BELONGS   TO   FIRM.  313* 

Buying  share. — *  Again,  it  has  been  held  competent  for  ^^  . 
one  partner  to  acquire  for  himself  the  share  of  a  copartner 
in  the  partnership  business,  without  informing  the  other  partners 
of  the  purchase,  and  without  giving  them  an  opportunity  of  ac- 

new&paper,  so  as  to  enable  the  majority  protect  themselves  by  their  contracts ; 
of  the  partners  in  that  respect  to  bind  and,  accordingly,  it  is  a  common  cove- 
the  minority.  But  the  question  does  not  nant  in  such  partnership  articles,  that  no 
arise,  because  the  plaintiff  himself  is  to  partner  shall  be  proprietor  of  any  other 
be  considered  as  a  party  to  the  practice,  newspaper.  In  the  present  case  there  is 
before  his  copartners  became  the  proprie-  actually  a  covenant  that  the  proprietors 
tors  of  the  evening  paper,  and  because  will  not  be  concerned  in  any  other  morn- 
there  is  evidence  that  the  proprietors  ing  paper,  which  by  implication  affords 
of  other  morning  papers  have  adopted  the  conclusion  that  it  was  the  intention 
the  same  practice  with  respect  to  other  of  the  parties  that  they  might  engage 
evening  papers,  so  as  to  form  a  sort  of  in  the  concern  of  any  evening  paper, 
'usage  in  the  trade  to  this  effect.  And  Where  there  is  no  such  covenant  of 
it  is  to  be  considered  that  the  annual  restraint,  it  is  clear  that  at  law  a  partner 
sum  paid  by  the  evening  paper  for  the  in  one  newspaper  may  be  a  proprietor 
accommodation  afforded  to  it  outweighs  in  any  other  newspaper ;  and  in  this 
the  danger  of  increased  competition,  case  equity  must  follow  law;  and  it  can- 
The  true  question  here  is  whether  not  be  intended  that  the  parties  meant 
it  makes  any  difference  that  the  other  to  impose  a  restraint  which  they  might 
proprietors  of  the  "  Herald"  have  now  have  expressed,  and  have  not  expressed, 
become  the  proprietors  of  the  evening  and  where  it  is  plain  their  attention  was 
paper ;  and  I  think  it  does  not  make  a  directed  to  the  subject.  The  principles 
material  difference.  It  is  true  that  a  of  courts  of  equity  would  not  permit  that 
considerable  part  of  the  expense  of  a  parties  bound  to  each  other  by  express 
newspaper  is  occasioned  by  procuring  or  implied  contract  to  promote  an  un- 
information  ;  and  if  some  of  the  proprie-  dertaking  for  the  common  benefit,  should 
tors  of  a  morning  paper  are  also  the  pro-  any  of  them  engage  in  another  concern, 
prietors  of  an  evening  paper,  they  may  which  necessarily  gave  them  a  direct 
have  a  stronger  interest  to  promote  the  interest  adverse  to  that  undertaking, 
success  of  the  evening  paper  than  of  the  But  the  argument  here  is,  not  that  the 
morning  paper,  and  a  strong  temptation  defendants,  by  becoming  the  proprietors 
to  use  the  information  obtained  at  the  of  the  evening  paper,  place  themselves 
expense  of  the  morning  paper  for  the  in  a  situation  in  which  they  are  neces- 
benefit  of  the  evening  paper.  This  sarily  required  to  betray  their  duty  to 
temptation  forms  a  powerful  objection  the  morning  paper ;  but  that  if  their  in- 
in  all  cases  to  the  partner  in  the  concern  terest  be  greater  in  the  evening  paper 
of  one  newspaper  being  permitted  to  be  than  in  the  morning  paper,  they  are  ex- 
a  partner  in  the  concern  of  any  other  posed  to  a  temptation  to  be  dishonest 
newspaper.  But  it  is  an  objection  and  to  betray  their  duty  to  the  morning 
founded  on  the  principle  of  policy  and  paper.  If  they  act  honestly,  it  is  imma- 
discretion,   against   which  parties   may  terial  to  the  morning  paper  whether  the 

531 


313* 


DUTY   TO   OBSERVE   GOOD   FAITH.  [bOOK   III., 


quiring  it.  (/i)  The  articles  of  partnership  did  not  forbid  such  a 
purchase ;  nor  was  it  any  part  of  the  business  of  the  firm  to  buy 
the  shares  of  its  members.  14 

Pai'tnership  not  yet  formed. — The  same  obligation  to  act  with 


defendants  are  or  not  the  proprietors  of 
the  evening  paper.  And  for  this  reason  it 
is  that  it  makes  no  difference  in  the  pres- 
ent case  tliat  the  defendants  have  become 
the  proprietors  of  the  evening  paper." 

(h)  Oassels  r.  Stewart,  6  App.  Cas.  64. 

14.  Buying  share  of  copartner. — 
One  partner  may  sell  his  interest  in  the 
partnership  property  to  his  copartner ; 
and  if  the  sale  be  fair,  he  will  take  the 
exclusive  title  thereto.  Reese  v.  Brad- 
ford, 13  Ala.  837. 

One  partner  may  purchase  the  interest 
of  the  other  in  a  contract,  provided  it 
does  not  call  for  the  joint  personal  ser- 
vices of  the  two.  Love  v.  Van  Every, 
18  Mo.  App.  196.  Such  a  transfer  of  in- 
terest, if  bona  fide,  may  be  made  without 
writings  or  vouchers.  Ke  Great  West- 
ern Tel.  Co.,  5  Biss.  (U.  S.)  363. 

One  partner  can  assign  his  interest  in 
an  open  account  due  to  the  firm  to  his 
copartner,  and  the  latter  may  become 
the  real  party  in  interest,  so  as  to  main- 
tain a  suit  on  the  account  in  his  own 
name.  Swails  v.  Coverdill,  17  Ind.  337  ; 
Cook  V.  Beech,  10  Humph.  (Tenn.)  412. 
But  see  Horbach  v.  Huey,  4  Watts 
(Pa.)  455.  Such  a  transfer  of  partner- 
ship effects,  if  made  in  good  faith,  vests 
the  title  in  the  transferee  as  his  separate 
estate.  Matter  of  Byrne,  7  Am.  L.  Reg. 
(N.  S.)  499. 

Where  one  partner  assigns  his  interest 
in  the  firm  to  a  copartner,  this  passes  the 
exclusive  right  to  use  the  firm's  trade- 
mark, unless  the  assignment  expressly 
reserves  a  right  in  the  assignor  to  con- 
tinue to  use  it.  Blackwell  v.  Dibrell,  3 
Hughes  (U.  S.)  151. 


The  joint  and  several  note  of  a  part- 
nership is  not  extinguished  by  a  transfer 
thereof  to  another  firm  composed  in  part 
of  the  same  persons  ;  and  the  latter  firm 
may  negotiate  the  note  to  tliird  persons. 
Fulton  V.  Williams,  11  Cush.  (Mass.) 
108. 

Until  the  firm  affairs  are  wound  up 
the  surviving  partner  occupies  a  trust 
position  towards  the  estate  of  the  de- 
ceased partner,  and  a  purchase  by  him 
of  the  latter's  interest  in  the  firm  from 
the  administrator,  is  liable  to  be  set  aside 
at  the  instance  of  the  heirs-at-law,  and 
cannot  be  set  up  as  a  bar  to  a  bill  for  an 
accounting  of  the  partnership  assets  and 
business.  Kimball  v.  Lincoln,  5  111, 
App.  316. 

On  the  question  of  the  mental  compe- 
tency of  a  parly  to  make  a  division  with 
his  copartner  and  cctenant,  of  a  large 
personal  and  real  estate,  the  degree  of 
injustice  and  inequality  in  the  division 
will  be  taken  into  consideration,  with 
the  proof  in  regard  to  incompetency. 
Doughty  V.  Doughty,  3  Halst.  (N.  J.) 
Eq.  227. 

In  Jefferys  v.  Smith  (3  Russ.  158, 168), 
Sir  John  Copley,  Master  of  the  Rolls, 
said :  "  It  is  said  that  the  assignment 
was  colorable ;  that  is,  that  it  was  made 
for  the  sake  of  securing  the  assignor 
from  future  liability.  Suppose  he  made 
it  with  that  view,  he  had  a  right  so  to 
protect  himself  from  future  liability.  It 
is  alleged  that  the  assignee  was  not  a  re- 
sponsible person.  I^et  it  be  so  ;  Guppy, 
for  the  purpose  of  securing  himself,  had 
a  right  to  assign  to  a  person  not  respon- 
sible.     The   only   ground    of  objection 


532 


CHAP.  II.,  §  III.]  POWER   OF   MAJORITY.  313* 

good  faith  exists  between  persons  who  hav'e  agreed  to  become  part- 
ners; and  if  one  of  them,  in  negotiating  for  the  acquisition  of  prop- 
erty for  the  intended  firm,  receives  a  bonus  or  commission,  he  must 
account  for  it  to  tlie  firm  when  formed,  (i)  He  cannot  retain  it  for 
himself  on  the  ground  that  it  was  paid  him  for  personal  services 
rendered  to  the  vendor  before  any  partnership  existed.  Having 
obtained  the  benefit,  whilst  negotiating  for  himself  and  his  future 
partners,  he  must  share  such  benefit  with  them,  (k) 


SECTION   III. — OF   THE    POWERS   OF   A   MAJORITY   OF   PARTNERS. 

Disputes  between  partners. — =-Iu  the  event  of  a  difference  arising 
between  partners,  it  becomes  necessary  to  consider  whether  there  is 
any  method  of  determining  which  of  them  is  to  give  way  to  the 
other.  It  is  not  uncommonly  supposed  that  the  minority  of  the 
partners,  if  they  are  unequally  divided,  must  submit  to  the  ma- 
jority. But  this  is  by  no  means  the  case ;  for,  as  will  be  seen 
presently,  the  majority  cannot  oblige  the  minority  except  within 
certain  limits. 

How  to  be  settled. — Tlie  first  point  to  determine  is  whether  the 
partnership  articles  do  or  do  not  contain  any  express  provision  ap- 
plicable to  the  matter  in  question ;  for  if  they  do,  such  provision 
ought  to  be  obeyed.  (J)  If  they  do  not,  then  the  nature  of  the 
n:o-\A-[  *question  at  issue  must  be  examined;  for  there  is  an  im- 
portant distinction  between  differences  which  relate  to  mat- 
would  be  that  though  there  was  an  as-  (i)  Fawcett  v.  Whitehouse,  1  Kuss.  & 
fiignment  in  form,  there  was  an  under-    M.  132. 

standing  between  the  parties  that  the  (k)  lb.  See,  also,  Kitchens  v.  Con- 
assignee  should  be  a  trustee  for  the  as-  greve,  1  Russ.  &  M.  150,  and  other  cases 
signor.  Here  there  is  no  pretence  for  of  that  class,  relating  to  promoters  of 
such  a  supposition.     I  must  hold,  there-    companies. 

fore,  that  at  all  events,  the  assignment,        (1)  As  to  the  construction  of  partner- 
coupled   with  the  notice,  freed  Guppy    ship  articles,  see  infra,  ch.  9. 
from  future  liability." 

533 


314*  POWER   OF    MAJORITY.  [bOOK    III., 

ters  incidental  to  carrying  on  the  legitimate  business  of  a  partner- 
ship, and  differences  which  relate  to  matters  with  which  it  was 
never  intended  that  the  partnership  should  concern  itself. 

1.  Disputes  on  matters  arising  in  ordinary  course  oj  business. — 
With  respect  to  the  first  class  of  differences,  regard  must  be  had  to 
the  state  of  things  actually  existing ;  for,  as  a  rule,  if  the  partners 
are  equally  divided,  those  who  forbid  a  change  must  have  their 
way  ;  in  re  communi  potior  est  conditio  prohibentis.  (in)  Upon  this 
principle  it  is  that  one  partner  cannot  either  engage  a  new  or  dis- 
miss an  old  servant  against  the  will  of  his  copartner ;  (71)  nor,  if  the 
lease  of  the  partnership  place  of  business  expires,  insist  on  renew- 
ing the  lease  and  continuing  the  business  at  the  old  place.  (0) 

Poioer  of  majority  in  such  cases. — If,  however,  in  a  case  of  this 
description,  unprovided  for  by  previous  agreement,  the  partners  are 
nuequally  divided,  the  minority  must,  the  author  apprehends,  give 
way  to  the  majority.  (^3)  This  is  the  rule  applicable  to  companies, 
whether  incorporated  or  unincorporated ;  (g)  it  is  the  rule  adopted 
in  the  Indian  Contract  act,  (r)  and  it  is  practically  reasonable  and 
convenient.  The  only  alternative  is  to  hold  that  if  partners  dis- 
agree, even  as  to  trifling  matters  of  detail,  the  minority  can  for- 
bid all  change,  and  perhaps  bring  the  business  of  the  firm  to  a 
dead-lock,  for  which  the  only  remedy  is  a  dissolution.  At  the 
same  time  the  author  is  not  aware  of  any  clear  and  distinct  au- 
thority in  support  of  the  proposition  that  even  in  such  matters  a 
dissentient  partner  must  give  way  to  his  copartners,  (s) 

However,  a  majority  cannot,  against  the  will  of  the  minority, 


(m)  But  see,  as  to  the  employment  of  Eobinson  v.  Thompson,  1  Vern.  465 ;  as 

a  ship,  Abbott  on  Shipping  {9th  ed.)  82 ;  to  opening  accounts,  Morgan's  Case,  1 

and  Id.  (12th  ed.)  58;  and  as  to  complet-  Man.  &  G.  235. 

ing  contracts  already  entered  into,  Butch-        (q)  See  Stevens  i'.  South  Devon  Rail, 

art  V.  Dresser,  4  De  G.,  M.  &  G.  545.  Co.,  9  Hare  326 ;  Simpson  v.  Westmin- 

(n)  See  Donaldson  v.  Williamson,  1  ster  Palace  Hotel  Co.,  2  De  G.,  F.  &  J. 

Cromp.  &  M.  345.  141 ;  Kent  v.  Jackson,  2  De  G.,  M.  &  G. 

(0)  Clements  v.  Norris,  8  Ch.  D.  129.  49,  and  14  Beav.  367. 
N.  B. — The   partnership   had   not    ex-        (r)  Section  253,  cl.  5. 
pired.  (s)  Pollock's  Dig.,   §   36,  adopts  the 

(p)  See  Gregory  r.  Patchett,  33  Beav.  author's   view,   but   apparently   on   his 

595 ;  Const  v.  Harris,  Turn.  &  R.  518 ;  authority. 

534 


CHAP.  II.,  §  III.]    MATTERS   WITHIN   SCOPE   OF   BUSINESS.  315  ■ 


*delegate  to  a  manager  the  right  to  sign  the  partnership 


[*31o 


name ;  (t)  and  it  is  doubtful  whether  a  majority  can  de- 
cide where  the  partnership  business  shall  be  carried  on  when  the 
lease  of  its  place  of  business  expires,  (w)  15 

All  partners  entitled  to  be  heard. — A  very  important  rule  respect- 
ing the  powers  and  votes  of  majorities  is  that  a  majority,  to  have 
any  weight,  must  act  and  be  constituted  with  perfect  good  faith  ; 
for  every  partner  has  a  right  to  be  consulted,  to  express  his  own 
views,  and  to  have  those  views  considered  by  his  copartners.  In 
the  language  of  Lord  Eldon,  "  That  is  the  act  of  all  which  is  the  act 
of  the  majority,  provided  all  are  consulted,  and  the  majority  are 
acting  bo7ia  fide,  meeting  not  for  the  purpose  of  negativing  what 
any  one  may  have  to  offer,  but  for  the  purpose  of  negativing  what, 


(i)  See  Beveridge  v.  Beveridge,  L.  E  , 
2  Sc.  App.  183. 

(m)  See  Clements  v.  Norris,  8  Ch.  D. 
129,  but  note  there  the  firm  consisted  of 
two  members  only. 

15.  The  powers  of  a  majority. — The 
general  rule  is  that  in  directing  the 
business  of  a  partnership,  a  majority 
shall  govern,  notwithstanding  the  dis- 
sent of  the  minority.  Peacock  v.  Cum- 
mings,  5  Phila.  (Pa.)  253;  46  Pa.  St. 
434;  Campbell  v.  Bowen,  49  Ga.  417; 
Irvine  v.  Forbes,  11  Barb.  (N.  Y.)  587 ; 
Johnston  v.  Dutton,  27  Ala.  245  ;  Kirk 
V.  Hodgson,  3  Johns.  (N.  Y.)  Ch.  400 ; 
Livingston  v.  Linch,  4  Id.  573;  Water- 
bury  V.  Express  Co.,  50  Barb.  (N.  Y.) 
157  ;  S.  C,  3  Abb.  Pr.  (N.  S.)  163 ;  West- 
ern Stage  Co.  V.  Walker,  .2  Iowa  504 ; 
Yeager  v.  Wallace,  57  Pa.  St.  365. 

The  members  of  a  private  association, 
as  a  telegraph  company,  are  not  part- 
ners. They  are  tenants  in  common  of 
the  property  and  franchise  belonging  to 
the  company,  and  the  majority  cannot 
bind  the  minority,  unless  by  special 
agreement.  Irvine  v.  Forbes,  11  Barb. 
(N.  Y.)  587. 

Whether  the  acts  of  the  majority  are 


done  in  bad  faith,  and  in  willful  viola- 
tion of  the  rights  of  the  minority,  is  a 
question  for  the  jury  under  the  evidence 
in  each  case.  Western  Stage  Co.  v. 
Walker,  2  Iowa  504. 

A  copartnership  was  established  be- 
tween four  persons  in  order  to  purchase 
Cherokee  lands,  and  to  work  them  for 
mining,  &c.  One  of  the  specifications 
in  the  articles  of  copartnership  was  that 
such  disposition  was  to  be  "  made  of 
their  property  as  a  majority  should 
deem  advisable."  Two  of  the  partners 
became  insolvent,  and  a  third  nearly  so, 
and  all  three  abandoned  the  work  and 
neglected  to  pay  the  instalments  of  the 
purchase  money,  leaving  the  whole  bur- 
den upon  the  fourth  partner.  Held, 
that  neither  of  the  first  three  partners 
had  a  right  to  complain  in  equity  that 
the  fourth  partner,  in  order  to  relieve 
his  sureties,  had  disposed  of  the  land  at 
a  fair  price  without  the  concurrence  of 
a  majority,  especially  as  to  a  bona  fide 
purchaser,  and  without  notice,  for  value, 
from  such  fburth  partner;  all  they  could 
ask  being  an  account  from  the  fourth 
partner.  Ehea  v.  Vannoy,  1  Jones  (N, 
C.)  Eq.  283 ;  Id.  290. 


535 


315*  POWER    OF    MAJORITY.  [BOOK    III., 

when  they  are  met  together,  tlicy  may,  after  due  consideration, 
think  proper  to  negative.  For  a  majority  of  partners  to  say,  'We 
do  not  care  M'hat  one  partner  may  say  ;  we,  being  the  majority,  will 
do  what  we  please,'  is,  I  apprehend,  what  a  court  of  equity  will  not 
allow."  (.^•) 

Majorities  at  meetings. — Moreover,  where  powers  are  conferred 
on  a  majority  present  at  a  meeting  of  not  less  than  a  certain  num- 
ber of  persons,  unless  such  meeting  be  duly  convened  and  the  re- 
quisite number  be  present  at  the  meeting,  the  powers  in  question 
cannot  be  exercised ;  and  although  it  may  be  true  that  the  required 
number  of  persons  was  summoned,  and  that  the  absentees  could  not 
have  turned  the  scale,  this  will  not  render  valid  the  acts  of  the  ma- 
jority of  those  actually  present,  for  that  is  not  such  a  majority  as 
was  originally  contemplated,  (^y) 

2.  Disputes  on  matters  involving  a  change  in  the  nature  of  the 
business. — Passing  now  to  the  second  class  of  differences,  viz.,  those 
wdiich  relate  to  matters  with  which  the  partnership  was  never  in- 
tended to  concern  itself,  it  has  been  over  and  over  again  decided 
that  no  majority,  however  large,  can  lawfully  engage  the  partner- 
ship in  such  matters  against  the  will  of  even  one  dissentient 
partner. 

One  dissentient  can  forbid  a  change. — Each  partner  is  entitled 
to  say  to  the  *others,  "  I  became  a  partner  in  a  concern 
-^  formed  for  a  definite  purpose,  and  upon  terms  which  were 
agreed  upon  by  all  of  us,  and  you  have  no  right,  without  my  con- 
sent, to  engage  me  in  any  other  concern,  nor  to  hold  me  to  any 
other  terms,  nor  to  get  rid  of  me,  if  I  decline  to  assent  to  a  varia- 
tion in  the  agreement  by  which  you  are  bound  to  me  and  I  to 
you."  Nor  is  it  at  all  material  that  the  new  business  is  extremely 
profitable.  (2) 

In  companies  as  ivell  as  in  pai'tner ships. — This  principle  is  ap- 
plicable to  all  partnerships  and  companies,  whether  great  or  small, 

(z)  Const  V.  Harris,  Turn.  &  R.  525,  223 ;  Howbeach   Coal  Co.  v.  Teague,  5 

and  see  Id.  518,  and  Blisset  v.  Daniel,  10  Hurlst.  &  N.   151 ;  Ex  parte  Morrison, 

Hare  493 ;  Great  Western  Rail.  Co.  v.  De  G.  539. 

Eushout,  5  De  G.  &  S.  310.  [z]  Attorney-General  v.  Great  North- 

(3/)  See   Re    London    and    Southern  ern  Rail.  Co.,  1  Drew.  &  S.  154. 
Counties  Freehold  Land  Co.,  31  Ch.  D. 

536 


CHAP.  II.,  §  III.]   MATTERS   AVITHIN   SCOPE   OF   BUSINESS.  316* 

and  is  evidently  one  which  requires  only  to  be  stated  to  be  at  once 
assented  to  as  being  just.  No  cases  upon  this  subject  can  be  re- 
ferred to  with  greater  advantage  than  Natusch  v.  Irving  and  Const 
V.  Harris,  both  of  which  were  decided  by  Lord  Eldon.  (a) 

Fire  and  life  insurance  company  turning  into  a  maritime  insur- 
ance company. — In  Natusch  v.  Irving  (6)  a  company  was  formed,  in 
the  early  part  of  the  year  1824,  for  granting  fire  and  life  assurances. 
The  capital  was  £5,000,000,  divided  into  .fifty  thousand  £100 
shares.  The  plaintiff  was  one  of  the  original  subscribers,  and  held 
fifteen  shares,  in  respect  of  v/hich  he  had  paid  the  required  deposit, 
but  he  had  not  executed  the  company's  deed  of  settlement.  In 
conformity  with  the  rules  of  the  company,  he  had  effected  a  policy 
with  it  on  his  life  for  £1500.  In  the  summer  of  1824,  the  act  of 
Q  Geo.  L,  prohibiting  companies  from  carrying  on  the  business  of 
marine  insurance,  was  repealed,  and  shortly  afterwards  advertise- 
ments appeared  in  the  newspapers,  stating  that  the  company  would 
commence  the  business  of  marine  insurance.  The  plaintiff,  in 
answer  to  an  inquiry  whether  this  announcement  was  authorized 
by  the  directors,  was  informed  that  it  was,  and  that  if  he  objected 
to  the  course  about  to  be  pursued,  he  might  receive  back  his  de- 
posit, with  interest,  and  have  his  policy  canceled  and  the  premium 
returned.  In  reply  to  this,  the  plaintiff  stated  that  he  was  ready 
to  execute  any  deed  which  was  in  conformity  with  the  prospectus ; 
that  he  conceived  it  competent  for  him  to  insist  that  the  business 
in  which  he  was  a  partner  should  be  carried  *on  accord-  ^ 

ing  to  the  agreement  which  united  the  partners  together ;  '- 
that  he  could  not  think  his  doing  so  would  entitle  the  managers 
of  that  partnership  to  pay  him  out  his  capital  and  deprive  him 
of  a  share  in  a  concern  of  which  he  had  the  highest  opinion ;  that 
he  therefore  required  the  directors  to  abstain  from  any  contracts  or 
engagements  relating  to  marine  insurance,  as  not  being  contem- 
plated by  himself  and  those  who  joined  the  company  upon  the 
terms  of  the  prospectus,  and  that  he  required  an  undivided  atten- 

(a)  See,  too,   Davies   v.   Hawkins,   3        (6)  Gow  on  Partnership  (3d  ed.),  App. 

Mau.  &  S.  488 ;  Fennings  v.  Grenville,  398.     See,  also,  The  Phoenix  Life   In- 

1  Taunt.  241 ;  Glassington  v.  Thwaites,  surance  Co.,  2  Johns.  &  H.  441. 
1  Sim.  &  S.  131. 

537 


317*  POWER   OF   MAJORITY.  [bOOK   III., 

tion  on  the  part  of  the  directors  to  the  objects  defined  therein.  The 
plaintiff  afterwards  attended  at  the  office  of  the  company  to  execute 
its  deed  of  settlement,  but  finding  that  it  contained  provisions  en- 
abling the  company  to  carry  on  the  business  of  marine  insurance^ 
he  refused  to  execute  it,  as  not  being  conformable  to  the  terms  on 
which  the  company  was  formed.  In  pursuance  of  the  advertise- 
ments, the  company  had  commenced,  and  it  was  carrying  on  the 
business  of  marine  insurance ;  but  there  was  no  evidence  to  show 
acquiescence  on  the  part  of  the  plaintiff,  and  there  was  evidence 
to  show  continued  opposition  by  him  to  the  carrying  on  of  such 
business.  The  plaintiff  applied  for  an  injunction  to  restrain  the 
directors  from  effecting  marine  insurances,  and  an  injunction  was 
granted,  (c)  The  judgment  of  Lord  Eldon,  as  far  as  it  relates  to 
the  power  of  a  majority,  is  particularly  valuable,  and  the  follow- 
ing extracts  from  it  are  constantly  referred  to: 

Answer  to  objection  that  dissentient  can  retire. — With  respect  to  the  liberty  given 
to  the  plaintiff  to  retire,  his  lordship  said  :  "An  offer  is  made  to  the  plaintiff  that 
he  may  receive  back  his  deposit,  with  interest  from  the  date  of  the  payment,  and 
he  is  desired  to  consider  himself  as  having  received  notice  thereof.  But  it  is  not, 
I  apprehend,  competent  to  any  number  of  persons  in  a  partnership  (unless  they 
show  a  contract  rendering  it  competent  to  them)  formed  for  specified  purposes,  if 
they  propose  to  form  a  partnership  for  very  different  purposes,  to  effect  that  forma- 
tion by  calling  upon  some  of  their  partners  to  receive  their  subscribed  capital  and 
interest  and  quit  the  concern  ;  and  in  effect,  merely  by  compelling  them  to  retire 
upon  such  terms,  so  as  to  form  a  new  company.  This  would,  as  to  partnerships, 
^oio-i  be  a  most  dangerous  doctrine.  *  Where  a  partnership  is  dissolved  (even 
where  it  can  be  in  a  sense  dissolved  the  instant  after  notice  to  dissolve  is 
given,  if  there  be  no  contract  to  the  contrary),  it  must  still  continue  for  the  pur- 
pose of  winding  up  its  affairs,  of  taking  and  settling  all  its  accounts,  and  convert- 
ing all  the  property,  means  and  assets  of  the  partnership,  existing  at  the  time  of 
the  dissolution,  as  beneficially  as  may  be,  for  the  benefit  of  all  who  were  partners, 
according  to  their  respective  shares  and  interests ;  and  the  other  partners  cannot 
say  to  him  to  whom  they  have  given  an  offer  of  his  deposit  and  interest,  'Take 
that,  and  we  are  a  new  company,'  keeping  the  effects,  means,  assets  and  property 

(c)  The  bill  was  filed  by  the  plaintiff,  effecting  marine  insurances  in  the  nam) 

on  behalf  of  himself  and  all  others  the  and   on  account  of  the   company,  and 

Bhareholders  of  the  company,  against  the  from  using  the  name,  and  from  apply- 

directors,  and  prayed  a  dissolution,  and,  ing  the  capital  of  the  company  for  such 

if  necessary,  a  receiver,  and  an  injunc-  purposes. 
tion   to  restrain   the    defendants    from 

538 


CHAP.  II.,  §  III.]  POWER    OF    MAJORITY.  318* 

of  the  eld,  as  the  property  of  the  new  partnersliip.  The  company  will  indemnify 
the  plaintifF  against  loss  by  its  transactions  already  had,  or  hereafter  to  be  had, 
not  for  the  specified  purposes  of  the  institution.  But  the  right  of  a  partner  is  to 
hold  to  the  specified  purposes  his  partners  whilst  the  partnership  continues,  and 
not  to  rest  upon  indemnities  with  respect  to  what  he  has  not  contracted  to  engage 
in.  A  dissatisfied  partner  may  sell  his  shares  for  double  what  he  originally  gave 
for  them.  But  he  cannot  be  compelled  to  part  with  them  for  that  reason ;  it  may 
be  his  principal  reason  for  keeping  them,  having  the  partnership  concern  carried 
on  according  to  the  contract.  The  original  contract  and  the  loss  which  his  part- 
ners would  suffer  by  a  dissolution,  is  his  security  that  it  shall  be  so  carried  on  for 
him  and  them  beneficially,  and  with  augmented  improvement  in  the  value  of  his 
shares  and  their  shares." 

Ansiver  to  argument  that  the  change  was  warranted  by  statute. — With  respect  to  the 
alteration  of  the  law  enabling  companies  to  carry  on  the  business  proposed,  his 
lordship  observed :  "  The  repeal  of  the  act  6  Geo.  I.,  which  merely  made  it  lawful 
for  societies  or  partnerships,  however  numerous  their  members  might  be,  to  insure 
against  marine  risks,  could  not  make  it  lawful  for  companies  or  societies,  which 
were  formed  for  specified  purposes  of  insurance  upon  lives  and  against  fire,  to 
insure  against  marine  risks,  unless  the  contracts  by  which  such  companies  were 
formed,  either  expressly  or  impliedly  (where  individual  partners  did  not  consent 
to  embarking  in  new  projects,  either  originally,  or  subsequently  to  the  formation 
of  the  companies),  created  an  authority  in  some  part  of  the  body  to  bind  all  the 
body  to  the  adoption  of  such  new  undertakings." 

Observations  on  powers  of  majorities.—With  respect  to  the  power  of  a  majority^ 
his  lordship  laid  it  down  that  if  six  persons  joined  in  a  partnership  of  life  as- 
surance, it  seems  clear  that  neither  the  majority  nor  any  select  part  of  them,  nor 
five  out  of  the  six,  could  engage  that  partnership  in  marine  insurances,  unless  the 
contract  of  partnership  expressly  or  impliedly  gave  that  power ;  because  if  this- 
was  otherwise,  an  individual  or  individuals,  by  engaging  in  one  specified  concern, 
might  be  implicated  in  any  other  concern  whatever,  however  different  in  its 
nature,  against  his  consent.  But  if  a  part  of  the  six  openly  and  publicly  professed 
their  intention  to  engage  the  partnership  in  another  concern,  and  clearly  and  dis- 
tinctly brought  this  to  the  knowledge  of  one  or  more  of  the  other  partners,  and 
such  one  or  more  of  the  other  partners  could  be  clearly  shown  to  have  acquiesced 
in  such  intention,  and  to  have  permitted  the  other  partners  to  have  entered  upon, 
and  to  have  engaged  themselves  and  the  body  in  such  new  projects,  and  thereby  to 
have  placed  their  partners  so  engaged  in  difficulties  and  embarrassments  unless 
they  were  permitted  to  proceed  in  the  further  execution  of  such  projects,  if  a  court 
of  equity  would  not  go  the  length  of  holding  that  such  conduct  was 
*consent,  it  would  scarcely  think  parties  so  conducting  themselves  entitled  L 
to  the  festinum  remedium  of  injunction.  *  *  *  Courts  must  struggle  to  pre- 
vent particular  members  of  those  bodies  from  engaging  other  members  in  pro- 
jects in  which  they  have  not  consented  to  be  engaged,  or  the  engaging  in  which 
they  have  not  encouraged,  assented  to,  or  empowered,  or  acquiesced  in,  expressly 
or  tacitly,  so  as  to  make  it  not  equitable  that  they  should  seek  to  restrain  them. 
The  principles  which  a  court  would  act  upon  in  the  case  of  a  partnership  of  six,. 

539 


319*  POWER   OF    MAJORITY.  [bOOK    III., 

must,  as  far  as  the  nature  of  things  will  admit,  be  applied  to  a  partnership  of  six 
hundred.  *  *  *  They  who  seek  to  embark  a  partner  in  a  business  not  origi- 
nally part  of  the  partnership  concern,  must  make  out  clearly  that  he  did  expressly 
or  tacitly  acquiesce." 

Altering  lyrinciple  on  which  profits  should  he  dealt  ivith. — In  Const 
V.  Harris  (cZ)  the  proprietors  of  Covent  Garden  Tiieatre  agreed  that 
the  profits  should  be  exclusively  appropriated  to  certain  definite 
purposes.  Afterwards,  the  proprietors  of  seven  out  of  eight  shares 
entered  into  an  agreement  to  apply  the  profits  in  a  different  manner, 
but  they  had  not  consulted  the  owner  of  the  other  eighth  share,  and 
he  disapproved  of  the  alteration.  It  was  held  by  Lord  Eldon  that 
the  majority  had  no  power  to  depart  from  the  terms  of  the  original 
agreement ;  and  upon  a  bill  filed  by  the  one  dissentient  partner  for 
a  specific  performance  of  that  agreement,  a  receiver  of  the  profits  was 
appointed.  In  a  long  and  elaborate  judgiuent,  Lord  Eldon  distinctly 
recognized  the  principle  that  articles  which  had  been  agreed  on  to 
regulate  a  partnership  cannot  be  altered  without  the  consent  of  all 
the  partners,  (e) 

In  modern  times  the  same  principle  has  been  constantly  recognized 
and  followed.  Indeed,  it  is  never  now  disputed,  although  its  appli- 
cation frequently  gives  rise  to  controversy.  The  decisions  bearing 
on  this  subject  relate,  however,  to  companies,  and  are  not,  therefore, 
further  noticed  in  the  present  treatise.  (/) 

(d)  Turn.  &  R.  496.  the  writer  has  not  felt  it  necessary  to 

(e)  See  Turn.  &   R.  517,  523.     The   make  extracts  from  it. 

whole  judgment  is  well  worthy  of  atten-  (/)  Auld  v.  Glasgow  Working  Men's 
tive  perusal ;  but  being  much  to  the  Building  Soc,  12  App.  Cas.  197,  is  one 
same  effect  as  that  in  Natusch  v.  Irving,    of  the  most  recent  cases. 

540 


CHAP.  III.]  CAPITAL   OF   PARTNERSHIPS.  320'' 


*320]  *CHAPTER  III. 

OF  THE   CAPITAL   OF   PARTNERSHIPS. 

Capital  of  partnerships. — By  the  capital  of  a  partnership  is 
meant  the  aggregate  of  the  suras  contributed  by  its  members  for 
the  purpose  of  commencing  or  carrying  on  the  partnership  busi- 
ness, and  intended  to  be  risked  by  them  in  that  business.  The 
capital  of  a  partnership  is  not  therefore  the  same  as  its  property. 
The  capital  is  a  sum  fixed  by  the  agreement  of  the  partners,  whilst 
the  actual  assets  of  the  firm  vary  from  day  to  day,  and  include 
everything  belonging  to  the  firm  and  having  any  money  value. 
Moreover,  the  capital  of  each  partner  is  not  necessarily  the  amount 
due  to  him  from  the  firm,  for  not  only  may  he  owe  the  firm  money, 
so  that  less  than  his  capital  is  due  to  him,  but  the  firm  may  owe 
him  money  in  addition  to  his  capital ;  e.  g.,  for  money  advanced  by 
him  to  the  firm  by  way  of  loan,  and  not  intended  to  be  wholly 
risked  in  the  business.  The  distinction  between  a  partner's  capital 
and  what  is  due  to  him  for  advances  by  way  of  loan  to  the  firm,  is 
frequently  very  material ;  e.  g.,  with  reference  to  interest — with 
reference  to  clauses  in  partnership  articles  fixing  the  amount  of 
capital  to  be  advanced  and  risked,  and  prohibiting  the  withdrawal 
of  capital ;  and,  above  all,  with  reference  to  priority  of  payment  in 
the  event  of  dissolution  and  a  deficiency  of  assets,  {a)  The  amount 
of  each  partner's  capital  ought,  therefore,  always  to  be  accurately 
stated,  in  order  to  avoid  disputes  on  a  final  adjustment  of  account  j 
and  this  is  more  important  where  the  capitals  of  the  partners  are 
unequal,  for  if  there  is  no  evidence  as  to  the  amounts  contributed 
by  tliem,  the  shares  of  the  whole  assets  will  be  treated  as  equal.  (6)  1 

(a)  See,  on   this  subject,  infra,  book  paying  it  in,  may  be  proved  by  other 

III.,  ch.  8,  §  1,  on  partnership  accounts,  evidence  than  the  articles  of  copartner- 

(6)  See,  as  to  the  equality  of  shares,  ship.      Boyers    v.    Elliott,    7    Humph, 

mfra,  book  III.,  ch.  5,  I  2.  (Tenn.)  204. 

1.  Capital  of  partnerships. — The  A  note  given  by  a  partner  to  his  co- 
amount  of  capital  furnished  by  each  partner,  as  collateral  security  for  the 
partner  in  a  firm,  and  the  manner  of  capital  advanced  by  the  latter,  is  with- 

541 


321= 


CAPITAL   OF   PARTXERSHIPS. 


[book   III. 


"^Increase  and  diminution  of  capital. — Wlien  the  agreed 


[*321 


amount  of  capital  of  a  partnership  has  been  exhausted  and 
the  business  cannot  ha  carried  on  to  a  profit,  the  partnership  may 
be  dissolved,  as  will  be  pointed  out  hereafter,  (c)  A  partner  cannot 
be  compelled  to  furnish  more  capital  than  he  has  agreed  to  bring 
in  and  risk,  although  he  cannot,  by  limiting  the  amount  of  his 
capital,  limit  his  liability  for  debts  incurred  by  the  firm.(cZ)  On 
the  other  hand,  a  partner  who  has  agreed  to  furnish  a  certain 
amount  of  capital  is  bound,  not  only  to  bring  it  into  the  firm,  but 
also  to  leave  it  in  the  business  until  the  firm  is  dissolved. 

It  follows  from  these  considerations  that  the  agreed  capital  of  a 
partnership  cannot  be  either  added  to  or  withdrawn  except  with 
the  consent  of  all  the  members  of  the  partnership,  (e)  and  this  rule 
is  perfectly  consistent  with  the  obvious  fact  that  the  assets  and  lia- 


out  consideration  to  support  it.  Stafford 
V.  Fargo,  35  111.  481. 

An  incoming  partner  paid  the  two 
original  members  of  the  firm  money  as 
indicated  in  the  receipt :  "  Received  of 
E.  $2000  for  and  in  consideration  of  one- 
half  interest  in  one  safe,  two  desks,  two 
pair  of  scales,  one  stove  and  pipe ;  also 
the  undivided  half  of  our  trade  and 
good  will,  and  the  benefit  accruing 
therefrom  ;  also  one-half  of  the  contract 
of  potatoes  for  future  delivery,  and  the 
benefits  of  the  same,  as  per  contract  of 
copartnership  made  this  date  between 
H.  E.  &  M."  Held,  that  the  money  so 
paid  belonged  to  the  two  original  part- 
ners, especially  if  it  was  credited  on  the 
books,  in  equal  amounts,  to  their  stock 
account.     Evans  v.  Hansen,  42  111.  234. 

Where,  in  a  suit  for  a  dissolution  of  a 
partnership,  it  appeared  that  there  was 
a  mistake  as  to  the  amount  of  capital 
put  in  by  the  complainants,  and  it  ap- 
peared that  more  was  put  in  than  was 
originally  stated,  but  how  much  more 
was  uncertain,  it  was  held  that  the 
burden  of  proof  was  upon  them,  and 
that   they  should  be   restricted   to   the 


smallest  amount  proved,  especially  as 
one  of  the  complainants  was  the  book- 
keeper, and  should  have  kept  the  books 
so  as  to  show  the  true  state  of  the  affairs. 
Moon  V.  Story,  8  Dana  (Ky.)  226. 

A  partnership  consisting  of  four  part- 
ners was  dissolved,  two  assigning  their 
shares  to  one  of  the  others,  and  the  re- 
maining two  formed  a  new  partnership. 
]n  their  articles  they  agreed  that  of  the 
property  on  hand  a  sufficient  amount 
should  be  set  apart  and  appropriated  to 
paying  the  debts  of  the  old  firm,  and 
another  amount  for  improvements  made 
on  real  estate,  and  that  the  remainder 
should  be  deemed  the  capital  stock  of 
the  firm.  Held,  that  the  amount  set 
apart  for  improvements  made  on  real 
estate  did  not  make  a  part  of  the  capital 
stock.  Mathers  v.  Patterson,  33  Pa.  St. 
485. 

(c)  Infra,  book  IV.,  ch.  1,  §  2. 

{d)  Ante  p.  -200. 

(e)  See  Heslin  v.  Hay,  15  L.  R.,  Ir. 
431,  where  an  attempt  was  made  to  vio- 
late this  rule ;  and  see  the  observations 
of  Lord  Bramwell  in  Bouch  v.  Sproule, 
12  App.  Cas.  405. 


542 


CHAP.  III.]  CAPITAL   OF   PAETNEESHIPS.  321* 

bilities  of  a  partnership  are  necessarily  liable  to  fluctuation,  and 
that  the  value  of  each  partner's  share  of  such  assets  constantly 
fluctuates  also. 

Borrowing  money  and  increasing  capital. — The  difixirence  be- 
tween borrowing  money  on  the  credit  of  a  firm  and  increasing  its 
capital  has  been  already  adverted  to,(/)  and  it  has  been  seen  that 
although  each  member  of  an  ordinary  trading  partnership  can 
pledge  its  credit  for  money  borrowed  in  order  to  carry  on  its  busi- 
ness, he  cannot  render  it  liable  to  repay  money  borrowed  by  him 
to  enable  him  to  furnish  the  amount  of  capital  which  he  has  agreed 
to  bring  in.  (^) 

(/)  Ante  pp.  *132,  *133.  (g)  lb. 

543 


322*  PARTNERSHIP  PROPERTY.        [bOOK  HI., 

*322]  *CHAPTER  IV. 

OF   JOINT   AND   SEPARATE  PROPERTY. 


Section  I.— Op  Joint  Estate,  *323. 
Section  II. — Separate  Estate,  *327. 

Section  III. — Conversion  of  Joint  Estate  into  Separate  Estate, 
and  Vice  Versa,  *334. 


Partnership  property. — The  expressions  "  partnership  propei'ty," 
"partnership  stock,"  "partnership  assets,"  "joint  stock"  and  "joint 
estate,"  are  used  indiscriminately  to  denote  everything  to  which  the 
firm,  or,  in  other  words,  all  the  partners  composing  it,  can  be  con- 
sidered to  be  entitled  as  such.  («)  The  qualification  as  such  is 
important,  for  persons  may  be  entitled  jointly  or  in  common  to 
property,  and  the  same  persons  may  be  partners,  and  yet  that 
property  may  not  be  partnership  property ;  e.  g.,  if  several  persons 
are  partners  in  trade,  and  land  is  devised  or  a  legacy  is  bequeathed 
to  them  jointly  or  in  common,  it  will  not  necessarily  become  part- 
nership property  and  form  part  af  the  common  stock  in  which 
they  are  interested  as  partners.  (6)  Whether  it  does  so  or  does  not, 
depends  upon  circumstances  which  will  be  examined  hereafter. 

Importance  of  distinguishing  partnership  proj)erty  from  the  sepa- 
rate property  of  the  partners. — It  is  often  a  difficult  matter  to  de- 
termine what  is  to  be  regarded  as  partnership  property  and  what 
is  to  be  regarded  as  the  separate  property  of  each  partner.  The 
question,  however,  is  of  importance,  not  only  to  the  partners  them- 
selves, but  also  to  their  creditors ;  for,  as  will  be  seen  hereafter,  if  a 

(a)    The   expression    "joint  estate"  (6)  Morris  f.  Barrett,  3  You.  ^S:  J.  384, 

sometimes    has    a    wider    signification,  and  see  the  judgment  in  Ex  parte  The 

including    all    property  which,  on   the  Fife  Banking  Co.,  6  Ir.  Eq.  197;  S.  C. 

bankruptcy  of  the  firm,  is  distributable  on  appeal,  under  the  name  of  Ke  Littles^ 

amongst  its  creditors.  See  post  book  IV.,  10  Id.  275. 
ch.  4,  §  3,  "  Keputed  Ownership." 

544 


CHAP.  IV.,  §  I.]  JOINT   PROPERTY.  322* 

firm  becomes  bankrupt,  the  property  of  the  firm  and  the  separate 
property  of  each  partner  have  to  be  distinguished  from  each  other, 
it  being  a  rule  to  apply  the  property  of  the  firm  in  the  first  place 
in  payment  of  the  creditors  of  tiie  firm,  and  to  apply  the  separate 
properties  of  the  partners  in  the  first  place  to  the  payment  of  their 
respective  separate  creditors.l 

*It  is  proposed,  therefore,  to  examine  the  rules  by  which   p^oQ.o 
to  determine  what  is  the  property  of  the  firm,  and  what   '■ 
the  separate  property  of  its  members. 

Question  determined  hy  agreement. — It  is  for  the  partners  to  de- 
termine by  agreement  amongst  themselves  what  shall  be  the  prop- 
erty of  them  all  and  what  shall  be  the  separate  property  of  some 
one  or  more  of  them.  Moreover,  it  is  competent  for  them  by 
agreement  amongst  themselves  to  convert  what  is  the  joint  prop- 
erty of  all  into  the  separate  property  of  some  one  or  more  of  them, 
and  vice  versa.^  The  determination,  therefore,  of  the  question, 
\Yhat  is  and  what  is  not  the  property  of  the  firm?  involves  an 
inquiry  into  the  three  following  subjects,  viz. : 

Joint  estate. 

Separate  estate. 

Conversion  of  one  into  the  other. 
Each  of  these  will  be  examined  in  order. 


SECTION   I. — OF   JOINT   ESTATE. 


1.  Property  of  the  firm. — Whatever,  at  the  commencement  of  a 
partnership,  is  thrown  into  the  common  stock,  and  whatever  has 
from  time  to  time  during  the  continuance  of  the  partnership  been 

1.  Partnership  property  distin-  net  profits,  the  property  is  not  firm  prop- 

guished    from    separate    property. —  erty,  and  may  be  seized  and  sold  for  the 

Wliere   one   partner   furnishes   all   the  private  debt  of  the  one  who  contributed 

capital  and  owns  all  the  stock,  the  other  it.     Stuo^pt  i'.  Boaur,  76  Ind.  157. 

contributing   his  labor  and  experience,  2.  Question  determined   by  agree- 

and  having  a  "working  interest"  only,  ment. — Three    persons   agreed   to   buy 

receiving  for  his  services  a  share  of  the  cattle  on  t4ieir  separate  account,  the  cat« 

545  35 


323* 


PARTNERSHIP  PROPERTY. 


[book  III., 


added  thereto  or  obtained  by  means  thereof,  whether  directly  by 
purchase  or  cireuitously  by  employment  in  trade,  belongs  to  the 
firm,  unless  the  contrary  can  be  shown,  (c) 3 

Property  paid  for  by  the  jinn. — The  mere  fact  that  the  property 
in  question  was  purchased  by  one  partner  m  his  own  name  is  im- 
material, if  it  was  paid  for  out  of  the  partnership  moneys,  for  in 
such  a  case  he  will  be  deemed  to  hold  the  property  in  trust  for  the 
firm,  unless  he  can  show  that  he  holds  it  for  himself  alone.  (cZ) 
,  Upon  this  ^principle  it  is  held  that  land  purchased  in  the 

-^  name  of  one  partner,  but  paid  for  by  the  firm,  is  the  jirop- 
erty  of  the  firm,  although  there  may  be  do  declaration  or  memo- 
randum in  writing  disclosing  the  trust  and  signed  by  the  partner 
to  whom  the  land  has  been  conveyed,  (e)  So,  if  shares  in  a  com- 
pany are  bought  with  partnership  money,  they  will  be  partnership 
property,  although  they  may  be  standing  in  the  books  of  the  com- 
pany in  the  name  of  one  partner  only,  and  although  it  may  be 


tie  so  purchased  to  become  partnership  out  the  other  partner's  authority.   Euck- 

property  when  all  should  approve  of  the  man  v.  Decker,  8  C.  E.  Gr.  (N.  J.)  283. 
purchase.      Held,   that    until   such   ap-        One  of  two   partners  cannot  commit 

proval  neither  of  the  three  was  bound  larceny  or  burglary  as  to  the  property  or 

for  the  purchases  of  the  others.     Valen-  house  of  the  firm.     Alfele  v.  Wright,  17 

tine  V.  Hickle,  39  Ohio  St.  19.  Ohio  238. 

(c)  See  Crawshay  v.  Collins,  2  Russ.        A  partner  in  a  firm  engaged  in  pur- 

339,  as  to  the  patents  ;  Nerot  v.  Burnand,  chasing  live  stock  on  commission,  died 

4  Euss.  247,  and  2  Bligh  (N.  S.)  415 ;  Bone  after  certain  commissions  were  partly 

V.  Pollard,  24  Beav.  283.     See,  also,  as  earned.      The   surviving   partner   com- 

to  co-owners  of  mines  not  being  copart-  pleted  the  transactions  and  received  the 

ners,  Clegg  v.  Clegg,  3  GifF.  322.     As  to  money.     Held,   that  such   commissions 

outlays   of  partnership    money   on   the  should  be  treated  as  partnership  assets, 

separate    property  of  one    partner,   see  but  that  the  surviving  partner  was  enti- 

infra,  §  2.  tied  to  have  an  allowance  for  his  time 

3.  Property  of  the  firm,  generally. —  and  expenses  in  completing  the  trans- 

A  judgment  in  a  suit  by  two  for  a  tres-  actions.     Newell  v.  Humphrey,  37  Yt. 

pass  alleged  to  be  on  firm  property,  is  265. 

firm  assets.     Collins  v.  Butler,  14  Cal.        (d)  See  per  Lord  Eldon,  in  Smith  v. 

223.  Smith,  5  Ves.  193;  Eobley  v.  Brooke,  7 

"Where  a  firm  engaged  in  the  planting  Bligh  90 ;  Morris  v.  Barrett,  3  You.  &, 

and  selling  of  oysters,  closes  its  business,  ,1.  384.    See,  also,  Helmore  v.  Smith,  35 

one  partner  cannot  dispose  of  the  other's  Ch.  D.  436. 

share  in  the  planted  oysters  remaining        (e)  Forster  v.  Hale,  5  Ves.  308,  and 

in  the  beds  after  the  debts  are  paid,  with-  3  Id.  696. 

546 


CHAP.  IV.,  §  I.]  JOINT   PROPERTY.  324* 

contrary  to  the  company's  deed  of  settlement  for  more  than  ona 
person  to  hold  shares  in  it.  (/)  4 

Ships. — As  regards  ships,  there  was  often  a  difficulty  arising 
from  the  Ship  Registration  acts.  For  as  it  was  clearly  settled  that 
a  ship  belonged,  both  at  law  and  in  equity,  to  the  person  or  per- 
sons who  were  registered  as  her  owners,  and  to  no  one  else,  it  fol- 
lowed that  if  a  ship  had  been  bought  with  partnership  money,  had 
been  used  as  partnership  property,  and  had  always  been  treated  as 
such  by  all  the  partners,  yet  if  she  was  registered  in  the  name  of 
one  partner  only,  there  was  no  method  by  which  that  one  could  be 
prevented  from  effectually  asserting  an  exclusive  right  to  the  ship 
and  depriving  his  copartners  of  all  their  interest  in  her.  {g)  The 
provisions  of  the  present  Merchant  Shipping  acts  differ,  however, 
in  several  material  respects  from  the  enactments  previously  in 
force,  and  now,  in  the  case  above  supposed,  the  registered  partner 
would  be  deemed  a  trustee  for  the  firm.  (A) 

*  Cases  where  property  paid  for  by  the  firm  does  not  be-  r^ooK 
long  to  it. — Strong  as    is    the  presumption    that  what  is  '- 
bought  with  partnership  money  is  partnership  property,  the  pre- 

(/)  Ex  parte  Connell,  3  Deac.  201- ;  cle  by  the  author  in  the  Law  Magazine 

Ex  parte  Hinds,  3  De  G.  &  S.  613.  for  May,  1862  (vol.  XIV.,  p.  70,  N.  S.) 

4.  Property  paid  for  by  the  firm. —  If  a  ship  was  registered  in  the  name  of 

Land  purchased  by  one  partner,  in  his  two  partners,  the  shares  in  which  they 

own  name,  with  partnership  funds,  will  were  interested  might  have  been  shown, 

not  be  deemed  joint  estate  in  a  court  of  See  Ex  parte  Jones,  4  Mau.  &  S.  450. 

law.     Pitts  V.  Waugh,  4  Mass.  424.     S.  As  to  the  right  of  one  partner  to  sell  or 

P.,  Goodwin  v.  Kichardson,  11  Id.  475.  mortgage  a  ship  belonging  to  the  firm, 

If  a  person  buys  goods  for  a  firm  of  see  Ex  parte  Howden,  2  Mont.,  D.  &  D. 

which  he  is  a  member,  the  goods  bought  574. 

become  the  property  of  the  firm,  though        (h)  17  and  18  Vict.,  c.  104,  g§  37,  43, 

he   does   not   at  the  time  disclose  the  and  25  and  26  Vict.,  c.  63,  §  3.     Upon 

name  of  his  partner.     Scott  v.  McKin-  the  construction  of  the  former  act,  see 

ney,  98  Mass.  344.  Hughes  v.  Sutherland,  7  Q.  B.  D.  160; 

(gr)  See  Slacer  v.  Willis,  1  Beav.  354 ;  Liverpool  Borough  Bank  v.  Turner,  1 

Battersby  v.  Smyth,  3  Madd.  110;  Cam-  Johns.  &  H.  159,  and  2  De  G.,  F.  &  J. 

den  V.  Anderson,  5  T.  R.  709 ;    Curtis  v.  502.     A  ship  may  be  registered  in  the 

Perry,  6  Ves.  739 ;  Ex  parte  Yallop,  15  name  of  a  company,  though  some  of  its 

Ves.  60 ;  Ex  parte  Houghton,  17  Ves.  members  are  foreigners.    See  17  and  18 

251 ;  and  as  to  the  old  law  relating  to  Vict.,  c.  104,  ^  18 ;  and  E.  v.  Arnaud,  9 

equitable  interests  in  ships,  see  an  arti-  Q.  B.  806. 

547 


325*  PARTNERSHIP  PROPERTY.         [bOOK  III., 

suraption  may  be  rebutted ;  e.  g.,  by  showing  that  the  money  was 
lent  by  the  firm  to  one  partner,  and  so  was  not  in  fact  partnership 
money  when  invested,  (i)  Moreover,  it  is  to  be  observed  that  prop- 
erty which  has  been  used  and  treated  as  partnership  property  cannot 
be  presumed  to  belong  to  one  partner  only,  simply  because  he  paid  for 
it,  for  the  presumption  in  such  a  case  is  rather  that  the  property  in 
question  was  his  contribution  to  the  common  stock.  (J)  This  sub- 
ject will  be  adverted  to  more  at  length  in  the  next  section. 

Secret  benefits  obtained  by  one  partner. — It  has  been  already  seen 
that  one  partner  will  not  be  allowed  to  retain  for  his  own  exclusive 
benefit  any  property  which  he  may  have  acquired  in  breach  of  that 
good  faith  which  ought  to  regulate  the  conduct  of  partnei's  inter  se. 
Whatever  property  has  been  so  acquired  will  be  treated  as  obtained 
for  the  benefit  of  all  the  partners,  and  as  being  part  of  the  assets 
of  the  firm ;  and  this  rule  applies  to  property  obtained  by  a  con- 
tinuing or  surviving  partner  in  breach  of  the  good  faith  which  he 
is  bound  to  exercise  towards  a  retired  partner,  and  the  representa- 
tives of  a  deceased  partner,  so  long  as  their  interest  in  the  partner- 
ship assets  continues,  {k) 

Money  paid  to  one  partner  for  his  exclusive  benefit. — At  the  same 
time,  if  an  advantage  which  has  been  obtained  by  a  partner  is 
wholly  unconnected  with  the  partnership  affairs,  or,  being  con- 
nected with  them,  has  been  conferred  upon  him  with  a  view  to  his 
own  personal  benefit,  he  cannot  be  called  upon  to  account  for  it 
to  the  partnership.  For  example,  where  a  ship,  belonging  to  a 
Frenchman  and  two  Americans,  as  partners,  was  captured  by  a 
British  cruiser,  and  compensation  was  made  to  the  Americans,  but 
to  them  only,  the  Frenchman  being  expressly  excluded,  it  was  held 
that  the  sum  awarded  to  the  Americans  belonged  to  them  alone, 
and  that  the  Frenchman  had  no  interest  in  it.  (^)  So,  if  one  part- 
^  -.  ner  is  *the  lessee  of  property  to  which  the  firm  is  only 
■^  entitled  so  long  as  the  partnership  continues,  and  on  the 
dissolution  of  the  partnership  the  lease  is  sold  or  renewed,  the 

(i)  As  in  Smith  v.  Smith,  5  Ves.  193.  per  Sir  J.  Cross. 

See,  also,  Walton  v.  Butler,  29   Beav.  (k)  See  ante  p.  *305,  et  seq. 

428;  Ex  parte  Emly,  1  Rose  64.  (l)  Campbell   v.   Mullett,   2    SwansL 

(j)  See  Ex  parte  Hare,  1   Deac.  25,  551.    See,  also,  Biirnand  t».  Rodocanachi^ 

o48 


CHAP.  lY.,  §  I.]  JOINT   PROPERTY.  326* 

price  of  the  sold  lease,  or  the  renewed  lease,  as  the  case  may  be, 
will  belong,  not  to  the  firm,  but  to  that  partner  in  whom  the  lease 
is  by  hypothesis  exclusively  vested,  (m) 

Property  acquired  after  dissolution. — As    regards    property  ac- 
quired after  a  dissolution,  but  before  the  affairs  of  a  dissolved 
partnership  have  been  wound  up,  such  property  is  not  necessarily 
to  be  considered  as  partnership  property,  even  though  the  partner 
acquiring  it  has  continued  to  carry  on  the  business  of  the  dissolved 
firm  without  the  consent  of  his  late  partners.     This  was  dedded  in 
Nerot  V.  Bernand.  {n)     In  that  case,  in  effect,  an  hotel  keeper  be- 
queathed his  business  to  his  son  and  daughter.     After  the  death 
of  the  testator,  the  daughter  continued  to  carry  on  the  business. 
She  afterwards  transferred  it  to  a  new  house  in  Clifford  street,  and 
this  house  was  conveyed  to  her  in  fee.     She  continued  to  carry  on 
the  business   there    for  some   time,  and    ultimately   she   married. 
During  the  greater  part  of  the  time  which  had  elapsed  since  the 
death  of  the  testator,  his  son  had  been  abroad,  and  on  his  return 
he  insisted  that  he  ought  to  be  considered  as  a  partner  with  his 
sister,  and  that  as  such  he  was  entitled  to  have  the  new  house  taken 
by  her,  and  all  the  stock  in  trade  and  effects  purchased  by  her  in 
order  to  carry  on  the   business,  treated  as  partnership  property. 
The  Vice  Chancellor  decided  that  the  testator's  son  and  daughter 
had  become  partners,  but  that  the  partnership  between  them  had 
been  dissolved  on  her  marriage.     He  also  held  that  the  new  house 
and  all  the  goods,  furniture,  plate,  linen,  china,  wines,  stock  in 
trade,  implements  and  other  effects,  being  in  and  about  the  prem- 
ises, formed  a  part  of  the  partnership  property.     Upon  appeal,  this 
decision  was  affirmed,  so  far  as  it  related  to  the  existence  and  subse- 
quent dissolution  of  partnership,  but  was  varied  so  far  as  it  related 
to  what  ought  to  be  considered  as  partnership  property,  p;;,.,^^ 
*Upon  this  head  the  Lord  Chancellor's  judgment  was  as  *-     "^ 
follows : 

7  App.  Cas.  333 ;  Thompson  v.  Kyan,  2  412  ;  affirmed  on  appeal,  4  De  G.,  F.  & 

Swanst.  565,  n ;  MofFatt  v.  Farquharson,  J.  42. 

2  Bro.  C.  C.  338.     See  the  note  on  this        (n)  4  Kuss.  247,  and  2  Bligh  (N.  S.) 

case  in  Belt's  edition  of  Brown's  Re-  215.     See,   too,   Payne   v.   Hornby,   25 

ports.  Beav.  280. 
(m)  See   Burdon   v.   Barkus,   3   Giff. 

549 


327*  PARTNERSHIP  PROPERTY.         [bOOK  III., 

"It  appears  to  rae  satisfactorily  made  out,  from  all  the  circumstances,  that  the 
house  in  CliflFord  street  was  bought  witli  the  partnership  property;  bongiit,  in  the 
first  instance,  partly  with  the  partnership  property,  partly  with  money  borrowed 
by  Miss  Nerot  and  afterwards  repaid  out  of  the  partnership  eflects,  and  partly 
upon  the  credit  of  the  house  that  belonged  to  the  partnership,  and  I  think  tliat 
part  of  the  Vice  Chancellor's  decree  by  which  he  directs  the  house  to  be  sold 
must  be  aflBrmed. 

"  There  is  a  part  of  the  decree,  however,  in  which  I  cannot  concur.  The  disso- 
lution of  the  partnership  took  place  in  September,  1819.  The  Vice  Chancellor 
has  directed  all  the  property  to  be  sold  which  was  in  the  house  in  Clifford  street 
at  the  time  when  the  decree  was  pronounced,  several  years  after  the  dissolution 
of  the  partnership,  as  if  all  the  property  which  at  the  time  of  the  decree  existed 
in  the  house  was,  without  inquiry,  to  be  considered  as  partnership  property. 
Lord  Eldon  doubted  greatly  whether  that  part  of  the  decree  could  be  sustained  ; 
and,  in  my  opinion,  it  must  be  varied  by  directing  the  master  to  take  an  account 
of  the  particulars  of  the  partnership  property  which  were  in  the  house  in  Clifford 
street  at  the  time  of  the  dissolution,  and  of  the  value  of  the  property  at  that 
time;  and  to  inquire  whether  any  part  of  that  property  still  remains  in  the 
house."  (o) 

Good  will — The  good  will  of  a  partnership,  in  so  far  as  it  has 
a  pecuniary  value,  is  partnership. property,  unless  the  contrary  can 
be  shown.  This  subject,  however,  will  be  more  conveniently  dis- 
cussed hereafter,  when  treating  of  partnership  articles,  {p)  5 

(o)  See,  also.  Ex  parte  Morley,  8  Ch.  estate.     Holden   v.   M'Makin,    1    Pars. 

1026,  where   a  surviving  partner  con-  (Pa.)  Sel.  Cas.  270. 

tinued  the  business,  sold  the  old  stock  Lord  Eldon,  in  Kennedy  v.  Lee   (3 

in  trade,  and  it  was  held  that  the  new  Mer.  441,  452),  speaking  on  this  subject, 

stock  in  trade  formed  part  of  his  sepa-  used  the  following  language :  "  Where 

rate  estate.  two    persons   are  jointly   interested   in 

(p)  See  infra,  book  TIL,  ch.  9,  §  2.  trade,  and  one  by  purchase  becomes  sole 

5.  Good  will. — A  transfer,  by  a  retir-  owner  of  the  partnership  property,  the 

ing  partner  to  the  other,  of  "  the  busi-  very    circumstance   of   sole    ownership 

ness  connections  and  patronage  belong-  gives   him   an    advantage   beyond    the 

ing   to   th-e  firm,"  may   be   deemed   to  actual  value  of  the  property,  and  which 

include  the  good  will  of  the  concern,  may  be  pointed  out  as  a  distinct  bene- 

Kellogg   V.   Totten,    16    Abb.    (N.   Y.)  fit,  essentially  connected  with  the  sole 

Pr.  3.5.  ownership.     In   the  case    of    the  trade 

The  subscription  list  of  a  newspaper  of  a  nurseryman,  for  instance,  the  mere 

published  by  more  than  one  proprietor  knowledge  of  the   fact  that  he  is  sole 

is  firm  property ;  and  when  one  of  the  owner  of  the  property,  and  in  the  sole 

partners  dies  it  does  not  survive  to  the  and  exclusive  management  of  the  con- 

Burviving  partner,  but  belongs  to,  or  is  cern,  gives  him  an  advantage  which  the 

to  be  administered  as  part  of  the  joint  other  partner,  supposing  him  to  carry 

550 


CHAP.  IV.,  §  II.]  SEPARATE   PROPERTY. 

SECTION    ir. SEPARATE   ESTATE. 


327* 


2.  PropeHy  of  the  individual  partners. — The  preceding  inquiry 
into  what  constitutes  the  property  of  the  firm  has  rendered  it  un- 
necessary to  inquire  at  length  into  what  constitutes  the  separate 
property  of  its  members.  A  few  additional  observations,  pointing 
out  the  danger  of  relying  too  much  on  circumstances  which  are 
often  regarded  as  decisive,  may,  however,  be  usefully  added.  6 


on  the  same  trade,  with  other  property, 
not  the  partnership  property,  would  not 
possess.  In  that  sense,  therefore,  the 
good  will  of  a  trade  follows  from,  and  is 
connected  with  the  fact  of  sole  owner- 
ship. There  is  another  way  in  which 
the  good  will  of  a  trade  may  be  rendered 
still  more  valuable  ;  as  by  certain  stipu- 
lations entered  into  between  the  parties 
at  the  time  of  the  one  relinquishing  his 
share  in  the  business  ;  as  by  inserting  a 
condition  that  the  withdrawing  partner 
shall  not  carry  on  the  same  trade  any 
longer,  or  that  he  shall  not  carry  it  on 
within  a  certain  distance  of  the  place 
where  the  partnership  trade  was  carried 
on,  and  where  the  continuing  partner  is 
to  carry  it  on  upon  his  own  sole  and 
separate  account.  Now  it  is  evident 
that  in  neither  sense  was  the  good  will 
of  this  trade  at  all  considered  as  among 
the  subjects  of  the  valuation  to  be  made 
by  either  party.  It  was  not  so  consid- 
ered by  the  plaintiff,  when  he  wrote  his 
letter  of  the  2 1st  of  October.  The  words 
'concern'  and  'inheritance'  are  used 
inartificially,  and  cannot  be  construed  as 
having  any  reference  but  to  the  actual 
subjects  of  valuation.  And  when  the 
plaintiff  offers  to  take  the  business  him- 
self, he  could  not  have  forgotten  that  the 
defendant's  own  estate  of  Butterwick  lay 
contiguous  to  the  partnership  property, 
and  therefore  his  introducing  no  stipu- 
lation, with  reference  to  the  fact  of  its 
contiguity,  is   a   clear    intimation    that 


when  he  wrote  this  letter  he  had  no  in- 
tention, in  offering  to  take  tiie  partner- 
ship property,  to  purchase  with  it  the 
good  will  in  the  sense  of  restricting  the 
defendant  from  carrying  on  the  trade  in 
its  vicinity.  In  that  sense  at  least,  there- 
fore, the  good  will  of  the  trade  was  not 
the  subject  of  contract,  or  treaty  even, 
between  the  parties." 

6.  Property  of  the  individual  part- 
ners.— Where  one  partner  takes  out  a 
■patent  in  his  individual  name,  and  never 
assigns  it  to  the  firm,  the  firm  can  lay 
no  claim  to  the  patent.  McWilliams 
Manuf.  Co.  v.  Blundell,  11  Fed.  Rep. 
419. 

A  patent  taken  out  by  one  partner  is 
not  firm  property  unless  assigned  to  the 
firm,  even  though  obtained  at  joint  ex- 
pense. McWilliams  Manuf.  Co.  v.  Blun- 
dell, 22  Pat.  Off.  Gaz.  177. 

An  entry  in  the  firm  books  made  by 
one  of  the  p.''.rtners  in  a  firm  which  runs 
a  saw  mill,  charging  himself  with  a  boat 
which  he  had  built  at  the  mill,  may  be 
introduced  by  him  as  evidence  inter  alia 
to  prove  that  the  boat  is  his  individual 
property.  Reno  v.  Crane,  2  Blackf. 
(Ind.)  217. 

Where  land  belonging  to  one  partner 
is  used  by  the  firm,  but  is  not  put  into 
the  actual  stock,  it  does  not  become 
partnership  property.  Gordon  v.  Gor- 
don, 49  Mich.  501. 

A  mortgage  given  by  one  partner  to 
the  other,  to  secure  a  balance  due,  is  not 


551 


328*  PARTNERSHIP  PROPERTY.         [bOOK  III., 

*That  ichich  produces  partnership  profits  may  belong  to 
-*  one  jyartner  only. — It  by  no  means  follows  that  persons 
who  are  partners  by  virtue  of  their  participation  in  profits  are  en- 
titled as  such  to  that  which  produces  those  profits.  For  example, 
coach  proprietors  who  horse  a  coach  and  divide  the  i)rofits  may 
each  make  use  of  horses  which  belong-  to  himself  alone  and  not 
to  the  firm  of  proprietors.  (5)  So,  where  a  merchant  employs  a 
broker  to  buv  goods  for  him  and  to  sell  them  ag-ain  on  his  account, 
although  it  may  be  agreed  that  the  profits  are  to  be  divided,  the 
goods  themselves,  and  the  money  arising  from  their  sale,  are  the 
property  of  the  merchant,  and  not  the  joint  property  of  himself 
and  the  broker ;(/-)  and  it  not  unfrequently  happens  that  dormant 
partners  have  no  interest  in  anything  except  the  profits  accruing  to 
the  firm  to  which  they  belong,  (s)  7 

Property  used  for  partnership  pt^iposes  not  necessarily  partner- 
ship piroperty. — Again,  it  by  no  means  follows  that  property  used 
by  all  the  partners  for  partnership  purposes  is  partnership  prop- 
erty. For  example,  the  house  and  land  in  and  upon  which  the 
partnership  business  is  carried  on  often  belongs  to  one  of  the  part- 
ners only,  either  subject  to  a  lease  to  the  firm,  or  without  any  lease 
at  all.(^)      So,  it  sometimes  happens,  though  less  frequently,  that 

a   partnership  asset.      Niagara   County  401;  Meyer  i>.  Sharp,  5  Taunt.  74 ;  Bur- 
Bank  V.  Lord,  33  Hun  (X.  Y.)  557.  nell  v.  Hunt,  5  Jur.  650,  Q.  B. 

Where  a  permanent  building  is  erec-  (s)  See  Ex  parte  Hamper,  17  Ves. 
ted  on  land  owned  by  one  partner,  who  404,  405 ;  Ex  parte  Chuck,  Mont.  373. 
holds  the  legal  title,  it  will  be  presumed  7.  That  which  produces  partner- 
to  be  his  separate  property,  though  used  ship  profits  may  belong  to  one  part- 
by  the  firm  as  its  place  of  business,  un-  ner  only. — If  partners,  by  arrangement 
less  it  be  shown  that  it  was  built  by  the  among  themselves,  own  each  a  separate 
firm  with  firm  assets,  or  contributed,  by  part  of  the  stock  in  trade  on  which  the 
the  partner  who  built  it,  to  the  capital  partnership  business  is  transacted,  the 
stock.  Goepper  v.  Kingsinger,  39  Ohio  stock  will  nevertheless  be  regarded  as 
St.  429.  partnership  property  for  the   payment 

{q)  As   in   Fromont   v.   Coupland,  2  of  partnership  debts,  at  least  as  to  credi- 

Bing.  170;  Barton  r.  Hanson,  2  Taunt,  tors  who  have  no  notice  that  the  stock 

49,  and  see  Wilson   v.  Whitehead,    10  is  owned  in  that  way.     Elliot  v.  Stevens, 

Mees.  &  W.  503,  as  to  an  author's  in-  38  N.  H.  311. 

terest  in  paper  supplied  for  his  work  to  {t)  See  Burdon  v.  Barkus,  3  Gifi".  412, 

the  publisher.  affirmed  on  appeal,  4  De  G.,  F.  &  J. 

(r)  Smith   v.  Watson,  2  Barn.  &   C.  42,  as  to  a  lease  of  a  coal  mine  ;  Ex 

552 


CHAP.  IV.,  §  II.]  SEPARATE    PPvOPERTY.  328* 

office  furniture,  (w)  and  even  utensils  in  trade,  (a^)  are  the  separate 
property  of  one  of  the  partners,  subject  to  the  right  of  the  others 
to  use  them  as  long  as  the  partnership  continues.  If,  however,  a 
partner  brings  such  property  into  the  common  stock  as  part  of  his 
capital,  it  becomes  partner*ship  property,  and  any  increase  p^ooo 
in  its  value  will  belong  to  the  firm.  (?/) 

Property  bought  with  the  money  of  the  firm. — It  does  not  even 
necessarily  follow  that  property  bought  with  the  money  of  the  firm 
is  the  property  of  the  firm.  For  it  sometimes  happens  that  prop- 
erty, although  paid  for  by  the  firm,  has  been,  in  fact,  bought  for 
one  partner  exclusively,  and  that  he  has  become  debtor  to  the  firm 
for  the  purchase  money,  (z)  8 

parte  Murton,  1  Mont,  D.  &  D.  252;  partnership    funds    is    not    necessarily 

Salmain  v.  Shore,  9  Ves.  500;  Eowley  partnership  property,  yet  the  fact  that 

V.  Adams,  7  Beav.  548 ;  Doe  v.  Miles,  1  it  was  so  purchased,  especially  if  it  was 

Stark.  181,  and  4  Camp.  373.     If  there  necessary  for  the  ordinary  operations  of 

is  no  lease  and  the  firm  is  dissolved,  the  the  firm,  and  was  actually  so  used,  will 

owner  can  eject  his  late  partners  with-  be  conclusive  in  equity  that  it  was  in- 

out  notice  to  quit.     Doe  v.  Black,  8  Car.  tended  to  be  held  as  partnership  prop- 

&  P.  464 ;  Benham  v.  Gray,  5  C.  B.  138  erty,  in  the  absence  of  controlling  evi- 

(an  action  of  trespass).     As  to  an  in-  dence  to  the  contrary.     But  at  law,  the 

junction   in   such   cases,    see    Elliot   v.  property  must  ordinarily  be  dealt  with 

Brown,  3  Swanst.  489,  n.;  Hawkins  v.  according  to  the  legal  title.     Hoxie  v. 

Hawkins,  4  Jur.   (N.  S.)   1044,  Stuart.,  Varr,  1  Sumn.  (U.  S.)  173. 

V.  C.  Eeal  estate  contributed  to  the  partner- 

(w)  Ex  parte  Owen,  4  De  G.  &  S.  ship   by   one   partner,   at    a   valuation 

351.     See  Ex  parte  Hare,  1  Deac.  16;  agreed    upon,   becomes    firm    property 

Ex  parte  Murton,  1  Mont.,  D.  &  D.  252.  without  a  conveyance  from  such  part- 

(x)  Ex  parte  Smith,  3  Madd.  63.  ner,    and   he   holds   the   legal    title    in 

{y)  Robinson  v.  Ashton,  20  Eq.  25.  trust  for  the  firm  as  partnership  assets. 

(z)  See  Smith  v.  Smith,  5  Ves.  193 ;  Wiegand  v.  Copeland,  7  Sawy.  (U.  S.) 

Walton  V.  Butler,   29   Beav.  428;    Ex  442. 

parte  Emly,  1  Eose  64.     Compare  the  Where   one  partner  invested  a  por- 

case  of  the  Bank  of  England,  3  De  G.,  tion  of  the  partnership  funds  in  lands 

F.  &  J.  645,  noticed  infra,  p.  *330.  for  his  own  use,  it  was   held  tTiat  this 

8,  Property  bought  with  the  money  created  a  resulting   trust,  and  that  the 

of  the  firm. — Equity  treats  real  estate  other  partners  might  follow  it  and  claim 

owned  by  a  firm  and  purchased  with  its  their  portion  of  the  specific  property, 

funds,  as  partnership  property,  for  the  King  v.   Hamilton,  16   111.   190.      See, 

purpose  of  settling  the  debts  of  the  firm  also,  Edgar  v.  Donnally,  2  Munf.  (Va.) 

and   distributing  its    effects.     Allen   v.  387. 

Withrow,  110  U.  S.  119.  Eeal  property,  bought  for  partnership 

While  real  property  purchased  with  purposes,  and  paid   for  with  the  undi- 

553 


329*  PARTNERSHIP  PROPERTY.        [bOOK  III., 

Agreement  of  partners  the  true  test. — It  is  obvious,  therefore,  that 
the  only  true  method  of  deterraining,  as  between  the  partners  them- 
selves what  belongs  to  the  firm  and  what  not,  is  to  ascertain  what 
agreement  has  been  come  to  upon  the  subject.  If  there  is  no  ex- 
press agreement,  attention  must  be  ])aid  to  the  source  whence  the 
property  was  obtained,  the  purpose  for  which  it  was  acquired,  and 
the  mode  in  which  it  has  been  dealt  with.  The  following  cases, 
in  which  there  was'  very  little  evidence  to  show  what  agreement 
had  been  made,  may  be  usefully  referred  to  on  this  subject. 

Stock  in  tirade  and  furniture. — In  Ex  parte  Owen  (a)  one  Bowers, 

vided    moneys  of    the    partnership,    is    them    in    common,  though    purchased 
partnership  property,  although  the  con-    with  partnership  funds,  and  to  be  used 
veyance  is  made  to  both  the  partners  in    for    partnership    purposes.       Smith    v. 
t-heir  individual  names.     Paige  Ti.  Paige    Jackson,  2  Edw.  (N.  Y.)  28. 
(Iowa),  32  N.  W.  Rep.  360.  In  Fall  River  Whaling  Co.  v.  Borden 

If  real  property  be  purchased  with  (10  Cush.  (Mass.)  458,  467,  470),  lands 
partnership  means,  and  used  for  part-  were  purchased  by  partners,  and  the 
nership  purposes,  it  is  treated  in  equity  deed  taken  to  them  as  tenants  in  com- 
as held  by  the  partners  in  trust  for  the  mon.  "  Tlie  cost  of  the  purchase  went 
firm,  subject  to  the  same  rules  as  apply  into  the  partnership  accounts.  The  es- 
to  partnership  personal  property,  and  tates  were  entered  into  the  company 
liable  to  the  debts  of  the  firm  and  the  books  as  company  property.  As  por- 
claims  of  the  partners  inter  se ;  and  this  tions  were  sold  for  profit,  from  time  to 
is  so  whether  the  title  be  vested  in  one  time,  the  proceeds  were  merged  in  the 
or  all  of  the  members  of  the  firm.  Pep-  general  funds  of  the  copartnership. 
per  V.  Thomas  (Ky.),  4  S.  \V.  Rep.  These  lands  were  avowedly  purchased 
297.  for  speculation."     It  was  held  that  the 

Real  estate  conveyed  to  all  the  mem-  lands  were  partnership  property.  The 
bers  of  a  partnership,  though  purchased  court  say :  "  In  order  to  afiect  lands 
with  the  funds  of  the  partnership  and  with  partnership  equities,  it  is  not  ne- 
used  for  partnership)  purposes,  vests,  at  cessary  that  such  land  should  be  the  in- 
hiw,  in  the  partners  as  tenants  in  com-  cident  merely  of  a  commercial  partner- 
mon ;  and  a  failure  to  dissolve  an  at-  ship ;  but  it  may  be,  in  part  at  least,  the 
tachment  of  such  estate,  made  in  an  ac-  distinct  substratum  of  a  copartnership." 
tion  on  a  note  given  by  the  two  partners    See  infra,  note  11. 

individually,  after  the  dissolution  of  the  (a)  4  De  G.  &  S.  351.  See,  also,  Pil- 
partnership,  will  not  render  the  partner-  ling  i'.  Pilling,  3  Dg  G.,  J.  &  S.  162. 
ship  liable  to  proceedings  in  insolvency.  As  to  a  lease  of  salt  works  belonging 
Ensign  v.  Briggs,  6  Gray  (Mass.)  329.  originally  to  one  partner,  but  which  be- 
Where  land  is  conveyed  to  partners  came  the  property  of  the  firm,  Parker 
jointly,  without  any  agreement  that  it  v.  Hills,  5  Jur.  (N.  S.)  809,  and  on  ap- 
shall  be  considered  as  joint  stock,  it  will  peal,  7  Id.  833. 
be  treated  as  real   estate  belonging  to 

554 


CHAP.  IV.,  §  II.]      SEPARATE  PROPERTY.  329* 

who  was  a  grocer,  provision  dealer  and  wine  merchant,  and  who 
possessed  stock  in  trade  and  household  furniture  at  his  place  of 
business,  took  two  partners,  without  any  agreement  except  that 
they  were  to  participate  in  tiie  profits  of  the  concern.  They 
brought  in  no  capital  and  paid  no  premium,  and  no  deed  or  agree- 
ment was  executed.  Bowers  bought  with  his  own  money,  but  in 
the  name  of  the  firm,  new  stock  required  for  the  business.  Upon 
the  bankruptcy  of  the  firm,  the  question  arose  to  whom  the  stock 
in  trade  and  furniture  belonged.  The  court,  coming  to  the  best 
conclusion  it  could  from  such  materials  as  were  before  it,  held  that 
there  was  an  agreement  between  the  three,  expressed  or  implied, 
that  all  the  stock  in  trade  should  become  the  property  of  the  three, 
subject  to  an  account,  in  *which  the  partnership  would  be 
-^  debited  in  favor  of  Bowers  for  the  value  of  the  articles 
which  belonged  to  him  or  for  which  he  paid.  But  the  court 
thought  there  was  not  the  same  ground  for  such  an  inference  as 
to  the  household  furniture,  and  that  therefore  was  held  to  have 
continued  and  to  remain  the  separate  estate  of  Bowers. 

Outlays  on  property. — Sometimes  a  firm  lays  out  money  on 
property  which  belongs  exclusively  to  one  partner ;  or  some  of  the 
partners  lay  out  their  own  moneys  on  the  property  of  the  firm, 
and  in  such  cases  the  question  arises  whether  the  money  laid  out 
can  be  considered  as  a  charge  on  the  property  on  which  it  has  been 
expended,  or  whether  the  owners  of  the  property  obtain  the  benefit 
of  the  outlay.  The  agreement  of  the  partners,  if  it  can  be  ascer- 
tained, determines  their  rights  in  such  cases.  But  where,  as  often 
happens,  it  is  extremely  difficult,  if  not  impossible,  to  ascertain 
what  was  agreed,  the  only  guide  is  that  afforded  by  the  burden  of 
proof.  It  is  for  those  claiming  an  allowance  in  respect  of  the  out- 
lay to  establish  their  claim.  On  the  other  hand,  an  intention  to 
make  a  present  of  a  permanent  improvement  is  not  to  be  presumed. 

Houses  built  on  partnership  property. —In  Re  Streatfield,  Law- 
rence &  Co.  (6)  two  partners  bought  an  estate  with  partnership 
money.     The  land  was  conveyed  to  them  in  undivided  moieties  to 

(b)  Bank  of  England  Case,  3  De  G.,  as  to  buildings  paid  for  ont  of  partner- 
F.  &  J.  645.  In  Pawsey  v.  Armstrong,  ship  moneys,  but  erected  on  the  separate 
18  Ch.  D.  698,  an  inquiry  was  directed    property  of  one  of  the   partners.     See, 

555 


330*  PARTNERSHIP  PROPERTY.         [bOOK  III., 

uses  to  bar  dower,  and  each  partner  built  a  house  on  the  land  with 
money  of  the  firm,  but  charged  to  him  in  his  private  account.  An 
account  was  opened  in  the  partnership  books,  and  in  this  account 
the  purchased  estate  was  debited  with  all  moneys  of  the  partner- 
ship expended  in  the  purchase.  At  the  time  of  the  purchase  the 
land  was  in  lease,  but  the  tenant  surrendered  to  the  partners  those 
portions  which  they  wanted,  they  reducing  his  rent.  The  rents, 
viz.,  both  that  paid  by  the  tenant  for  what  he  held,  and  that  paid 
to  him  for  what  he  gave  up,  were  treated  in  the  books  of  the  firm 
as  paid  to  and  by  it.  There  was  evidence  to  show  that  the  part- 
ners intended  to  come  to  some  arrangement  respecting  the  division 
of  the  estate,  but  *they  became  bankrupt  before  doing  so.  r^^ooi 
It  was  held  that  both  the  land  and  the  houses  on  it  were  '- 
the  joint  property  of  the  firm,  and  not  the  separate  properties  of 
the  partners. 

Appointments. — In  Collins  v.  Jackson  (c)  two  persons  were  in 
partnership  as  solicitors,  and  one  of  them  held  several  appointments ; 
he  was  clerk  to  poor-law  guardians,  superintendent  registrar  of 
births,  marriages  and  deaths,  treasurer  of  a  turnpike  trust,  steward 
of  a  manor,  treasurer  of  a  charity,  and  receiver  of  tithes.  The 
question  arose  whether  the  profits  of  these  offices  belonged  to  the 
partnership  or  not.  There  was  no  written  agreement  specifically 
applying  to  these  offices,  but  there  was  a  memorandum  relating  to 
some  others  reserv^ed  by  the  father  of  one  of  the  partners  when  he 
retired  from  business,  and  the  Master  of  the  Rolls  held  that  all  the 
offices  in  question  were  to  be  treated  as  held  on  behalf  of  both  part- 
ners, and  not  for  the  exclusive  benefit  of  the  partner  who  actually 
filled  the  offices,  (d)  9 

Cases  ichere  co-owners  share  profits. — The  cases,  however,  which 

also,  Burdon  v.  Barkus,  3  Giff.  412,  and  partners  agreed  with  a  neighboring  post- 

4  De  G.,  F.  &  J.  42,  where  a  pit  was  master  that  the  post  office  should  be  kept 

sunk  by  the  firm  in  a  partner's  property,  at  the  partnership  store,  the  contracting 

(c)  31  Beav.  645.  partner   being   appointed    deputy   post- 

[d)  See,  also,  Smith  v.  Mules,  9  Hare  master;  but  the  business  was  transacted 
556 ;  and  Ambler  v.  Bolton,  14  Eq.  427,  by  the  clerks  of  the  store  indiscrimin- 
as  to  the  mode  of  dealing  with  such  ately,  no  separate  books  being  kept,  and 
offices  on  a  dissolution.     .  the  money  going  into  the   partnership 

9.  Appointments.— Where  one  of  two    funds,  and   all    payments  on  account  of 

556 


CHAP.  IV.,  §  II.]      SEPARATE  PROPERTY. 


\SV 


present  most  difficulty  are  those  in  which  the  co-owners  are  part- 
ners in  the  profits  derived  from  their  common  property,  (e)  Sup- 
pose, for  example,  that  two  or  more  joint  tenants,  or  tenants  in 
common,  of  a  farm  or  a  mine,  work  their  common  property  together 
as  partners,  contributing  to  the  expenses  and  sharing  all  profits  and 
losses  equally,  there  will  certainly  be  a  partnership ;  and  yet,  unless 
there  is  something  more  in  the  case,  it  seems  that  the  land  will  not 
be  partnership  property,  but  will  belong  to  the  partners  as  co- 
owners,  just  as  if  they  were  not  partners  at  all;(/)  and  the  result 
may  even  be  the  same  if  they  purchase,  out  of  their  profits,  other 
lands  for  the  purpose  of  more  conveniently  developing  their  busi- 
ness, {g) 

Land  acquired  by  devise  farmed  in  common. — In  Morris  v.  Bar- 

-■  rett(A)  lands  were  devised  to  two  persons  *as  joint*  tenants. 

^  They  farmed  those  lands  together  for  twenty  years,  and 
kept  their  money  in  one  common  stock  to  which  each  had  access, 
but  they  never  came  to  any  account  with  each  other.  Out  of  their 
common  stock  they  bought  other  lands,  w^iich  were  conveyed  to 
one  of  them  only,  but  were  farmed  by  both,  like  the  first  lands. 
It  was  held  that  the  devised  farms  were  not  partnership  property, 
but  that  the  purchased  farms  were. 

Joint  tenants  by  devise  partners  in  profits. — In  Brown  v.  Oak- 
shot  (i)  a  brewer  devised  his  real  estates  to  trustees  for  a  term  of 
five  hundred  years,  upon  trust,  to  pay  certain  annuities,.  anx:l  to 
divide  the  surplus  rents  between  his  sons,  and  he  devised  the  same 
estates,  subject  to  this  term,  to  his  sons  as  joint  tenants.     The  sons 

the  post  office  being  made  out  of  such  523 ;  and  Roberts  v.  Eberhardt,  Kay  159.. 

funds,  it  was  held  that  the  profits  of  the  See,  also,  Williams  v.  Williams,  2  Ch. 

post  office  belonged  to  the  firm,  especially  294,  where  the  partnership  had  expired^ 

as  the  partners  had  made  several  settle-  but  an  agreement  to  divide  the  property 

ments  between  themselves,  without  any  was  held  to  have  been  come  to. 

separate  claim  to  those  profits  having  (g)  Steward  v.  Blakeway,  4  Ch.  603,. 

been   set  up  by  the   partner   who  con-  and   6   Eq.  479,  a  case  of  a  farm  and 

tracted   for   the   business.      Caldwell  v.  quarry.     But  compare  Morris  v.  Barrett, 

Leiber,  7  Paige  (N.  Y.)  483.  Phillips  v.  Phillips,  and  Waterer  v.  Wa- 

(e)  As  to  the  distinction  between  co-  terer,  cited  below, 

ownership  and  partnership,  see  anle  p.  {h)  3  You.  &  J.  384.     Compare  Wa- 

*51   et  seq.  terer  v.  Waterer,  infra,  p.  *333. 

(/)  See  Crawshay  v.  Maule,  1  Swanst.  (i)  24  Beav.  254. 

557 


332*  PARTNERSHIP  PROPERTY.         [bOOK  HI.. 

carried  on  their  father's  business  in  partnership  together,  and  used 
the  real  estates  devised  to  them  for  the  purposes  of  the  business ; 
but  it  was  nevertheless  held  that  the  reversion  in  fee  continued  to 
be  vested  in  them  jointly,  and  not  in  common,  as  would  have  been 
the  case  had  it  become  partnership  property. 

Public  houses  devised  to  partners  in  a  brewery. — In  Phillips  v. 
Phillips (/;)  public  houses  were  devised  to  two  persons  who  carried 
on  a  brewery  in  partnership,  and  it  was  held  that  such  houses  did 
not  become  partnership  property,  though  used  for  the  purposes  of 
the  partnership.  In  the  same  case  some  mortgage  debts  secured  on 
public  houses  were  bequeathed  to  the  two  partners,  and  they  after- 
Avards  purchased  the  equities  of  redemption,  and  paid  for  them  out  of 
the  funds  of  the  partnership,  but  it  was  held  that  the  property  thus 
acquired  did  not  form  part  of  the  partnership  property,  the  equities 
of  redemption  following  the  mortgage  debts.  But  in  this  very  case 
it  was  held  that  other  public  houses  purchased  by  the  partners  out 
of  the  partnership  funds,  and  used  for  the  purposes  of  its  trade,  did 
form  partnership  property  to  all  intents  and  purposes.  (J) 

Devisees  of  a  trade  and  of  land  for  the  purpose  of  carrying  it 
on. — On  the  other  hand,  in  Jackson  v.  Jackson,  (m)  a  testator  had 
*devised  to  his  two  sons  jointly,  his  trading  business  and  po.-^q 
lands  used  by  him  for  the  purpose  of  carrying  it  on.  The 
sons  took  the  business  and  carried  it  on  in  partnership ;  and  it  was 
held  that  the  lands  formed  part  of  the  partnership  property,  and 
did  not  belong  to  the  sons  as  mere  joint  tenants.  In  this  case,  not 
only  was  there  some  evidence  to  show  that  the  sons  considered  the 
land  as  part  of  their  property  as  partners,  but  there  was  also  this 
peculiarity :  that  a  trading  business  was  left  to  them,  and  that  the 
land  was  accessory  to  that  trade ;  so  that  it  was  very  difficult,  as 
observed  by  the  Lord  Chancellor,  to  sever  the  profits  from  the  land 

{k)  As  stated  in  Bisset  on  Partnership,  the   question   of  conversion  would   not 

p.  50.     The  report  in  1  Myl.  &  K.  649,  arise.     Compare  Waterer  v.  Waterer,  15 

is  silent  as  to  the  property  devised.    Mr.  Eq.  402,  infra. 

Bisset  considers  the  decision  as  an  au-  {I)  1  Myl.  &  K.  649. 

thority  on  the  point  of  conversion.    But  (m)  9  Ves.  591,  and  7  Id.  535.     Com- 

if,  as  he  represents,  the  court  came  to  pare  this   with   Brown  v.  Oakshot,  24 

the  conclusion  that  the  devised  property  Beav.  254,  noticed  supra. 
was  not,  in  fact,  partnership  property, 

558 


CHAP,  IV.,  §  II.]      SEPARATE  PROPERTY. 


333^ 


dud  to  hold  the  devisees  to  be  partners  as  to  the  former,  but  not 
as  to  the  latter. 

Devisees  of  mines. — Upou  this  last  ground  it  was  held,  iu  Craw- 
shay  V.  Maule,  {n)  that  mines  devised  to  several  persons  for  the  ex- 
press purpose  of  being  worked  by  them  in  partnership,  and  which 
were  worked  accordingly,  were  partnership  property. 

Devise  of  nursery  grounds. — In  Waterer  v.  Waterer  (o)  a  nursery- 
man who  carried  on  business  with  his  sons,  although  not  in  part- 
nership, left  his  residuary  estate,  including  the  good  will  of  his 
business,  to  his  sons  in  common ;  they,  after  his  death,  carried  on 
the  business  in  partnership,  and  bought  more  land  for  the  pur- 
poses of  the  business,  and  paid  for  it  out  of  his  estate ;  then  one  son 
died,  and  the  others  bought  his  share  and  paid  for  it  out  of  money 
raised  by  mortgage  of  the  nursery  ground,  and  out  of  their  father's 
estate.  On  the  death  of  one  of  the  surviving  sons  intestate,  it  was 
held  that  all  the  land  thus  acquired  had  become  partnership  prop- 
erty, and  that  the  share  of  such  son  was  to  be  treated  as  personal 
and  not  as  real  estate.  10 


(n)  1  Swanst.  495. 

(o)  Waterer  v.  Waterer,  15  Eq.  402. 
See,  also,  Davies  v.  Games,  12  Ch.  D.  813, 
a  similar  case. 

10.  Nature  of  partners'  interests  in 
land. —  Where  real  estate  is  conveyed  to 
copartners,  in  their  individual  names, 
for  the  use  and  benefit  of  the  firm,  or  in 
payment  of  debts  due  to  the  firm,  the 
grantees  become  tenants  in  common  of 
the  land ;  and  upon  the  death  of  either, 
the  legal  title  to  his  undivided  share 
descends  to  his  heirs-at-law.  Buchan  v. 
Sumner,  2  Barb.  (N.  Y.)  Ch.  165 ;  An- 
<ierson  v.  Tompkins,  1  Brock.  (U.  S.) 
456 ;  Arnold  v.  Stevenson,  2  Nev.  234 ; 
Caldwell  v.  Palmer,  56  Ala.  405 ;  Coles 
V.  Coles,  15  Johns.  (N.  Y.)  159;  Devine 
V.  Mitchum,  4  B.  Mon.  (Ky.)  488;  Don- 
aldson V.  Bank  of  Cape  Fear,  1  Dev.  (N. 
C.)  Eq.  103 ;  Ensign  v.  Briggs,  6  Gray 
(Mass.)  329;  Galbrailh  v.  Gedge,  16  B. 
Mon.  (Ky.)  631 ;  Willey  v.  Carter,  4  La. 


Ann.  56  ;  Wood  v.  Montgomery,  60  Ala. 
500. 

Partners  may  stipulate  between  them- 
selves that  the  ownership  of  property 
shall  remain  in  one,  the  firm  to  have 
only  the  use  of  the  same,  or  make  any 
other  regulation  in  regard  to  ownership 
of  the  property  used,  not  prohibited  by 
law.     Taft  V.  Schwamb,  80  III.  289. 

Where  partners  purchased  a  leasehold 
estate  with  partnership  property,  gave  a 
deed  of  trust  upon  it,  and  the  trustee, 
after  the  death  of  one  of  the  partners, 
sold  the  estate  under  the  power  in  the 
deed,  a  surplus  remaining ;  it  was  held 
that  the  surplus  was  to  be  considered  as 
partnership  property,  upon  which  the 
surviving  partner  was  entitled  to  admin- 
ister.    Carlisle  v.  Mulhern,  19  Mo.  56. 

Where  land  purchased  with  partner- 
ship funds  is  conveyed  to  the  partners 
by  a  deed  which  would  ordinarily  make 
them  tenants  in  common  thereof,  it  will 


559 


PA RTNERSII IP    PPtOPE UTY. 


[book  III.^ 


Land  acquired  for  the  jmrposes  of  trade. — By  a  slight  extension 
of  the  same  principle,  if  several  persons  take  a  lease  of  a  colliery, 
in  order  to  work  the  colliery  as  partners,  and  they  do  so  work  it, 
the  lease  will  be  partnership  property,  (j?)  So,  if  co-owners  of  land 
form  a  partnership,  and  the  land  is  merely  accessory  to  their  trade, 
and  is  treated  as  part  of  the  common  stock  of  the  firm,  the  land 
will  be  partnership  property,  (g) 


be  deemed  in  equity  converted  into  per- 
sonal property,  and  may  be  administered 
upon  as  such,  in  winding  up  the  affairs 
of  the  concern,  unless,  from  the  books  or 
other  sources,  it  appears  that  business 
profits  were  thus  invested  to  pay  a  divi- 
dend to  the  partners.  The  intention  of 
the  partners  in  making  the  purchase, 
as  shown  by  the  evidence  in  the  case, 
should  govern  tlie  construction  of  the 
conveyance.  Collum  v.  Read,  24  N.  Y. 
505. 

Where  laud  is  purchased  with  part- 
nership funds  and  conveyed  to  the  part- 
ners by  name,  although  in  law  they  are 
considered  as  tenants  in  common,  and 
no  notice  is  taken  of  the  equitable  rela- 
tions arising  out  of  the  partnership,  yet 
in  the  absence  of  an  express  agreement, 
or  of  circumstances  showing  an  intent 
that  such  estate  shall  be  held  for  their 
separate  use,  in  equity  the  partnership 
property  will  be  devoted  to  partnership 
purposes,  and  a  trust  is  created  for  the 
security  of  the  partnership  debts.  If 
the  partnership  becomes  insolvent,  the 
property  is  primarily  liable  to  the  pay- 
ment of  the  partnership  debts,  to  the 
postponement  of  the  creditors  of  the 
several  partners.  Ross  v.  Henderson,  77 
N.  C.  170 ;  Robertson  v.  Baker,  11  Fla. 
192. 

Two  persons  took  a  lease  of  a  coal 
mine  as  tenants  in  common.  After- 
wards they  associated  themselves  in  the 
business  of  coal  mining,  shipping  and 
selling,  as  partners,  the  business  to  be 


carried  on  from  the  proceeds  of  the  de- 
mised premises,  for  the  whole  period  of 
the  lease.  Held,  that  the  leasehold  be- 
came partnership  property.  Patterson 
V.  Silliman,  28  Pa.  St.  304.  See,  also, 
Morton  V.  Ostrom,  33  Barb.  (N.  Y.)  256. 
The  appearance  of  real  estate  on  part- 
nership books  to  the  extent  necessary  to 
carry  on  the  business  of  the  firm,  is  not 
inconsistent  with  the  partners'  title  to 
the  real  estate  as  tenants  in  common. 
Grobb's  Appeal,  66  Pa.  St.  117. 

Where  a  deed  of  land  was  made  to  A, 
B  and  C,  "  doing  business  as  A,  B  &  Co., 
their  heirs  and  assigns,"  the  grantees 
took  in  joint  tenancy,  and  a  judgment 
confessed  by  all  of  them  in  their  indi- 
vidual names  with  the  same  words, 
"  doing  business,  &c.,"  added  thereto, 
was  held  to  be  a  lien  upon  the  land,  and 
to  bind  it  in  the  hands  of  subsequent 
purchasers  from  the  firm.  Lauffer  v. 
Cavett,  87  Pa.  St.  479. 

While  there  may  be  partnerships  in 
the  business  of  milling,  mining  or  farm- 
ing, unless  the  intent  of  the  joint  owners 
to  throw  their  real  estate  into  the  fund 
as  partnership  stock  is  distinctly  mani- 
fested, or  unless  the  real  property  is 
bought  out  of  the  social  funds  for  part- 
nership purposes,  it  must  still  retain  its 
character  of  realty.  Wheatley  v.  Cal- 
houn, 12  Leigh  (Va.)  264. 

{p)  Faraday  v.  Wightwick.Taml.  250, 
and  1  Russ.  &  M.  45.  See  Bentley  v. 
Bates,  4  You.  &  C.  Ex.  182. 

(q)  Essex    V.   Essex,   20    Beav.   442. 


560 


CHAP.  IV.,  §  II.]     SEPARATE  PROPERTY. 


334* 


^334] 


*  Result  of  foregoing  cases. — Upon  the  whole,  therefore, 
it  seems  that  land  acquired,  whether  gratuitously  or  not, 
for  the  purpose  of  carrying  on  a  partnership  business,  and  used  for 
that  purpose,  is  to  be  considered  as  property  of  the  partnership ; 
but  that  land  which  is  not  so  acquired,  but  which,  belonging  to 
seyeral  persons  jointly  or  in  common,  is  employed  by  them  for 
their  common  profit,  does  not  become  partnership  property  unless 
there  is  some  evidence  to  show  that  it  has  been  treated  by  them  as 
ancillary  to  the  partnership  business,  and  as  part  of  the  common 
stock  of  the  firm.(?-)ll 


Compare  Steward  v.  Blakeway,  4  Ch. 
603,  and  6  Eq.  479. 

(r)  See  Steward  v.  Blakeway,  4  Ch. 
603,  and  6  Eq.  479,  and  cases  ante  p. 
*332. 

11.  Land  acquired  for  the  purposes 
of  trade — when  becomes  partnership 
property. —  Where  real  estate  is  paid 
for  with  partnership  funds,  especially 
if  it  is  needed  and  used  for  the  ordinary 
business  of  the  firm,  it  will  aflTord  a 
strong  presumption  that  it  was  intended 
to  be  held  as  partnership  property,  and, 
in  the  absence  of  countervailing  circum- 
stances, this  presumption  will  be  deci- 
sive. Hoxie  V.  Carr,  1  Sumn.  (U.  S.) 
173 ;  Pugh  V.  Carrie,  5  Ala.  446. 

Where  the  title  to  land  belonging  to 
a  partnership  is  vested  in  one  of  the 
partners,  the  fact  that  it  is  partnership 
property  may  be  established  by  parol. 
Zook  V.  Clemens,  41  Iowa  95 ;  Block  v. 
Seipt,  17  Week.  N.  C.  565;  Bird  v. 
Morrison,  12  Wis.  138 ;  Collins  v.  Decker, 
70  Me.  23 ;  Drewry  v.  Montgomery,  28 
Ark.  256;  Fall  Kiver  Whaling  Co.  v. 
Borden,  10  Cush.  (Mass.)  458;  Fair- 
child  V.  Fairchild,  64  N.  Y.  471 ;  In  re 
Farmer,  18  Bankr.  Keg.  207 ;  Hauflf  v. 
Howard,  3  Jones  (N.  C.)  Eq.  440  ;  Hew- 
itt V.  Kankin,  41  Iowa  35;  Little  v. 
Snedcor,  52  Ala.  167 ;  Sherwood  v.  St. 
Paul,  &c.,  R.  R.  Co.,  21    Minn.   127; 


Thompson  v.  Egbert,  3  Thomp.  &  C.  (N. 
Y.)  474 ;  S.  C,  1  Hun  484. 

The  intention  with  which  real  prop- 
erty is  purchased  by  a  firm,  and  not  the 
use  to  which  it  is  put,  determines  the 
question  whether  it  shall  be  deemed 
real  or  personal  property.  Holmes  v. 
Self,  79  Ky.  297.  Thus,  improvements 
upon  land  owned  by  partners,  as  tenants 
in  common,  made  with  partnership 
funds,  are  partnership  property.  Lane 
V.  Tyler,  49  Me.  252 ;  Kendall  v.  Eider, 
35  Barb.  (N.  Y.)  100 ;  Hiscock  v.  Phelps, 
44  N.  Y.  97.  See,  also,  Devenney  v.  Ma- 
honey,  8  C.  E.  Gr.  (N.  J.)  247. 

Where  copartners  take  a  lease  which 
is  silent  as  respects  the  partnership  re- 
lation, the  lease  will  be  partnership 
property  where  the  declarations  of  both 
partners  that  it  was  so  taken  and  held 
are  proved.  Rust  v.  Chisolm,  57  Md. 
376. 

An  oral  agreement  of  two  persons 
contemplating  a  partnership,  to  sell 
lands  of  each,  and  employ  the  proceeds 
as  capital,  is  valid;  and  a  ferry  and 
franchise  purchased  by  one,  with  the 
proceeds,  is  partnership  property.  Knott 
V.  Knott,  6  Oreg.  142. 

Where  partners  intend  to  bring  real 
estate  into  partnership  slock,  that  in- 
tention must  be  manifested  by  deed  or 
writing  placed  on  record.     Hale  v.  Hen- 


561 


36 


334*  PARTNERSHIP   PROPERTY.  [bOOK   III., 

SECTION    III. — CONVERSION    OF    JOINT     ESTATE    INTO    SEPARATE 
ESTATE,    AND    VICE    VERSA. 

3.  Agreement  sufficient  to  alter  the  ownership  of  property. — It  is 
competent  for  partners  by  agreement  amongst  themselves  to  con- 
vert that  which  was  partnership  property  into  the  separate  property 

ric  2  Watts  (Pa.)  143;  Eidgway's  Ap-    invested  with  the  title  as  tenants  in  com- 
peal,  15  Pa.  St.  177.  mon,  and  their  respective  interests  there- 

in Pennsylvania,  as  respects  strangers,  in  are  several.  Price  v.  Hicks,  14  Fla. 
partners'  agreements  to  make  real  estate  565 ;  Russell  v.  Miller,  26  Mich.  1. 
common  stock  must  be  in  writing,  and  In  Louisiana,  real  estate  owned  by 
ought  to  be  recorded.  It  cannot  be  commercial  partners  does  not  enter  into 
shown  by  parol  that  real  estate  conveyed  their  commercial  assets.  They  are  joint 
to  two  as  tenants  in  common,  is  partner-  owners.  Guilbeau  v.  Melancon,  28  La. 
ship  property.  Lefevre's  Appeal,  69  Pa.  Ann.  627.  And  if  immovable  property 
St.  122.  See,  also,  Ebbert's  Appeal,  70  is  purchased  with  partnership  funds  by 
Pa.  St.  79;  Jones'  Appeal,  Id.  169;  and  one  partner  in  his  own  name,  without 
Hale  V.  Henric,  2  Watts  (Pa.)  143  ;  Ridg-  the  consent  of  his  copartners,  the  prop- 
way's  Appeal,  15  Pa.  St.  177.  erty  itself  belongs  to  the  partner  pur- 
Where  it  is  attempted  to  be  shown  chasing,  but  its  value  at  the  time  of 
that  a  conveyance  to  one  partner  by  a  purchase  belongs  to  the  firm.  No  de- 
deed  absolute  on  its  face,  was  in  fact  a  cree  could  be  rendered  to  vest  the  title 
conveyance  to  him  for  the  use  of  himself  of  such  property  in  the  firm,  for  the 
and  his  copartner  as  tenants  in  common,  partnership  is  incapable  of  acquiring 
it  is  competent  in  rebuttal  to  show  by  title.  McKee  v.  GriflBn,  23  La.  Ann. 
parol  that  it  was  owned  by  them  as  part-   417. 

nership  property.  Black's  Appeal,  89  There  is  no  presumption  that  a  lease- 
Pa.  St.  201.  hold  standing  in  the  name  of  one  of 
Where  property  so  purchased  does  several  partners,  and  used  by  the  firm 
not  become  partnership  property. —  for  their  business,  constitutes  partnership 
The  mere  fact  that  a  firm  carry  on  busi-  assets.  The  presumption  is  otherwise ; 
ness  on  a  lot  of  land  belonging  to  the  its  mere  use  for  partnership  purposes 
members  of  the  partnership,  does  not  does  not  operate  to  divest  or  affect  the 
necessarily  impress  it  with  the  character  legal  title.  Chamberlain  v.  Chamberlain, 
of  partnership  property,  unless  they  44  N.  Y.  Super.  Ct.  116. 
have,  by  agreement  or  otherwise,  pur-  Land  purchased  with  firm  funds,  but 
posely  impressed  upon  it  that  character,  not  intended  to  become  partnership 
Ware  v.  Owens,  42  Ala.  212 ;  Pecot  v.  property,  and  not  treated  as  such,  will 
Armelin,  21  La.  Ann.  667.  not   be   so   considered.      Providence  v. 

Where  land  is  purchased  by  partners    Bullock,  14  R.  I.  855. 
with  partnership  funds,  but  not  for  the        Illustrations. — Where  an  undivided 
use  and  convenience  of  the  partnership    half  interest   in  land  was    bought  and 
business,  or   in  the   legitimate  line  of    paid  for  by  each  of  two  partners,  who, 
their  partnership  business,  thev  become    with  partnership  funds,  completed,  re- 

562 


CHAP.  IV.,  §  III.]      CONVERSION  OF  PROPERTY. 


334* 


-of  an  individual  partner,  or  vice  versa,  (s)     And  the  nature  of  the 
property  may  be  thus  aUered  by  any  agreement  to  that  effect ;  for 


paired,  improved  and  protected  it,  and 
used  it  for  partnership  purposes,  it  was 
held  that  the  land  became  partnership 
property.    Roberts  v.  McCarty,  9  Ind.  16. 

Real  estate  sold  at  a  judicial  sale  was 
knocked  down  to  A  and  B,  partners,  A 
having  bid  it  in  in  pursuance  of  an  un- 
derstanding between  him  and  his  part- 
ner to  buy  it  for  tlie  firm.  In  order, 
however,  to  avoid  the  necessity  of  get- 
ting outsiders  to  go  on  the  bonds  for  their 
purchase  money,  they  had  the  sale  en- 
tered in  B's  name,  and  he  signed  the 
bonds  as  principal  and  A  as  surety. 
Held,  that  the  real  estate  was  partner- 
ship property.  Sailer  v.  Brenner  (Ky.), 
3  S.  W.  Rep.  796. 

Where  a  member  of  a  copartnership 
conveyed  an  undivided  half  interest  in 
fee  simple  in  a  house  and  lot  to  his  co- 
partner, who  thereupon  moved  into  it 
and  duly  filed  and  recorded  his  declara- 
tion claiming  it  as  a  homestead — Held, 
that  it  being  clear  that  it  was  not  the 
intention  of  the  copartners  to  hold  the 
property  as  assets  of  the  partnership, 
the  same  was  not  subject  to  the  doctrine 
of  equitable  conversion,  and  the  part- 
ners held  the  realty  merely  as  tenants 
in  common.  Lindley  v.  Davis  (Mont.), 
14  Pac.  Rep.  717. 

Where  real  property  was  bought  for 
the  purpose  of  being  used  by  a  com- 
pany formed  for  the  purpose  of  carrying 
on  a  mechanical  trade,  and  was  so  used, 
and  had  been  so  used  by  several  com- 
panies before  this,  and  was  necessary  to 
the  carrying  on  of  such  business,  and 
was  mentioned  in  the  several  deeds  to 
the  several  partners  as  a  part  of  the 


effects  of  the  partnership — Held,  that 
there  was  a  trust  of  such  real  property, 
by  operation  of  law,  for  the  partner- 
ship, as  tenants  in  common,  though  it 
had  not  been  declared  in  writing.  Hanff 
V.  Howard,  3  Jones  (N.  C.)  Eq.  440. 

Where  B.,  owning  a  saw  mill  property, 
formed  a  partnership  with  F.  in  the 
lumber  business,  agreeing  by  parol  that 
the  mill  estate  should  constitute  part  of 
the  partnership  fund,  and  F.  paid  a  part 
of  the  consideration  in  cash,  the  rest  to 
be  paid  out  of  the  profits  of  the  business, 
it  was  held  that  the  title  of  B.  did  not 
pass  to  the  firm,  although  F.  went  into 
possession  with  B.  and  improvements 
were  made  upon  the  property  out  of  the 
firm  funds.  McCormick's  Appeal,  57 
Pa.  St.  54. 

The  rule  in  courts  of  equity. — The 
general  rule  as  applied  in  courts  of 
equity  is  that  real  estate  purchased  for, 
and  appropriated  to  or  intended  to  be 
used  for  partnership  purposes,  and  paid 
for  out  of  partnership  funds,  is  partner- 
ship property,  although  the  legal  title  is 
taken  in  the  individual  names  of  the 
partners,  or  in  the  name  of  one  of  the 
partners,  or  in  the  name  of  a  third  per- 
son. Equity  will  hold  the  party  holding 
the  legal  title,  or  his  heirs  in  case  of  his 
death,  as  trustee  for  the  firm.  Fairchild 
V.  Fairchild,  64  N.  Y.  471 ;  S.  C,  5  Hun 
407;  Abbott's  Appeal,  50  Pa.  St.  234; 
Bird  V.  Morrison,  12  Wis.  138  ;  Boyers 
V.  Elliott,  7  Humph.  (Tenn.)  204 ;  Buf- 
fum  V.  Buffum,  49  Me.  108 ;  Buchan  v. 
Sumner,  2  Barb.  (N.  Y.)  Ch.  165; 
Chamberlain  v.  Chamberlain,  44  N.  Y. 
Super.  Ct.  116 ;  Cilley  v.  Huse,  40  N.  H. 


(s)  Ex  parte  Ruffin,  6  Ves.  119 ;  Ex    10  Id.  348 ;    Ex  parte  Rowlandson,  1 
parte  Williams,  11  Id.  3  ;  Ex  parte  Fell,    Rose  416. 

563 


334=* 


PARTNERSHIP  PROPERTY. 


[book  III., 


neither  a  deed  nor  even  a  writing  is  absolutely  necessary  ;{t)  but  so 
long  as  the  agreement  is  dependent  on  an  unperformed  condition,  so 
long  will  the  ownership  of  the  property  remain  unchanged,  (u)  12 


358 ;  Delmonico  v.  Guillaume,  2  Sandf. 
(N.  Y.)  Ch.  561;  Deming  v.  Colt,  3 
Sandf.  (N.  Y.)  Ch.  284;  Devenney  v. 
Mahoney,  8  C.  E.  Gr.  (N.  J.)  247; 
Dewey  v.  Dewey,  35  Vt.  555 ;  Drewry  v. 
Montgomery,  28  Ark.  256;  Dupuy  v. 
Leavenworth,  17  Cal.  262 ;  Erwin's  Ap- 


peal, 39  Pa.  St.  535  ;  Fall  River  Whaling 
Co.  V.  Borden,  10  Ciish.  (Mass.)  458; 
Faulds  V.  Yates,  57  111.  416 ;  Fowler  v. 
Bailley,  14  Wis.  125  ;  Hewitt  v.  Rankin, 
41  Iowa  35  ;  Hiscock  v.  Phelps,  49  N.  Y. 
97 ;  Hogle  v.  Lowe,  12  Nev.  286  ;  In- 
diana, &c.,  Co.  V.  Bates,  14  Ind.  8  ;  Jar- 


(0  See  Pilling  v.  Pilling,  3  De  G ,  J. 
&  S.  162  ;  Ex  parte  Williams,  11  Ves. 
3;  Ex  parte  Clarkson,  4  Deac.  &  C.  56, 
per  Sir  G.  Rose ;  Ex  parte  Owen,  4  De 
G.  &  S.  351.  None  of  these  cases,  how- 
ever, turned  on  the  effect  of  an  un- 
written agreement  relating  to  land.  See, 
as  to  a  transfer  by  a  partner  of  his 
shares  in  the  partnership  property  when 
it  consists  wholly  or  in  part  of  land, 
post  ch.  5,  §  5. 

(m)  Ex  parte  Wheeler,  Buck  25  ;  Ex 
parte  Cooper,  1  Mont.,  D.  &  D.  358 ; 
Hawkins  v.  Hawkins,  4  Jur.  (N.  S.) 
1044. 

12.  Agreement  sufficient  to  alter 
the  ownership  of  property. — It  is  com- 
petent for  partners  to  agree  among  them- 
selves that  certain  real  estate  owned  by 
the  partnership  shall  be  leased,  and  that 
each  shall  be  entitled  to  his  proportion 
of  the  rent,  shall  collect  and  may  dis- 
charge it.  A  party,  renting  with  knowl- 
edge of  the  agreement,  contracts  with 
each  to  pay  him  his  proportion  of  the 
rent,  and  he  may  sue  for  it  in  his  own 
name.  And  one  partner  may  be  a  wit- 
ness for  another  in  such  suit.  McDoug- 
ald  V.  Banks,  13  Ga.  451. 

A  firm  may  take  a  separate  negotiable 
security  from  one  of  the  partners,  and 
use  it  for  its  own  purposes  ;  more  espe- 
cially may  it  do  so,  where  the  individ- 
ual partner  acts  as  the  agent  of  third 


persons.     Baring  v.  Lyman,  1  Story  (U. 
S.)  396. 

Debts  due  to  a  firm  may  be  assigned 
to  either  of  the  partners,  and  a  note 
given  to  the  assignee  for  the  amount  due 
by  a  debtor  to  the  firm,  extinguishes  the 
debt  to  the  partnership.  Lamkin  v. 
Phillips,  9  Port.  (Ala.)  98. 

Where  a  note  endorsed  in  blank  by  a 
copartnership  remains,  after  dissolution 
of  the  same,  in  the  hands  of  a  partner, 
who  transfers  it  in  payment  of  his  indi- 
vidual debt,  in  default  of  showing  to  the 
contrary  it  will  be  presumed  to  be  his 
individual  property.  Fletcher  v.  Ander- 
son, 11  Iowa  228. 

Where  a  member  of  a  partnership 
allows  his  private  property  to  be  min- 
gled with  that  of  the  firm,  and  to  be 
sold  with  their  property  as  part  thereof, 
the  purchaser  will  be  liable  for  the  price 
only  to  the  firm.  White  Mountain  Bank 
V.  West,  46  Me.  15. 

Where  a  copartnership,  to  which  a  lien 
has  accrued  for  work  done  and  money 
expended  upon  machinery,  is  dissolved, 
and  the  interest  in  the  lien  assigned  ta 
one  partner,  the  lien  is  not  lost,  but  may 
be  enforced  by  such  partner  in  the  firm 
name.  Busfield  v.  Wheeler,  14  Allen 
(Mass.)  139. 

Where  the  partner  whose  duty  it  was 
to  furnish  the  capital  put  in  as  part 
thereof   personal   chattels   necessary  to 


564 


CHAP.  IV.,  §  III.]      CONVERSION   OF   PROPERTY.  334* 

Creditors  not  entitled  to  he  consulted. — Moreover,  as  the  ordinary 
creditors  of  an  individual  have  no  lien  on  his  property,  and  cannot 


vis  V.  Brooks,  27  N.  H.  37  ;  Johnson  v. 
Clark,  18  Kan.  157  ;  King  v.  Weeks,  70 
N.  C.  372 ;  Lacy  v.  Hall,  37  Pa.  St.  360 ; 
Lancaster  Bank  v.  Myerley,  13  Pa.  St. 
544;  Little  v.  Snedcor,  52  Ala.  167; 
Lime  Rock  Bank  v.  Plietteplace,  8  R.  L 
56 ;  Matlack  v.  James,  2  Beas.  (N.  J.) 
126;  McGuire  v.  Ramsey,  9  Ark.  518; 
Rammelsberg  v.  Mitchell,  29  Ohio  St. 


22;  Owens  v.  Collins,  23  Ala.  837; 
Price  V.  Hicks,  14  Fla.  565 ;  Smith  v. 
Tarleton,  2  Barb.  (N.  Y.)  Cb.  336; 
Uhler  V.  Semple,  5  C.  E.  Gr.  (N.  J.) 
288 ;  Whitney  v.  Cotton,  53  Miss.  689. 
And  real  estate  so  held  will  be  liable  to 
all  the  incidents  attending  that  species 
of  property.  Sigourney  v.  Munn,  7 
Conn.  11 ;  Abbott's  Appeal,  50  Pa.  St. 


carrying  on  the  business,  it  was  held 
that  such  chattels  became  partnership 
property,  and  could  not  be  converted 
into  individual  property  by  an  agree- 
ment for  dissolution,  until  the  firm  debts 
were  paid.  Clements  v.  Jessup,  9  Stew. 
(N.  J.)  569. 

The  premium  on  bills  of  exchange, 
drawn  for  part  of  the  capital  furnished 
by  a  partner,  belongs  to  the  partnership, 
and  not  to  the  individual  partner.  But 
where  such  a  premium  had  been  credited 
to  a  partner  as  a  part  of  his  capital,  and 
it  appeared  that  this  application  had 
long  been  acquiesced  in — Held,  that  it 
was  too  late  to  question  it.  Stoughton 
V.  Lynch,  2  Johns.  (N.  Y.)  Ch.  209. 

When  the  members  of  a  firm,  by 
agreement  among  themselves,  make  an 
actual  division  between  them  of  part  of 
the  firm's  assets,  and  allot  to  each,  as  his 
own  property,  specific  portions  thereof, 
and  the  division  thus  made  is  assented  to 
and  acted  upon  by  all  the  partners,  the 
title  to  the  part  so  allotted  to  each  be- 
comes thereby  his  e'xclusive  individual 
property.  Crosby  v.  Nichols,  3  Bosw. 
(N.  Y.)"450. 

Where  partners  liave  agreed  to  dis- 
solve their  copartnership,  and  have 
divided  the  partnership  property  accord- 
ing to  their  separate  interests,  the  por- 
tion allotted  to  each  becomes  his  separate 


property,  and  neither  of  them,  by  reason 
of  his  liability  for  the  partnership  debts, 
or  his  payment  of  them,  has  any  lien 
upon  the  others'  portions.  He  has  no 
remedy,  therefore,  in  equity.  Holmes 
V.  Hawes,  8  Ired.  (N.  C.)  Eq.  21. 

Two  partners,  on  settlement  with  a 
creditor  of  their  firm,  after  dissolution, 
gave  their  separate  bonds  to  the  cred- 
itor, each  for  one-half  the  debt,  and 
agreed  that  the  amount  which  might 
be  recovered  on  a  certain  chose  in  action 
in  the  hands  of  the  creditor,  which  be- 
longed to  the  firm,  should  be  applied  to 
the  payment  of  the  bonds.  Held,  that 
the  joint  interest  of  the  partners  in  the 
chose  in  action  was  severed  by  agree- 
ment, and  that  one  partner  afterwards 
had  a  right  to  direct  his  half  to  be  ap- 
plied to  the  payment  of  his  bond,  and 
that  the  creditor  had  a  right  so  to  apply 
it.  Rowand  v.  Eraser,  1  Rich.  (S.  C.) 
325. 

Where  one  of  the  partners  buys  a 
horse  with  his  private  funds,  under  an 
agreement  to  allow  his  copartner  to 
elect  to  take  him  at  the  cost  price,  and 
for  some  days  the  horse  is  kept  and  used 
with  the  horses  of  the  partnership,  until 
the  partner,  in  the  exercise  of  his  elec- 
tion, sells  him,  such  sale  is  not  a  part- 
nership transaction.  Hatch  v.  Foster, 
27  Vt.  515. 


565 


334^ 


PARTNERSHIP   PROPERTY. 


[book  Ill.y 

prevent  him  from  disposing  of  it  as  he  pleases,  so  the  ordinary 
creditors  of  a  firm  have  no  lien  on  the  property  of  the  firm  so  as  to 


234;  Brooke  v.  Washington,  8  Gratt. 
(Va.)  248;  Hoxie  v.  Carr,  1  Sunan.  (U. 
S.)  173 ;  Lancaster  Bank  v.  Myerley,  13 
Pa.  St.  544  ;  Matlock  v.  Matlock,  5  Ind. 
403  ;  Pugh  V.  Carrie,  5  Ala.  446 ;  Smith 
V.  Jackson,  2  Edw.  (N.  Y.)  28 ;  Arnold 
V.  "Wainwright,  6  Minn.  358 ;  Andrews 
V.  Brown,  21  Ala.  437 ;  Black  v.  Black, 
15  Ga.  445;  Coles  v.  Coles,  15  Johns. 
(N.  Y.)  159;  Davis  v.  Christian,  15 
Gratt.  ( Va.)  1 1 ;  Day  v.  Perkins,  2 
Sandf.  (N.  Y.)  Ch.  359;  Devine  v. 
Mitchum,  4  B.  Mon.  (Ky.)  488 ;  Fergu- 
son V.  Hass,  Phil.  (N.  C.)  Eq.  113 ;  Fos- 
ter V.  Barnes,  81  Pa.  St.  377 ;  Galbraith 
V.  Gedge,  16  B.  Mon.  (Ky.)  631 ;  Hill  v. 
Beach,  1  Beas.  (N.  J.)  31 ;  Ludlow  v. 
Cooper,  4  Ohio  St.  1 ;  Mauck  v.  Mauck, 
54  111.  281  ;  Moderwell  v.  xMullison,  21 
Pa.  St.  257 ;  Morgan  v.  Olney,  53  Ind. 
6;  Nichols  v.  Ogden,  29  111.  323;  Piatt 
V.  Oliver,  3  McLean  (U.  S.)  27;  Kam- 
melsberg  v.  Mitchell,  29  Ohio  St.  22; 
Scruggs  V.  Blair,  44  Miss.  406 ;  West  v. 
Hickory  Mining  Assoc,  80  Pa.  St.  38 ; 
Whitney  v.  Cotton,  53  Miss.  689. 

Property  so  purchased  and  held  is  con- 
sidered as  personal  property  to  this  ex- 
tent at  least :  that  it  is  liable  to  pay  the 
debts  of  the  firm,  and  the  surviving  part- 
ner has  a  claim  on  it  for  that  purpose, 
which  is  superior  to  the  title  of  the 
widow  and  heirs-at-law  of  the  deceased 
partner.    Andrews  v.  Brown,  21  Ala.  437. 

But  this  rule  grows  out  of  the  peculiar 
nature  of  the  partnership  relation,  and 
is  adopted  for  the  purpose  of  doing  jus- 
tice between  partners,  or  between  them 
and  others  having  dealings  with  them, 
and  for  the  purpose  of  properly  adjust- 
ing the  relations  between  them,  or  be- 
tween them  and  others  having  dealings 
with  or  relations  to  the  partnership.     It 


is  not  an  arbitrary  rule,  by  which  a 
court  of  equity  transmutes  real  estate 
into  personal  property  when  it  is  once 
owned  and  possessed  by  a  partnership, 
and  causes  it  to  take  that  character  out- 
side of  and  independent  of  the  exigen- 
cies of  the  partnership.  Black  v.  Black, 
15  Ga.  445. 

Altlw)ugh  a  court  of  equity  considers 
and  treats  real  property,  purchased  with 
the  partnership  funds  and  held  for  the 
purposes  of  the  firm,  as  constituting 
part  of  the  stock  of  the  partnership,  it 
leaves  the  legal  title  undisturbed,  except 
so  far  as  may  be  necessary  to  protect  the 
equitable  rights  of  the  respective  part- 
ners. Lang  V.  Waring,  25  Ala.  625. 
Such  real  estate  is  regarded  in  equity  as 
personal  property,  so  far  as  may  be  ne- 
cessary for  the  payment  of  debts,  and  an 
adjustment  of  accounts  between  the 
partners.  Davis  v.  Smith  (Ala.),  2  So. 
Eep.  897.  It  i«  to  be  regarded,  at  law, 
as  held  and  owned  by  them  as  tena«nt3 
in  common,  in  the  absence  of  any  agree- 
ment or  understanding  to  the  contrary, 
and  is  subject  to  be  so  treated.  But  in 
equity  it  should  be  regarded  as  held  in 
trust  as  partnership  property,  and  sub- 
ject to  the  rules  applicable  to  partner- 
ship personal  property,  and  liable  to  the 
claims  of  the  partners  upon  each  other, 
and  the  debts  of  the  partnership.  Gal- 
braith V.  Gedge,  16  B.  Mon.  (Ky.)  631 ; 
Devine  v.  ^Vlitchum,  4  Id.  488  ;  Coles  v. 
Coles,  15  Johns.  (N.  Y.)  159. 

Real  property  so  purchased  which 
remains  after  paying  the  debts  of  the 
firm,  and  adjusting  the  equitable  claims 
of  the  different  members  of  the  firm,  as 
between  themselves,  is  considered  and 
treated  as  real  estate.  Buckley  v.  Buck- 
ley,  11   Barb.  (N.  Y.)  43;   Scruggs  v. 


566 


CHAP.  IV.,  §  III.]      CONVERSION   OP   PROPERTY.  334* 

be  able  to  prevent  it  from  parting  with  that  property  to  whomso- 
ever it  *chooses.     Accordingly  it  has  frequently  been  held  r^jcooK 
that  agreements  come  to  between  partners  converting  the 


Blair,  44  Miss.  456.  .  See,  however, 
Tliayer  v.  Lane,  Walk.  (Miss.)  Ch.  200. 
Land  so  purchased  is  to  be  deemed 
personalty,  although  the  title  is  held  by 
one  of  the  partners  Rank  v.  Grote,  50 
N.  Y.  Super.  Ct.  275. 

Land  bought  by  a  partnership  at  joint 
expense,  and  to  be  sold  upon  joint  ac- 
count, will  be  considered  personal  prop- 
erty in  equity,  if  that  appears  to  have 
been  the  intention  of  the  parties.  Lud- 
low V.  Cooper,  4  Ohio  St.  1. 

When  real  estate  is  brought  into  part- 
nership, it  is  treated  in  equity  as  per- 
sonal estate,  and  a  lease  thereof  by  one 
partner  in  his  own  name  enures  to  the 
benefit  of  the  firm.  Moderwell  v.  MuUi- 
son,  21  Pa.  St.  257. 

Illustrations. — Two  partners  holding 
unequal  interests,  having  foreclosed  a 
mortgage  upon  real  estate  taken  to  in- 
demnify the  partnership  against  a  cer- 
tain securityship,  bid  in  the  property, 
and  the  land  was  conveyed  to  them 
jointly,  without  designating  their  re- 
spective interests.  Held,  that  each  took 
a  moiety  of  the  legal  title,  but  that  in 
equity  they  would  hold  according  to 
their  respective  interests;  and  that  a 
conveyance  by  the  executor  of  the  part- 
ner holding  the  greater  interest  "  of  all 
the  right,  title,  and  interest  which  the 
testator  had  at  the  time  of  his  decease," 
would  pass  to  the  grantee  the  legal  title 
to  one-half  the  land,  and  the  equitable 
title  to  the  additional  interest  held  by 
the  testator ;  and  that  one  holding  under 
this  grantee,  without  notice  of  the  non- 
payment of  the  purchase  money  of  the 
equitable  interest,  would  hold  it  dis- 
charged of  the  vendor's  lien.  Putnam 
V.  Dobbins,  38  111.  394. 


Where  one  of  a  firm  of  four  brothers 
purchased,  in  his  own  name,  a  lot,  and 
leased  it  to  the  firm,  and  the  firm  erected 
its  oil  refinery  thereon,  it  was  held  that 
his  three  brothers  could  not,  in  an  equity 
proceeding,  afterwards  claim  that  the  lot 
should  be  treated  as  firm  property,  al- 
though he  had  acted  in  bad  faith  in  pro- 
curing the  conveyance  to  himself  rather 
than  to  the  firm — his  act  having  been 
long  acquiesced  in  by  the  three  others 
without  an  investigation  of  the  false  and 
flimsy  reason  he  had  assigned  therefor, 
Slemmer's  Appeal,  58  Pa.  St.  168. 

Rights  of  creditors. — Creditors  of  the 
firm  and  of  the  individual  partners,  may 
contest  the  question  whether  real  estate 
by  the  firm  is  partnership  property  or 
individual  property.  The  pi-esumption 
that  it  is  partnership  property  is  not  con- 
clusive as  against  them.  Osborn  v.  Mc- 
Bride,  16  Bankr.  Reg.  22. 

Land  owned  and  held  by  a  firm  as 
firm  property,  is  only  to  be  treated  as 
personalty  so  far  as  necessary  to  secure 
the  payment  of  the  firm  debts,  and  ad- 
vances made  by  the  partners  respective- 
ly ;  for  every  other  purpose  it  remains 
real  estate.  Re  Codding,  9  Fed.  Rep. 
849;  S.  C.  16  West.  Jur.  194. 

When  the  legal  title  to  real  estate  be- 
longing to  a  partnership  is  vested  in  one 
of  its  members,  the  lien  acquired  by  a 
judgment  against  him  individually,  in 
favor  of  a  creditor  of  the  company,  is 
subject  to  the  equities  already  existing 
over  the  property ;  and  a  judgment 
against  the  company  itself  would  not 
operate  as  an  efficient  lien  on  the  land. 
Coster  V.  Bank  of  Georgia,  24  Ala.  37. 

Employing  partnership  funds  in  mak- 
ing permanent  improvements  upon  real 


567 


335*              PAETNERSHIP  PROPERTY.  [bOOK  III., 

property  of  the  firm  into  the  separate  estate  of  one  or  more  of  its 
members,  and  vice  versa,  are,  unless  fraudulent,  binding  not  only  as 

property  owned  by  the  partners,  and  A  conveyance,  by  one  member  of  a 
appropriated  to  the  partnership  busi-  solvent  firm,  of  his  undivided  interest  in 
ness,  is  not  necessarily  a  fraud  upon  the  the  real  estate  of  the  partnership,  to  a 
creditors  of  the  firm,  if  no  intent  to  de-  stranger,  whether  made  upon  a  sale  or 
fraud  is  shown.  Parker  v.  Bowles,  57  by  way  of  payment  of  his  individual 
N.  H.  491.  debt,  is  valid  as  against  the  copartners  ; 
In  equity  real  estate  bought  for  the  and  they  cannot  maintain  an  action  to 
use  of  the  firm  with  the  firm  money,  have  it  set  aside,  oh  the  ground  that  it 
and  used  in  its  business,  will  be  applied  was  made  without  their  consent,  and 
to  liquidating  partnership  in  preference  impairs  the  credit  of  the  firm.  Tread- 
to  individual  liabilities.  Messer  t'.  Mes-  well  ?.  Williams,  9  Bosw.  (."^.Y.)  649. 
ser,  59  N.  H.  375.  If  creditors  do  not  object,  the  pur- 
In  a  contest  between  individual  and  chaser  takes  a  good  title,  and  it  does  not 
firm  creditors,  a  conveyance  to  copart-  lie  with  the  other  members  of  the  firm 
ners  creates  a  tenancy  in  common,  unless  to  object;  or,  at  least,  to  enable  them  to 
the  deed  otherwise  provides,  although  do  so  they  must  show  that  the  partner- 
the  purchase  money  is  taken  from  the  ship  debts  exceed  the  assets,  and  that 
partnership  funds.  Black  v.  Seipt,  12  there  is  need  of  the  property  in  question 
Phil.  (Pa.)  360.  to  provide  for  the  deficiency  and  equal- 
Land  purchased  with  partnership  ize  the  interests  of  the  partners.  lb. 
funds  for  partnership  use  is  subject  to  —  of  heirs  of  deceased  partner. — 
firm  debts,  including  debts  due  one  of  The  real  estate  of  a  partnership  is  held 
the  partners  by  the  firm,  and  in  prefer-  as  personalty  for  the  purposes  of  the 
ence  to  individual  debts.  Diggs  v.  partnership,  but  where  not  needed  for 
Brown,  78  Va.  292.  such  purposes  it  descends,  as  other  real 
—  of  purchasers. — The  interest  of  estate,  to  the  heir.  Williamson  v.  Fon- 
the  survivor  in  his  deceased  partner's  tain,  7  Baxt.  (Tenn.)  212;  Gaines  v. 
share  of  real  estate  held  in  the  name  of  Catron,  1  Humph.  (Tenn.)  514 ;  McAl- 
the  firm,  is  equitable  merely,  and  one  lister  v.  Montgomery,  3  Hayw.  (Tenn.) 
who  purchases  it  under  a  judgment  and  94;  McGrath  v.  Sinclair,  55  Miss.  89  ; 
execution  at  law  against  the  survivor  Piper  v.  Smith,  1  Head  (Tenn.)  93; 
acquires  no  such  title  as  a  court  of  Summey  v.  Patton,  1  Winst.  (N.  C.)  Eq. 
equity  will  enforce.  Lang  v.  Waring,  (No.  II.)  52 ;  Yeatman  v.  Woods,  6  Yerg. 
17  Ala.  145.  (Tenn.)  20. 

A  bona  fide  purchaser  of  real  estate  A  partnership  "  for  the  purchase  of 

from  a  member  of  a  copartnership,  for  a  lands"  does  not  necessarily  contemplate 

valuable  consideration  and  without  no-  sales  of  land  so   as  to   make  the  land 

tice  of  the  partnership  character  of  the  stock  in  trade,  but  it  passes  to  the  heir 

property,  purchasing  only  to  the  extent  as  real  estate,  and  not  to  the  administra- 

of   the    grantor's    legal   title,  will   take  tor.     Dilworth  v.  Mayfield,  36  Miss.  40. 

the  title  freed  from  the  equitable  claims  Land   acquired  by  a  partnership  in 

of  others,  partners  or  creditors  of  the  the  course  of  its  dealings,  for  partnership 

firm.   Dupuyi;.  Leavenworth,  17  Cal.  262.  purposes,  is  partnership  property,  and 

668 


CHAP.  IV.,  §  III.]      CONVERSION   OF   PROPERTY. 


SSS'^ 


between  the  partners  themselves,  but  also  on  their  joint  and  on 
their  respective  several  creditors ;  and  that  in  the  event  of  bank- 
ruptcy the  trustees  must  give  eifect  to  such  agreements,  (.t)  13 


the  legal  title  survives  upon  the  death 
of  a  partner  ;  and  a  sale  thereof,  ordered 
in  a  suit  to  settle  the  partnership  aflairs, 
binds  the  heirs  of  the  deceased  partner, 
though  not  parties  to  the  suit.  Waugh 
V.  Mitchell,  1  Dev.  &  B.  (N.  C.)  Eq.  510. 

Where  a  partner  dies,  his  personal 
representative,  not  his  heir,  succeeds  to 
his  interest  in  lands  bought  by  the  firm 
for  firm  purposes,  before  liquidation. 
Leaf's  Appeal,  105  Pa.  St.  505. 

—  of  persons  holding  liens. — A  per- 
son who  loans  the  entire  capital  to  an 
individual  partner  for  the  purpose  of 
commencing  business,  acquires  an  equity 
equal  to  that  of  the  creditors  of  the  part- 
nership ;  and  if  the  money  is  used  in 
purchasing  lands,  which  are  afterwards 
mortgaged  to  the  lender  by  the  individ- 
ual partner  to  secure  the  loan,  the 
former  will  acquire  an  equity  superior 
to  that  of  the  creditors  of  the  partner- 
ship, but  subject  to  the  lien  of  the  other 
partner,  if  he  purchases  with  notice  of 
his  equitable  title  to  an  undivided  half. 
Eeeves  v.  Ayres,  38  111.  418. 

The  Scotch  law. — "  The  property  of 
the  company  is  common  ;  held  pro  indi- 
viso  by  all  the  partners,  as  a  stock,  and 
in  trust.;  responsible  for  the  debts  of  the 
concern  ;  and  subject,  after  the  debts  are 
paid,  to  division  among  the  partners  ac- 
cording to  their  agreement.  This  is  a 
great  point  in  the  doctrine  of  partner- 


ship, and  important  consequences  are 
deducible  from  it.  The  common  stock 
includes  all  lands,  houses,  ships,  leases, 
commodities,  money ;  whatever  is  con- 
tributed by  the  partners  to  the  company 
use.  It  comprehends  also  whatever  is 
created  by  the  joint  exertions  of  the 
company,  or  acquired  in  the  course  of 
the  employment  of  their  capital,  skill, 
and  industry.  All  this  by  the  operation 
of  law,  and  the  nature  and  effect  of  the 
contract,  becomes  common  property  ;  is 
held  by  all  the  partners  jointly  for  the 
uses  of  the  partnership  ;  and  is  directly 
answerable  as  a  stock  for  the  payment 
of  its  debts.  1.  Vest ing  of  the  stock: — The 
stock  or  common  fund  is  held  by  the 
partners  pro  indiviso.  And,  1.  This  pi'o 
indiviso  right  implies,  as  between  the 
parties  themselves,  a  right  of  retention 
in  each  partner  over  the  stock,  fbr  any 
advances  which  he  may  have  made  to 
the  company,  or  for  any  debt  due  by  the 
company  for  which  he  may  be  made 
responsible.  2.  It  also  implies,  in  rela- 
tion to  the  public  at  large,  creditors  of 
the  company,  a  trust  in  the  several  part- 
ners, as  joint  trustees  for  payment,  in 
the  first  place,  of  the  company  debts. 
And  on  this  point  rests  (1),  the  prefer- 
ence, which  the  creditors  of  the  com- 
pany have  over  the  company  funds ; 
none  of  the  partners,  nor  any  one  in 
their  right,  as   individual   creditors  or 


(«)  See  Ex  parte  Kuffin,  and  the  other 
cases  cited  in  the  last  two  notes,  and 
Campbell  v.  Mullett,  2  Swanst.  575  ;  Ex 
parte  Clarkson,  4  Deac.  &  C.  56 ;  Ex  parte 
Peake,  1  Madd.  358. 

13.  Creditors  not  entitled  to  be 
consulted. — A  distribution  by  partners 


among  themselves  of  part  of  their  stock 
in  trade,  if  made  with  the  assent  of 
creditors,  is  not  fraudulent.  Wilkinson 
V.  Yale,  6  McLean  (U.  S.)  16. 

Where  one  partner  buys  out  the  whole, 
agreeing  to  pay  all  the  debts,  the  firm 
creditors   have  a  lien  on   the   property 


569 


335* 


PARTNERSHIP  PROPERTY. 


[book  III., 


A  conversion  of  joint  into  separate  property,  or  vice  versa,  most 
frequently  takes  place  when  a  firm  and  one  of  its  partners  carry  on 


otherwise,  being  entitled  to  more  than 
the  reversion  after  the  purposes  of  the 
trust  are  fulfilled  ;  and  (2),  the  pecu- 
liarity that  hereditable  subjects  belong- 
ing to  and  held  by  a  company  are  con- 
sidered not  as  hereditable  in  succession, 
but  as  movable;  consisting  of  the  jus 
crediti  only.  3.  In  this  respect,  the  con- 
tract of  partnership  has  the  effect  of  a 
direct  conveyance  of  property  to  the 
company  of  whatever  is  engaged  to  be 
given,  or  by  clear  evidence  is  contribu- 
ted to  the  use  of  the  company  by  any  of 
the  partners,  to  whom  it  belongs.  The 
contract  does  not  indeed  supersede  the 
necessity  of  the  completion  of  the  trans- 
ference by  tradition  or  otherwise ;  but 
it  operates  as  a  conveyance  {titulus  trans- 
ferendi  dominii),  which,  when  followed 
by  tradition,  possession,  intimation,  and 
the  other  methods  of  completing  a  trans- 
ference by  law,  vests  the  property  in  the 
partners,  jointly  for  the  purposes  already 
expressed.  'Society,'  says  Lord  Stair, 
'  is  not  so  much  a  permutative  as  a  com- 
mutative contract,  whereby  the  contrac- 
tors communicate  to  each  other  some 
stock,  work,  or  profit.  The  effect  of  so- 
ciety is  that  thereby  something,  which 
before  was  proper,  becometh,  or  is  con- 
tinued to  be,  common  to  the  copartners.' 
He  adds :  '  Yet  this  communication  is 
not  effectual  to  transfer  the  property  in 
part,  or  to  communicate  it  without  deliv- 


ery or  possession,  by  which  property  by 
positive  law  is  transferred.'  This  dis- 
tinction is  of  some  consequence.  Where 
the  question  is  between  the  parties  and 
their  representatives,  as  to  what  shall  be 
considered  as  the  estate  of  the  company, 
but  without  involving  any  competition 
with  third  parties,  whatever  falls  under 
the  fair  construction  of  the  contract  will, 
as  a  personal  right,  belong  to  the  company 
and  its  creditors.  But  where  there  arises 
a  competition  depending  on  the  question 
of  real  right,  it  will  be  determined 
according  to  that  criterion  of  real  right 
which  the  law  has  appointed  in  cases  of 
transference.  But  in  determining  what 
shall  amount  to  an  engagement  to  con- 
tribute, and  consequent  conveyance  of  a 
particular  subject,  it  is  not  always  the 
use  of  the  subject  that  will  settle  the 
point.  In  one  case,  certain  subjects,  of 
which  the  use  was  given  to  the  company, 
were  held  to  be  fairly  intended  as  part 
of  the  stock,  from  the  way  in  which 
they  were  mentioned  in  the  inventories. 
In  another  nearly  similar  case,  the  same 
inference  was  avoided,  the  partnership 
not  being  of  a  permanent  character,  but 
a  momentary  joint  adventure  merely. 
In  respect  to  movables,  all  commodities 
comprehended  within  the  partnership, 
and  in  possession  of  the  partner,  to 
whom  they  previously  belonged,  are 
held,  as  by  traditio  brevis  manus,  to  be 


superior  to  any  claims  of  that  partner's 
private  creditors.  Conroy  v.  Woods,  13 
Cal.  626. 

Where  a  retiring  partner  bona  fide 
assigns  all  his  interest  in  the  stock  and 
effects  to  the  remaining  partner,  whether 
the  partnership  be  general  or  limited, 
the  same  thereby  becomes  separate  prop- 

5 


erty,  and  will  be  distributable  accord- 
ingly, notwithstanding  the  subsequent 
insolvency  of  the  remaining  partner. 
Upson  V.  Arnold,  19  Ga.  190. 

Creditors  have  only  a  quasi  lien  upon 
partnership  effects,  which  may  be  en- 
forced in  a  court  of  equity  as  a  deriva- 
tive subordinate  right  through  the  liea 

70 


CHAP.  IV.,  §  III.]      CONVERSION   OF   PROPERTY. 


335* 


distinct  trades,  or  when  a  change  occurs  in  a  firm  by  the  retire- 
raent  of  some  or  one  of  its  members,  or  by  the  introduction  of  a 
new  partner. 


vested  in  the  company ;  for  the  partners 
having  power  to  hold  for  the  company 
as  propositi,  their  possession  will  be  pre- 
sumed to  be  for  the  common  behoof. 
But  money  due  by  a  third  party  to  an 
individual  partner,  or  commodities  in 
the  hands  of  third  parties,  contributed 
by  the  owner  as  part  of  his  stock,  will 
not  be  transferred  without  delivery  or 
intimation.  The  creditors  of  the  owner, 
using  attachment  by  diligence  before 
intimation  of  the  partnership,  would 
attain  a  preference  over  tlie  company. 
Ships  must  be  transferred  according  to 
the  directions  of  the  statute.  4.  As  to 
land  and  other  property,  which,  by  the 
forms  of  territorial  conveyance,  require 
to  be  transferred  by  deed,  the  partner- 
ship will  acquire  by  the  contract  nothing 
more  than  the  Jus  ad  rem.  If,  for  exam- 
ple, a  cotton  mill  is,  by  the  agreement, 
contributed  as  his  share  of  stock,  on  the 
part  of  the  owner,  this  will  not  feudally 
transfer  to  the  company  the  property  of 
the  mill,  so  as  to  entitle  them  to  exclude 
the  adjudication  of  the  separate  creditors 
of  the  proprietor  trusting  to  the  record. 
But  it  will,  like  a  general  disposition, 
confer  on  the  company  a  jus  ad  rem,  by 
virtue  of  which  they  may,  in  a  declara- 
tor and  adjudication  in  implement,  have 
that  property  declared  and  adjudged  to 


the  partners  jointly,  or  to  a  trustee^ 
as  part  of  the  stock  of  the  concern. 
5.  Such  personal  property  as  may  have 
been  acquired  in  the  name  of  the  society 
becomes  eo  ipso  the  property  of  the 
partnership,  although  purchased  by  an 
individual  partner  with  his  own  money. 
He  is  prcepositus  of  the  company,  and 
entitled  to  advance  money  and  acquire 
property  directly  for  the  common  be- 
hoof. 6.  Such  personal  property  as  a 
partner  acquires,  even  in  his  own  name, 
provided  it  be  beneficial  acquisition  and 
in  the  company's  line  of  trade,  is,  accord- 
ing to  the  spirit  of  the  contract  of  part- 
nership, to  be  held  as  acquired  for  the 
company,  and  the  company  will  be  enti- 
tled to  claim  it.  But  it  would  rather 
seem  that  in  such  a  case  the  property 
would  pass  to  the  partner  in  real  right, 
with  a  jus  ad  rem  to  the  company  and 
its  creditors.  7.  A  partner  who  binds 
himself  to  pay  a  sum  or  fungible  into 
the  stock  is  debtor  to  the  company ;. 
and  the  loss  of  the  money  or  fungible, 
before  being  put  into  stock,  is  his  private 
loss.  If  he  has  engaged  to  put  in  a 
specific  subject  into  stock,  and  it  perish, 
the  loss  is  to  the  company,  unless  the 
partners  shall  be  in  mora."  2  Bell  Com., 
B,  7  (5th  ed.),  c.  1,  pp.  613-615. 


and  equity  of  the  partners.  Guyton  v. 
Flack,  7  Md.  398 ;  Black  v.  Bush,  7  B. 
Mon.  (Ky.)  210  ;  O'Bannon  v.  Miller,  4 
Bush  (Ky.)  25;  Bank  of  Kentucky  v. 
Herndon,  1  Id.  359.  See,  also,  Tilling- 
hast  V.  Champlin,  4  R.  I.  173  ;  Shackle- 
ford  V.  Shackleford,  32  Gratt.  (Va.)  481. 
Where  one  of  two  partners,  with  the 
consent  of  the  other,  sells  and  conveys 

5 


one-half  of  the  effects  of  the  firm  to  a 
third  person,  and  the  other  partner  after- 
wards sells  and  conveys  the  other  half 
to  the  same  person,  such  sales  and  con- 
veyances are  not  prima  facie  void  as 
against  the  creditors  of  the  firm,  but  are 
prima  facie  valid  against  all  the  world, 
and  can  be  set  aside  only  by  the  creditors 
of  the  firm,  upon  their  proving  the  trans- 

71 


335^ 


PARTNERSHIP  PROPERTY. 


[book  III, 


Dealings  between  one  'partner  and  the  firm. — When  a  firm  and 
one  of  its  members  carry  on  distinct  trades,  property  passing  in  the 


actions  to  be  fraudulent  as  against  them. 
Kimball  v.  Thompson,  13  Mete.  (Mass.) 
283. 

Though  a  creditor  might  object  to  a 
transfer  of  partnership  choses  in  action 
from  the  debtor  firm  to  their  successors, 
yet  a  debtor  to  the  firm  cannot  object 
that  the  old  firm  had  no  power  to  dis- 
pose of  its  property  without  first  settling 
its  affairs.     Pease  v.  Eush,  2  Minn.  107. 

Members  of  an  insolvent  partnership 
cannot,  by  mutual  consent,  divide  the 
partnership  funds  between  themselves, 
60  as  to  enable  each  member  to  apply 
the  part  allotted  to  him,  in  a  preferred 
payment  of  his  separate  debts,  leaving 
the  joint  debts  unsatisfied  ;  and  a  trans- 
fer of  such  partnership  property  to  an 
individual  creditor,  in  payment  of  an 
antecedent  debt,  with  a  knowledge  on 
the  part  of  the  creditor  of  such  design, 
will  not  enable  him  to  hold  it  discharged 
from  the  equitable  lien  of  the  partner- 
ship creditors.  Burtus  v.  Tisdall,  4  Barb. 
(N.  Y.)  571. 

A  release  from  one  partner  to  another 
of  his  interest  in  the  partnership  effects, 
taken  with  full  knowledge  of,  and  sub- 
ject to  all  the  equities  between  the  par- 
ties, is  not  such  a  sale  as  would  deprive 
the  vendor  of  his  right  of  action  for 
goods  which  he  alleged  such  partners, 
as  a  firm,  had  fraudulently  obtained 
from  him.  Ward  v.  Woodburn,  27  Barb. 
(N.  Y.)  346. 

The  division,  by  partners,  of  the  part- 
nership assets  between  themselves,  and 
the  transfer  of  such  assets  by  the  indi- 
vidual partners,  in  payment  of  their  pri- 
vate debts,  when  the  partnership  is  in- 
solvent, is,  in  point  of  law,  a  fraud  upon 
the  partnership  creditors.  Ransom  v. 
Van  Deventer,  41  Barb.  (N.  Y.)  307. 

5 


A  creditor  in  embarrassed  circum- 
stances, finding  the  firm  of  which  he  is 
a  member  about  to  fail,  may  at  fair 
prices  make  a  valid  transfer  of  his  pri- 
vate property  to  his  private  creditors, 
in  payment  of  honest  private  debts,  in 
preference  to  those  of  the  firm  ;  provided, 
also,  there  is  nothing  to  impeach  the 
good  faith  of  the  grantees.  Auburn,  &c., 
Bank  v.  Fitch,  48  Barb.  (N.  Y.)  344. 

Where,  upon  dissolution,  one  of  two 
partners  takes  the  property  and  the 
right  to  use  the  firm  name  in  continuing 
the  business,  and  agrees  to  pay  the  debts, 
the  facts  of  his  continuing  in  the  busi- 
ness under  the  same  style  and  in  the 
same  manner  as  before,  and  employing 
the  retiring  partner  as  a  salesman  at  a 
rate  agreed  upon,  will  not,  of  themselves, 
warrant  the  inference  that  the  transfer 
from  the  retiring  partner  was  fraudulent 
as  against  his  creditors,  or  subject  the 
property  to  liability  to  levy  by  his  in- 
dividual creditor  who  became  such  after 
the  dissolution.  Hamill  v.  Willett,  6 
Bosw.  (N.  Y.)  533. 

Where  two  partners  in  a  firm  purchase 
the  interest  of  a  third  partner,  and  form 
a  new  firm,  and  subsequently  make  an 
assignment  for  the  benefit  of  creditors, 
providing  for  the  payment  of  debts  due 
from  the  new  firm,  or  the  old  firm,  "  or 
either  of  the  members"  of  the  two  firms, 
such  assignment  is  invalid  as  to  credit- 
ors of  the  old  firm.  Lester  v.  Pollock,  3 
Eobt.  (N.  Y.)  691. 

A  docket  entry  at  the  instance  of  a 
partner,  assigning  a  firm  claim  without 
consideration,  is  void  as  against  creditors 
of  the  firm.  Updegraff  v.  Rowland,  52 
Pa.  St.  317. 

The  rule  that  the  creditors  of  a  firm 
have  no  equitable  lien  upon  the  copart- 
7-:> 


CHAP.  IV.,  §  III.]      CONVERSION   OP   PEOPERTY. 


335* 


oixlinaiy  way  of  business  from  the  partner  to  the  firm,  ceases  to  be 
his  and  becomes  the  property  of  the  partnership,  and  vice  versa^ 


nership  propertv,  but  can  only  work  out  assumpsit  as  upon  an  implied  promise 
such  a  lien  through  the  equities  of  the  to  pav  the  creditors  and  indemnify  the 
copartners,  applicable  whilst  the  copart-  grantor,  this  was  a  valid  consideration 
ners  are  administering  their  own  funds,  for  the  deed  as  against  partnership 
has  no  application  to  the  case  of  a  copart-  creditors  of  A  «fe  B.  Guild  v.  Leonard, 
nership  dissolveil  by  the  death  of  one  18  Pick.  (Mass.)  511. 
of  the  copartners,  especially  if  the  8ur-  When,  upon  some  disagreement  be- 
viving  partner  be  insolvent,  or  where,  tween  partners,  their  differences  were 
though  living,  one  or  both  the  copartners  submitted  to  arbitrators,  who  awarded 
have  become  insolvent  or  bankrupt,  so  that  all  the  goods  and  other  assets  of 
that  their  property  is  in  the  hands  of  the  firm  should  pass  to  one  of  the  part- 
assignees  for  distribution.  Tillinghast  ners,  who  should  pay  all  the  partnership 
V.  Champlin,  4  K.  I.  173.  debts,  and   thereupon   such   goods   and 

One  partner  may  assign  his  interest  in  assets  were  all  attached  by  private  cred- 
the  partnership  property  to  his  separate  itors  of  such  partner,  and  subsequently 
creditor,  and  the  assignment  will  be  good  by  the  creditors  of  the  firm,  it  was  held 
against  the  creditors  of  the  firm  after-  that  the  creditors  of  the  firm  were  enti- 
wards  attaching.  Wilson  v.  Bowden,  8  tied  to  be  preferred,  even  if  the  award 
Kich.  (S.  C.)  9  ;  Norris  v.  Vernon,  Id.  13.  had  been  executed  by  a  transfer  in  ac- 
If  either  partner  has  contracted  a  debt  cordance  with  it.  Tenney  v.  Johnson, 
in  his  own  name,  in  which,  as  between    43  N.  H.  144. 

themselves,  the  other  partner  should  Where  a  partner  gave  a  mortgage  on 
share,  that  liability  is  a  sufficient  con-  his  separate  property,  creating  thereby 
sideration  as  against  joint  creditors  for  a  a  preference  in  favor  of  a  partnership 
transfer  of  firm  property,  while  free  creditor,  it  was  held  that  the  mortgage 
from  the  operation  of  insolvent  laws,  was  not  thereby  void  and  fraudulent  as 
for  the  payment  of  that  debt.  Marks  v.  against  the  separate  creditors  of  the 
Hill,  15  Gratt.  (Va.)  400.  mortgagor  ;  though,  on  complaint  made 

Illustrations.— A  and  B  being  the  in  their  behalf  as  a  class,  the  mortgage 
only  copartners  in  one  company,  and  might  be  declared  void  as  to  such  cred- 
being  likewise  partners  with  other  per-  tors.  Stewart  v.  Slater,  6  Duer  (N.  Y.) 
sons  in  two  other  companies,  A  made  a    83. 

deed-poll  to  B  of  all  the  grantor's  in-  Where  one  of  two  partners,  by  a  mort- 
terest  in  certain  real  estate  and  in  the  gage  deed,  conveys  to  the  other  partner- 
personal   property  of  the  three  compa-    ship  effects,  to  secure  debts  alleged  to 


nies,  the  deed  being  nominally  for  a 
pecuniary  consideration,  and  containing 
a  covenant  that  the  grantee  would  in- 
demnify the  grantor  against  all  the  debts 


be  due  from  the  one  to  the  other,  which 
deed  and  effects  are  assigned  to  bona  fide 
creditors  of  the  mortgagee,  to  secure 
debts  due  from  him  to  such  creditors. 


due   from   the   three   companies.      The  such  conveyance  was  held  to  be  valid 

deed  was  accepted  by  the  grantee,  but  against  creditors  of  the  firm  who  had  no 

was  not  executed  by  him.     It  was  held  lien.     Potts  «.  Blackwell,  3  Jones  (N.  C.> 

that  as  the  grantee  would  be  liable  in  Eq.  449. 

573 


335*  PAETNERSHIP  PROPERTY.         [bOOK  III., 

just  as  if  he  were  a  stranger  to  the  firm.  This  was  settled  in  the 
great  case  of  Bolton  v.  Puller,  {y)  in  which  there  were  two  banking 
firms,  one  carrying  on  business  at  Liverpool  and  one  in  Loudon. 
All  the  partners  in  the  latter  firm  were  partners  in  the  former. 
Some  bills  of  exchange  came,  in  the  ordinary  course  of  business, 
into  the  hands  of  the  Liverpool  firm,  to  be  placed  to  the  general 
account  of  its  customers.  These  bills  were  remitted  by  the  Liver- 
pool firm  to  the  London  firm,  to  be  placed  to  the  credit  of  the 
former  in  the  general  account  between  the  two  houses.  Both  houses 
afterwards  becoming  bankrupt,  it  was  held  that  the  bills  were  the 
property  of  the  London  firm  and  not  of  the  Liverpool  firm,  or  of 
its  customers.  Lord  Chief  Justice  Eyre,  in  delivering  judgment, 
adverted  to  the  question  now  under  consideration  in  the  following 
terms : 

"  There  can  be  no  doubt  that  as  between  themselves  a  partnership  may  have 
transactions  with  an  individual  partner  or  with  two  or  more  of  the  partners 
having  their  separate  estate  engaged  in  some  joint  concern  in  which  the  general 
^„„g-|  partnership  is  not  interested ;  and  that  they  may  by  *their  acts  convert  the 
joint  property  of  the  general  partnership  into  the  separate  property  of  an 
individual  partner,  or  into  the  joint  property  of  two  or  more  partners,  or  S  conveiso. 
And  their  transactions  in  this  respect  will,  generally  speaking,  bind  third  persons, 
and  third  persons  may  take  advantage  of  them  in  the  same  manner  as  if  the  part- 
nership were  transacting  business  with  strangers  ;  for  instance,  suppose  the  general 
partnership  to  have  sold  a  bale  of  goods  to  the  particular  partnership,  a  creditor 
of  the  particular  partnership  might  take  those  goods  in  execution  for  the  separate 
debt  of  that  particular  partnership."  ^* 

See,  also,  as  bearing  out  the  text,  Allen  St.  511 ;   State  v.  Thomas,  7  Mo.  App. 
V.   Centre  Valley   Co.,   21   Conn.   130;  205;  Weaver  d.  Ashcroft,  50  Tex.  428; 
Beeves  v.  Ayers,  38  111.  419 ;   Case  v.  White  v.  Parish,  20  Id.  688 ;  Wilcox  v. 
Beauregard,  99  U.  S.  119 ;  S.  C,  1  Woods  Kellogg,  11  Ohio  394. 
(U.  S.)  127  ;  Field  v.  Chapman,  15  Abb.  {y)  1  Bos.  &  P.  539. 
(N.  Y.)  Pr.  434;  Gwin  v.  Selby,  5  Ohio  14.  Dealings  between  one  partner 
St.  96 ;    Locke  v.  Lewis,  124  Mass.  1 ;  and  the  firm.— A  boiia  fide    mortgage, 
Majer  v.  Clark,  40  Ala.  259 ;  Miller  v.  given  by  a  member  of  a  firm  to  the  firm, 
Price,  20  Wis.  117 ;  Pfirrman  v.  Koch,  1  is  valid,  and  in  no  sense  a  mortgage  to 
Cine.  (O.)  460;    Potts  v.  Blackwell,  4  the  grantor  himself.     Galway  v.  Fuller- 
Jones  (N.  C.)  Eq.  58 ;  Rankin  v.  Jones,  ton,  2  C.  E.  Gr.  (N.  J.)  389. 
2  Id.  169 ;  Reese  v.  Bradford,  13  Ala.  Where  two  of  three  partners  of  a  firm, 
837  ;  Robb  v.  Mudge,  14  Gray  (Mass.)  engaged  in  building  a  mill,  bought  lum- 
534 ;    Schmidlapp  v.   Currie,   55   Miss,  ber  with  their  own  money,  and  delivered 
597 ;  Sigler  v.  Knox  Co.  Bank,  8  Ohio  it  on  the  ground  where  the  mill  was 

574 


CHAP.  IV.,  §  III.]      CONVERSION   OF  PROPERTY.  336* 

Change  of  property  on  change  in  firm. — Where  a  change  occurs 
in  a  firm  by  the  retirement  of  one  or  more  of  its  members,  nothing 
is  more  common  than  for  the  partners  to  agree  that  those  who  con- 
tinue the  business  shall  take  the  property  of  the  old  firm  and  pay 
its  debts,  or  that  part  of  the  property  of  the  old  firm  shall  become 
the  property  of  those  by  whom  its  business  is  to  be  continued,  whilst 
the  rest  of  the  property  shall  be  otherwise  dealt  with.  So,  again, 
when  a  partnership  is  first  formed,  or  when  a  new  partner  is  taken 
into  an  existing  firm,  or  when  two  firms  amalgamate  into  one,  some 
agreement  is  generally  come  to  by  which  what  was  before  the  prop- 
erty of  some  one  or  more  only  of  the  members  of  the  firm  becomes 
the  joint  property  of  all  such  members.  All  such  agreements,  if 
bona  fide,  and  not  fraudulent  against  creditors,  are  valid,  and  have 
the  eifect  of  altering  the  equitable  ownership  in  the  property  affected 
by  them.  {£) 

In  Ex  parte  Ruflfiu,  (a)  which  is  the  leading  case  on  this  subject, 
Thomas  Cooper,  a  brewer,  took  James  Cooper  into  partnership. 
That  partnership  was  afterwards  dissolved  by  articles,  by  which 
the  buildings,  premises,  stock  in  trade,  debts  and  effects  were  as- 
signed to  James  by  Thomas,  who  retired.  James  afterwards  be- 
came bankrupt,  and,  some  of  the  partnership  debts  being  unpaid, 
an  attempt  was  made  to  have  what  had  been  the  property  of  the 
partnership  applied  in  liquidation  of  those  debts.  But  it  was  held 
that  such  property  was  no  *longer  the  joint  property  of  the  r^qQ7 
two  partners,  but  had  been  converted  into  the  separate 
property  of  James. 

Ex  parte  "Williams  (6)  was  a  similar  case,  only  that  on  the  disso- 

biiilding,   and   the   other  partner,  who  of  Bristol  v.  Westcott,  12  Ch.  D.  461 ; 

had  personal  charge  of  the  work,  took  Varley  v.  Coppard,  L.  E.,  7  C.  P.  505. 
the  lumber  and  applied  it  to  the  part-        (a)  6  Ves.  119.     See,  too,  Ex   parte 

nership  uses  as  needed,  with  the  knowl-  Walker,  4   De   G.,  F.  &  J.  509 ;    Ex 

edge  of  the  two  former,  and  without  ob-  parte  Sprague,  4  De  G.,  M.  &  G.  866  ; 

jection,  these  facts  are  enough  to  prove  Ex  parte  Clarkson,  4  Deac.  &  C.  56 ;  Ex 

a  conversion  of  all  the  lumber  so  bought  parte  Gurney,  2  Mont.,  D.  &  D.  541 ;  Ex 

and  delivered  into  partnership  property,  parte  Peake,  1  Madd.  346 ;  Ex  parte  Fell, 

Person  v.  Wilson,  25  Minn.  189.  10  Ves.  348. 

(2)  Such  an  agreement  is  not  a  breach        (6)  11   Ves.  3.     Compare   Ex    parte 

of  a  covenant  not  to  assign  without  the  Cooper,  1  Mont.,  D.  &  D.  358. 
consent  of  the  lessor.     See  Corporation 

575 


337*  PARTXERSHIP  PROPERTY.         [bOOK  III., 

lution  no  assignment  was  made.  There  was  not  even  any  written 
agreement  showing  the  terms  on  which  the  dissolution  took  place. 
But  it  was  sworn  that  the  partner  who  continued  the  business  was 
to  take  all  the  stock  and  effects  of  the  old  firm,  and  it  was  held  that 
they  had  become  his  separate  property,  and  could  not  be  considered 
as  the  joint  property  of  the  dissolved  partnership. 

These  decisions  have  always  been  regarded  as  settling  the 
law  upon  the  subject  of  conversion  of  partnership  property,  and 
have  been  constantly  followed.  They  were  not,  it  will  be  observed, 
decided  with  reference  to  the  doctrine  of  reputed  ownership,  but 
with  reference  only  to  the  real  agreement  come  to  between  the  part- 
ners. They  apply  as  much  to  cases  of  a  change  of  interest  on 
death  as  on  retirement,  (c) 

The  case  of  Ex  parte  0\ven,{d)  which  has  been  already  referred 
to,(e)  shows  that  similar  principles  must  be  applied  in  order  to  de- 
termine what,  on  the  formation  of  a  partnership,  has  been  con- 
verted from  separate  into  joint  estate.  (/)^^ 

Agreement  must  be  executed. — In  order,  however,  that  an  agree- 
ment may  have  the  effect  of  converting  joint  into  separate  estate,  or 
vice  versa,  the  agreement  must  be  executed,  and  not  be  executory 
merely.  In  Ex  parte  Wheeler,  (g)  a  retiring  partner  and  a  continu- 
ing partner  entered  into  an  agreement  in  writing,  by  which  the  re- 

(c)  See  Ke  Simpson,  9  Ch.  572 ;  and  when  a  firm  ceases  the  partners  become 
compare  Ex  parte  Morley,  8  Ch.  1026,  tenants  in  common  of  the  partnership 
and  Ex  parte  The  Manchester  Bank,  12  property  then  undisposed  of,  yet  it  is  not 
Ch.  D.  917,  and  13  Id.  465.  These  universally  true.  So  long  as  partnership- 
three  cases  turned  on  the  construction  debts  remain  unpaid,  partnersiiip  prop- 
of  the  partnership  articles,  combined  in  erty  continues  such,  for  the  purpose  of 
the  last  two  with  the  wills  of  the  de-  application  to  the  payment  of  such 
ceased  partners.  The  wills  and  the  debts.  Rice  v.  McMartin,  39  Conn.  573. 
articles  together  prevented  a  conversion.  Where  partners  own  each  in  severalty 
{(l)  De  G.  &  S.  351.  the   real   estate   where  the  business   is- 

(e)  Ante  p.  *329.  carried   on,   and   buildings   have    been 

(/)  See,  too,  Ex  parte  Barrow,  2  Eose  erected  and  improvements  made  thereon 
252 ;  and  Belcher  v.  Sikes,  8  Barn.  &  C.  by  the  firm,  the  lands,  on  a  dissolution,. 
185,  for  a  case  where  separate  estate  was  will  be  treated  as  partnership  assets, 
made  joint  by  a  deed  of  dissolution  not  Smith  v.  Danvers,  5  Sandf.  (N.  Y.)  669. 
clearly  expressed.  (g)    Buck   25.      See,   too,   Ex    parte 

15.  Change  of  property  on  change  Wood,  10  Ch.  D.  554  ;  Ex  parte  Cooper, 
of  firm.— While  it  is  generally  true  that    1  Mont.,  D.  &  D.  358  ;  and  the  case  of 

576 


-CHAP.  IV.,  §  III.]     CONVERSION  OP  PROPERTY.  338* 

:,tooo-|  tiring  ^partner  assigned  the  stock,  good  will,  lease,  furni- 
ture, fixtures,  books  and  debts  of  the  firm,  to  the  continu- 
ing partner,  and  the  latter  agreed  to  pay  certain  debts  of  the 
partnership,  for  which  his  father,  he  said,  would  be  security.  The 
father,  however,  refused  to  give  any  security,  and  this  further  act 
was  necessary  to  be  done  in  order  to  complete  the  transfer  of  the 
property.  The  continuing  partner  having  become  bankrupt,  the 
court  held  that  the  property  of  the  old  firm  had  not  been  converted 
into  the  separate  estate  of  the  continuing  partner,  the  agreement 
being  still  executory  when  the  bankruptcy  occurred.  16 

Effect  of  fraud. — Moreover,  an  agreement  Avhich  can  be  success- 
fully impeached  for  fraud  will  not  affect  the  property  to  which  it 
may  relate ;  (A)  and  it  must  not  be  forgotten  that  in  the  event  of 

the  Bank  of  England,  3  De  G.,  F.  &  J.  had  no  eflBcacy  to  divide  the  partnership 

645,  noticed  ante  p.*330 ;  and  compare  Ex  property.     Fitzgerald  v.  Christt,  5  C.  E. 

parte  Gibson,  2  Mont.  &  A.  4 ;  Ex  parte  Gr.  (N.  J.)  90. 

Sprague,  4  De  G.,  M.  &  G.  866  ;  Haw-  With  a  view  to  a  dissolution,  two  part- 
kins  V.  Hawkins,  4  Jur.  (N.  S.)  1044.  ners  agreed  to  divide  their  stock,  and  that 

16.  Agreement  must  be  executed. —  the  machinery  which  belonged  to  them 

A  note  may  be  endorsed  to  a  firm  of  should  be  given  to  the  party  who  would 

which  the  endorser  is  a  member  in  the  give  the  most  for  it.     They  accordingly 

same  manner,  and  witii  the  same  effect  separated  the  stock  into  "  two  piles,"  but 

as  if  he  were  not  a  member  of  such  firm,  no  delivery  was  made,  and   before   the 

Allen  V.  Mason,  17  111.  App.  318.  arrangement  was  completed  the  parties 

Under  articles  of  partnership  between  quarreled,  and  the  settlement  was  inter- 
A  and  B, providing  that  either  party  could  rupted.  One  of  the  parties  caused  a  de- 
dissolve  the  partnership  upon  sixty  days'  mand  to  be  made  for  half  of  the  prop- 
notice  in  writing,  B  gave  notice,  and  after  erty.  Held,  that  enough  had  not  been 
the  time  limited,  the  parties  agreed  upon  done  to  vest  in  the  plaintiff  a  separate, 
terms  of  dissolution  and  a  division  of  the  exclusive  property  in  the  subject  of  the 
property.  By  this  agreement  B  was  in-  suit.  Koningsburg  v.  Launitz,  1  E.  D. 
debted  to  A,  which  indebtedness  was  to  Smith  (N.  Y.)  215. 
be  secured  to  A  by  mortgage.  The  agree-  Until  a  partnership  concern  is  closed 
ment  was  to  be  reduced  to  writing  and  by  a  final  account,  the  joint  interest  in 
signed  by  both  parties.  B,  however,  re-  the  whole  property  remains  ;  and  if  one 
fused  to  sign  the  agreement  when  writ-  partner  takes  out  what  he  deems  his 
ten,  or  to  give  the  mortgage.  The  prop-  share,  and  the  residue  is  afterwards  lost, 
erty  which  was  to  belong  to  each  was  he  will  be  compelled  to  account  with 
put  in  separate  drawers  in  a  safe,  and  the  other  partners  for  their  shares  of  the 
each  partner  had  a  key  of  the  drawer  in  amount  drawn  out  by  him.  Allison  v, 
which  his  part  was  put.  Held,  that  the  Davidson,  2  Dev.  (N.  C.)  Eq.  79. 
agreement  was  not  obligatory  on  A,  and  (A)  Ex  parte  Rowlaudson,  1  Kose  416. 

577  37 


338*  PARTNERSHIP  PROPERTY.         [bOOK  III. 

bankruptcy,  the  trustee,  as  representing  the  creditors,  may  be  able 
to  impeach  as  fraudulent  against  them,  agreements  by  which  the 
bankrupt  himself  would  have  been  bound,  (i)  In  a  case  where 
both  the  partnership  and  the  individual  partners  were  insolvent,  an 
agreement  by  one  of  them  transferring  his  interest  to  the  others, 
and  thereby  converting  what  was  joint  estate  into  the  separate 
estate  of  the  transferee,  was  held  invalid ;  for,  although  no  fraurl 
may  have  been  intended,  the  necessary  effect  of  the  arrangement 
was  to  delay  and  defeat  the  joint  creditors,  (k)  The  firm  became 
bankrupt  shortly  after  the  assignment  was  made. 

(i)  See  Re  Kemptner,  8  Eq.  286  ;  An-  664 ;  Ex  parte  Walker,  4  De  G.,  F,  &  J. 

derson  v.  Maltby,  2  Ves.  Jr.  244 ;  Bil-  509.    See,  also,  Luff  v.  Horner,  3  Fost. 

liter  V.  Young,  6  El.  &  B.  40.  &  F.  480,  which  seems  to  have  been  a. 

{k)  Ex  parte  Mayou,  4  De  G.,  J.  &  S.  clear  case  of  fraud  upon  a  creditor. 

578 


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